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Proposed Rule A-16 on Examination Fees


On November 5, 2009, the Municipal Securities Rulemaking Board (“Board” or “MSRB”) filed with the Securities and Exchange Commission (“SEC”) new Rule A-16 on examination fees, which became effective upon filing.[1]  This new rule establishes examination fees assessed on persons taking certain qualification examinations as of January 4, 2010.  Any person associated with a broker, dealer or municipal securities dealer (“dealer”) engaged in municipal securities activities who is a municipal securities representative, municipal securities principal, or municipal fund securities limited principal must take and pass a qualification examination to demonstrate competence in each area in which he or she intends to work.  The Series 51 (Municipal Fund Securities Limited Principal Qualification Examination), Series 52 (Municipal Securities Representative Qualification Examination), and Series 53 (Municipal Securities Principal Qualification Examination) are developed, maintained, and owned by the MSRB.  These examinations are intended to safeguard the investing public by helping to ensure that certain persons associated with dealers meet minimum qualifications to perform their job.  Given this purpose, the examinations seek to measure accurately and reliably the degree to which each candidate possesses the knowledge, skills and abilities necessary to perform his or her job.  The Series 51 examination is 1 1/2 hours and consists of 60 multiple-choice questions, and the Series 52 and 53 examinations are 3 hours each and consist of 100 multiple-choice questions per examination.

Currently, the fee assessed by the Financial Industry Regulatory Authority (“FINRA”), which administers the examinations on behalf of the MSRB, is $85 for the Series 51 examination, $95 for the Series 52 examination, and $95 for the Series 53 examination.  At present, FINRA receives the entire amount of the fee for each of the examinations, which is intended to cover the cost to FINRA to schedule, administer the examinations, maintain records, and undertake systems changes.  Pursuant to the new rule, the MSRB will assess a development fee of $60 per examination, which will be collected by FINRA along with FINRA’s administrative fee.  With the addition of the MSRB development fee, the total fee will be $145 for the Series 51 examination, $155 for the Series 52 examination, and $155 for the Series 53 examination.  On a periodic basis, FINRA will remit the fees it collects on behalf of the MSRB for development of the examinations to the MSRB and will retain the administrative fees it collects for the delivery of the examinations.  

The proposed MSRB development fee is intended to partially cover costs incurred to develop and implement the examinations, costs associated with monitoring the examinations for effectiveness, and costs associated with updating the examinations’ content and questions.  The development fees will be effective as of January 4, 2010.

Questions about the new rule should be directed to Lawrence P. Sandor, Senior Associate General Counsel at (703) 797-6600. 

November 5, 2009

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Rule A-16:  Examination Fees

Every individual who takes the Municipal Fund Securities Limited Principal Qualification Examination (Series 51), Municipal Securities Representative Qualification Examination (Series 52), or Municipal Securities Principal Qualification Examination (Series 53) shall pay to the Board a fee of $60 per examination for the development of the examination. The examinations are administered by the Financial Industry Regulatory Authority (“FINRA”).  The examination fees are collected by FINRA and are in addition to any fees charged by FINRA for the administration and delivery of the examinations.  

[1] File No. SR-MSRB-2009-16.  Comments on the new rule should be submitted to the SEC and should reference this file number.

[2] New language is underlined.