WASHINGTON – The Municipal Securities Rulemaking Board is asking the Securities and Exchange Commission to approve a revised content outline for its permanent municipal advisor qualification exam that covers newly approved advisor rules.
MAs will have to take and pass the Municipal Advisor Representative Qualification Exam, called Series 50, during a one-year period starting on Sept. 12 if they want to remain registered.
The exam is an updated version of an earlier pilot exam that the MSRB offered between January 15 and February 15 of this year. If individuals already took and passed the pilot exam, they do not need to take the permanent one.
The content outline for the permanent exam, which is immediately effective, now includes citations to MSRB Rules G-42 on core duties of municipal advisors, G-20 on gifts and gratuities, and G-37 on political contributions. Each of the rules received SEC approval after the MSRB released its pilot exam outline last year.
While Rule G-42 only applies to municipal advisors, Rules G-20 and G-37 were existing dealer rules that the MSRB amended to include MAs.
The MSRB is also seeking permission to remove its citation to Rule G-32 on disclosure from the outline as that rule does not apply to MAs.
"Periodic reviews of the content of the MSRB's qualification examinations are required to determine whether revisions are necessary or appropriate in view of changes to the laws, rules and regulations pertaining to the subject matter of the qualification examination," the MSRB said in its regulatory notice detailing the new content outline.
The Series 50 exam consists of 100 multiple-choice questions. Participants will have 180 minutes to complete the exam and must score at least a 71% to pass. MA firms have the option of having their candidates receive an information breakdown of their performances on each section along with information about whether they passed.
The exam is broken down into five topical sections. The first section tests understanding of SEC and MSRB municipal advisor rules and has 12 questions. A section testing an individual's understanding of municipal finance has 35 questions and another on "performing issuer's credit analysis and due diligence" has 12 questions. The final two are on structuring, pricing, and executing municipal debt products with 31 questions and understanding muni issuance requirements with 10.
The content outline also provides potential test takers with a list of reference materials and sample questions.
Of the 1,679 individuals who took the pilot test, 84% passed. The pilot exam participants represented roughly 41% of the MA market and more than 50% of MA firms had at least one professional take the exam.
