The Municipal Securities Rulemaking Board has adopted rule changes allowing it to have 21 board members on a permanent basis after the Securities and Exchange Commission approved the larger size.

The changes to the MSRB’s Rule A-3 on membership, which the SEC approved Wednesday, would allow board members who were elected before July 2011 and whose terms would end on or after Sept. 30, 2012, to be considered for extensions of up to two more years. The goal of the longer terms would be to create three classes of seven members each whose terms expire on a staggered basis every three years.

The board has been operating with 21 members on a transitional basis since last year.

“Despite the significant changes implemented last year, the board effectively set the MSRB on its new course,” said MSRB executive director Lynnette Hotchkiss. “Under the chairmanship of Michael Bartolotta, the board worked tirelessly to develop rules and market transparency initiatives that solidly reflect the sound and varied perspectives of our diverse board members. We believe that a permanent 21-member board is in the best interests of investors and municipal entities.”

Bartolotta, vice chairman of First Southwest Co., was succeeded as MSRB chairman by Alan Polsky, senior vice president of Minneapolis-based Dougherty & Co., on Oct. 1.

Historically, the board had 15 members — five from securities firms, five from banks, and five from the public, including a representative of issuers and someone representing investors.

But the Dodd-Frank Act required the board to have a majority of public members, like other self-regulatory organizations, and also gave the MSRB regulatory authority over independent municipal advisors. The act said the board should be composed of 15 or more members, and that one member would have to represent investors, one would have to represent issuers and one would have to be a muni expert.

After Dodd-Frank was enacted in July 2010, the MSRB obtained the SEC’s permission to set up a temporary 21-member transitional board, 11 of which would be public members and three of which would be from the independent municipal advisory community. The larger size allowed then-existing members to stay on the board.

The MSRB conducted a survey on the size of the board and members indicated that 21 was the appropriate size for the board to carry out its mission and objectives. In August, it asked the SEC to approve the larger board.

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