The Municipal Securities Rulemaking Board has for the first time has made public its policy on interpretive guidance, an action the MSRB said is consistent with its focus on regulatory clarity and efficiency.
The policy explains the differences between oral and written interpretive guidance, and also discusses situations in which the MSRB cannot provide guidance. The MSRB supplies both forms of guidance in response to requests from regulated entities, including broker-dealers,, municipal advisors, issuers, attorneys, investors and other market participants.
Before seeking additional guidance, requesters should first thoroughly review the written rule in question as well as any interpretive notices or letters associated with it, according to the policy.
In some cases, such as with the board’s Rule G-17 on fair dealing, the interpretive notice can be quite lengthy and fill many pages. If there are still additional questions, MSRB staff can answer questions by telephone and provide oral guidance. Requesters generally will have to identify themselves and describe their situation, according to the policy. But the guidance provided by MSRB staff does not have the same force as established interpretations.
“Because of the informal and undocumented nature of phone inquiries, oral responses cannot be relied upon by regulated entities or their counsel as formal positions of the MSRB,” the policy states.
Questions too complex for oral guidance can be submitted in written form, again identifying the parties involved, and the MSRB may respond with a written interpretation. Written requests are more formal, and responses may later be filed with the Securities and Exchange Commission and published to the MSRB website, according to the policy. The published document will identify the requester.
MSRB will not respond to requests for legal advice, or to requests that do not identify the parties involved, the policy states. The MSRB is also unable to provide interpretations that relate to regulatory actions or examinations undertaken by the SEC, Financial Industry Regulatory Authority, Federal Reserve Board, Federal Deposit Insurance Corporation, or the Office of the Comptroller of the Currency.
