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Contact: Jennifer A. Galloway, Chief Communications Officer
            (703) 797-6600
             jgalloway@msrb.org

MSRB ENHANCES PROTECTIONS FOR INVESTORS AGAINST
UNEXEPECTED CHANGES TO BOND AUTHORIZING DOCUMENTS

Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) has received approval from the Securities and Exchange Commission to enhance protections for investors in municipal securities against unexpected changes in bond authorizing documents while preserving issuers’ legitimate interest in updating those documents.

The amendments to MSRB Rule G-11, on primary offering practices, generally prohibit municipal securities dealers from providing consent to changes to authorizing documents. The amendments also will enhance transparency regarding the practice of obtaining bondholder consents from dealers, and will take effect February 3, 2014.

The changes seek to ensure that investors are protected from situations in which an underwriter, which may own bonds momentarily during the initial distribution process but does not share the same economic interests as bondholders, could agree to changes to the authorizing documents in lieu of the bondholders. The amendments include several carefully defined exceptions to the prohibition to provide potential options for amending bond authorizing documents where other appropriate safeguards for investors exist.

“We are pleased that the final rule adequately balances the need to protect investors and the need for issuers to update bond authorizing documents,” said MSRB Executive Director Lynnette Kelly.

The change to MSRB Rule G-11 furthers the MSRB’s mission of protecting both investors in municipal securities and the municipal entities that issue them.

The Municipal Securities Rulemaking Board (MSRB) protects and strengthens the municipal bond market, enabling access to capital, economic growth, and societal progress in tens of thousands of communities across the country. The MSRB fulfills this mission by creating trust in our market through informed regulation of dealers and municipal advisors that protects investors, issuers and the public interest; building technology systems that power our market and provide transparency for issuers, institutions, and the investing public; and serving as the steward of market data that empowers better decisions and fuels innovation for the future. The MSRB is a self-regulatory organization governed by a board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is overseen by the Securities and Exchange Commission and Congress.

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