MSRB Says 21 Is Its Lucky Number, for Now

WASHINGTON — The Municipal Securities Rulemaking Board wants to keep a 21-member board for another year, from Oct. 1, 2011 through Oct. 1, 2012, until it determines what size the MSRB should be on a permanent basis.

The board has asked the Securities and Exchange Commission to approve the temporary continuation of the transitional structure in proposed amendments to its Rule A-3 on membership that it filed with the commission on Thursday.

The SEC announced Friday that it plans to publish the proposed amendments in the Federal Register the week of March 7 and seek public comments on them for 21 days after that.

The board is seeking five new members to serve three-year terms for its next year, beginning Oct. 1. Three of them must be from regulated entities — banks, broker-dealers, or muni advisers — and two must be public members.

The MSRB was directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted on July 21, to reconstitute itself with a majority of independent public board members, similar to other self-regulatory organizations.

Before that, the board had 15 members, 10 of whom were from regulated broker-dealers and banks. Of the 15, five were representatives from securities firms, five were from banks, and five were public members.

Dodd-Frank stated that the new majority independent board should be at least 15 members, but permitted the MSRB to increase its size, as long as the total number of board members was an odd number.

The board decided in August to increase its size to 21 members so that it could retain the historical knowledge of the MSRB members at that time.

If the SEC approves the 21-member board for another year, the MSRB will have plenty of time to determine its most appropriate size. It could keep the number at 21, go back to 15 members, or decide on some other number, sources said.

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Washington
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