WASHINGTON — Issuers, non-dealer municipal advisors, and financial reform advocates are upset that the Municipal Securities Rulemaking Board' "public members" continue to have close ties to dealer firms, complaining this undermines the Dodd-Frank Act's intent that the board be majority public.

They made their views clear in comments to the Securities and Exchange Commission on the MSRB's proposed rule changes that would weaken the standard of independence for the board. Of the five sets of comments submitted to the SEC, none supported the MSRB's effort to revise its Rule A-3, which governs how board members are appointed. The revision would follow the last one that occurred after the 2010 Dodd-Frank Act mandated that board be made up of a majority of public member. The rule states that public board members cannot have worked for a broker-dealer in the past two years and cannot have a "material business relationship" with broker-dealers, which it defines as a "relationship with any municipal securities broker, municipal securities dealer, or municipal advisor, whether compensatory otherwise, that reasonably could affect the independent judgment or decision making of the individual."

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