WASHINGTON — The Municipal Securities Rulemaking Board has seated its new board of directors and named municipal advisor regulations as its top priority for the 2014 fiscal year, which begins Tuesday.
The board includes seven new members as well as new officers. Daniel Heimowitz, a managing director at RBC Capital Markets who joined the board in 2011, replaces Jay Goldstone as chair, the MSRB said in a notice. Joseph Geraci, managing director and co-head of municipal markets at Citi, who also joined the board in 2011, will serve as vice chair.
The new board will oversee the MSRB’s current priorities, which include the municipal advisor rulemaking, development of a central transparency platform, protecting municipal entities, and rationalizing its rules.
The MSRB will need to develop or alter several rules in the wake of the Securities and Exchange Commission’s adoption of a municipal advisor registration rule last month. That rule defines which individuals and firms would have a federal fiduciary duty under the Dodd-Frank Act to put their issuer clients’ interests first above their own. Broker-dealers are questioning how the SEC’s definition of “municipal advisor” squares with the term “financial advisor” in MSRB Rule G-23, which prohibits firms from underwriting bonds after serving as “financial advisor” on the deal.
The board announced it will be putting out rules for public comment and will also be at work developing a professional qualifications exam for registered MAs.
The MSRB will also spend the new fiscal year continuing to work on price transparency, a major theme of last year’s agenda as well. The board’s efforts will include strengthening its EMMA website by incorporating more post-trade pricing data. The board will also consider additional price transparency rulemaking, according to its release. Previous MSRB statements and requests for comments have indicated the board is searching for ways to incorporate pre-trade data into its transparency platform.
The MSRB also announced that its efforts this year may include an expanded umbrella of protection under Dodd-Frank. That law handed MSRB a mandate to protect “municipal entities,” which might go beyond just state and local governments and their subdivisions.
“MSRB will evaluate the broader range of municipal entities, beyond traditional issuers of municipal securities, with which municipal securities dealers and municipal advisors interact, and begin to establish the foundation for potential regulatory, educational and outreach activities to fulfill this expanded mandate,” the board stated.
The MSRB also plans to continue efforts to simplify and rationalize its rulebook, which it has been trying to streamline over the past months. The next year will also see a focus on rulemaking informed by a thorough analysis of costs, benefits and alternatives as set out in the board’s new economic analysis policy.