Extent and type of municipal securities activities. Your letter dated March 23, 1978 concerning compliance with the Municipal Securities Rulemaking Board's requirements has been referred to me for response.

The Municipal Securities Rulemaking Board was established by the Securities Acts Amendments of 1975 as the primary rulemaking authority with respect to the activities of municipal securities brokers and dealers and with respect to transactions in municipal securities. The Board's rules apply to each municipal securities broker and municipal securities dealer within the meaning of sections 3(a)(31) and 3(a)(30), respectively, of the Securities Exchange Act of 1934, as amended (the "Act"), and all municipal securities brokers and dealers regardless of the volume of their municipal securities business, are subject to the rules promulgated by the Board insofar as transactions in municipal securities are concerned, whether such transactions are solicited or unsolicited.

Under section 15B(b)(2)(J) of the Act, the Board is directed to prescribe fees and charges payable by each municipal securities dealer and municipal securities broker to defray the costs and expenses of operating the Board. Pursuant to this authority, the Board adopted rules A-12 and A-14 which impose an initial fee and an annual fee on each municipal securities broker and municipal securities dealer. A copy of these rules are enclosed.

In approving MSRB rules A-12 and A-14, the Securities and Exchange Commission determined that these assessments are consistent with the statutory requirement that the MSRB be self-funding. We therefore request that you comply with these rules and forward your checks to us promptly. MSRB interpretation of May 3, 1978.