What MSRB compliance advisories tell dealers, muni advisors
WASHINGTON – The Municipal Securities Rulemaking Board has issued separate compliance advisories for broker-dealers and municipal advisors, part of the MSRB’s initiative to shift its focus away from the busy rulemaking of years past and towards helping firms comply with existing regulations.
The two MSRB advisories, released Tuesday, provide information that the MSRB said it intends as a supplement for firms assessing their own compliance policies and procedures.
The advisories are not formal rule interpretations and do not create any new standards of conduct, the MSRB emphasized.
The documents cover a variety of considerations for both professions, such as best execution and markup disclosure for dealers, as well as supervision and professional standards for muni advisors.
Both advisories focus on the importance of firms' policies and procedures clearly outlining the steps employees should take to ensure compliance with the rules.
The section on best execution in the dealer advisory, for example, asks, “Do the procedures describe the firm’s process to ascertain the best market for the security and the frequency for evaluating whether that process remains reasonable?”
The muni advisor advisory’s section on the duties of municipal advisors asks, “Do the procedures describe the process the firm undertakes in reviewing a third party’s recommendation?”
The considerations provided in the advisories are not a safe harbor and are not comprehensive, but are intended as “practical examples,” the MSRB said.