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Contact: Jennifer Galloway, Chief Communications Officer
             (703) 797-6670
             jgalloway@msrb.org


MUNICIPAL SECURITIES RULEMAKING BOARD FILES INTERPRETIVE GUIDANCE AND
REQUESTS COMMENT ON ADDITIONAL POLITICAL CONTRIBUTIONS DISCLOSURE  

The Municipal Securities Rulemaking Board (MSRB) today filed with the Securities and Exchange Commission (SEC) a proposed rule change consisting of interpretive guidance in connection with MSRB Rule G-37, on political contributions and prohibitions on municipal securities business. The proposed interpretation provides guidance on factors that may result in a political action committee (PAC) affiliated with a broker, dealer or municipal securities dealer being viewed as controlled by the dealer or its municipal finance professionals. In addition, the MSRB is seeking industry comment on whether to require dealers to disclose the names of their affiliated PACs for public scrutiny.

“Today’s interpretation and guidance is responding to changes in corporate structures among regulated dealers,” said MSRB Executive Director Lynnette Kelly Hotchkiss. “The MSRB reviews existing rules on a regular basis to consider the effect of market developments on the activities of dealers and to ensure that the rules reflect any substantive changes.”

Entities affiliated with dealers, such as banks and bank holding companies, operate PACs that make contributions to issuer officials and such PACs may be controlled by dealers or their municipal finance professionals and therefore subject to Rule G-37. Today’s proposed interpretation would provide additional guidance with regard to the potential for affiliated PACs to be viewed as dealer-controlled PACs. There is the potential for contributions to issuer officials by affiliated PACs to be used by dealers or their professionals to circumvent Rule G-37 as indirect contributions for the purpose of obtaining or retaining municipal securities business.  

Today’s rule interpretation would become effective 60 days after SEC approval and comments should be directed to the SEC. In addition, the MSRB is accepting comments on requiring certain disclosures related to dealers’ affiliated PACs through October 29, 2010. The MSRB will decide whether to require these disclosures following a full review of the comments and discussion by the MSRB Board.

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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