The MSRB Professional Qualification Program fosters competency of municipal professionals and compliance with MSRB rules through required examinations and continuing education. The Dodd-Frank Wall Street Reform and Consumer Protection Act expanded the MSRB’s jurisdiction to include municipal advisor regulation and requires that the MSRB set standards of professional qualification for municipal advisors. Currently, there are no professional qualification requirements that apply to municipal advisors. However, to engage in municipal advisory activities, municipal advisors must be registered with the MSRB and the Securities and Exchange Commission.
Established MSRB rules govern the qualification, classification, disqualification, disciplinary actions and related professional requirements for municipal securities brokers and dealers, which include securities firms and banks. In order to engage in municipal securities activities, dealers must also be registered with the MSRB and the Securities and Exchange Commission. Dealers that are municipal advisors must indicate this during the registration process. The associated persons of a dealer are classified by their activities.
Classifications of Principals and Representatives
The MSRB classifies municipal securities professionals into five groups based on their function.
- Municipal securities representatives perform fundamental functions such as selling, trading and underwriting municipal securities.
- Municipal securities sales limited representatives perform activities limited exclusively to sales to and purchases from customers of municipal securities.
- Municipal securities principals manage, direct or supervise the municipal securities activities of a securities firm or bank dealer.
- Municipal securities sales principals are associated with securities firms and perform supervisory activities with respect to municipal securities that are limited to sales to and purchases from customers of municipal securities.
- Financial and operations principals supervise the financial reporting functions and back office operations of a securities firm.
Each class of associated persons has certain responsibilities and must satisfy qualification requirements as outlined in MSRB Rule G-3. Read more about the categories of registered persons and the supervisory obligations of registered principals in MSRB Notice 2011-62.
MSRB Study Outlines and Guides
The MSRB provides study outlines and a guide for its municipal securities qualification examinations.
FINRA administers qualification examinations for the other categories of municipal securities professionals.
- Series 7 - The General Securities Representative Examination qualifies an individual as a municipal securities sales limited representative.
- Series 10 - The General Securities Sales Supervisor's Examination qualifies a municipal securities sales supervisor.
- Series 27 - The Financial and Operations Principal Examination
Study outlines for these examinations are available at www.finra.org.
The Securities Industry/Regulatory Council on Continuing Education website provides information about the continuing education program for municipal securities dealers.