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

MSRB RECEIVES SEC APPROVAL TO ESTABLISH MAJORITY PUBLIC GOVERNING BOARD

Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) today received approval from the Securities and Exchange Commission (SEC) to change the composition of its governing board to a majority of public members with municipal advisor representation to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The Dodd-Frank Act requires the MSRB board of directors to consist of a majority of public members and to include representation of municipal advisors, broker-dealers and banks. The MSRB plans to seat on October 1, 2010, a governing board that includes 11 public members and 10 industry members. To comply with the Dodd-Frank Act, at least one public member of the board must represent investors, at least one public member must represent state and local government entities, and at least one public member must have municipal industry knowledge or experience.

The SEC’s approval incorporates two clarifying amendments in the transitional composition rule for the MSRB board of directors. One amendment requires that MSRB municipal advisor representatives not be affiliated with any broker, dealer or municipal securities dealer. The second amendment requires that the MSRB’s Nominating Committee be established after October 1, 2010, that it be composed of a majority of public representatives and that fair representation of banks, broker-dealers and municipal advisors is assured.

Beginning October 1, 2010, the Dodd-Frank Act broadens the MSRB’s mission to protect not only investors and the public interest but also state and local government entities and others whose credit stands behind municipal bonds. It requires the MSRB to write rules for municipal advisors that provide advice to these entities on municipal securities or investment-related matters or that solicit certain business from those entities on behalf of others. This expanded authority is in addition to the MSRB’s existing regulation of banks and securities firms that engage in municipal securities business.

The Municipal Securities Rulemaking Board (MSRB) was established by Congress in 1975 with the mission to protect investors, issuers and the public interest and to promote efficiency, competition and capital formation. MSRB is a private, self-regulatory organization governed by an independent board of directors with market knowledge and expertise. MSRB does not receive federal appropriations and is funded primarily through fees paid by regulated entities. MSRB is overseen by Congress and the Securities and Exchange Commission.

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