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

 MSRB PROVIDES UPDATE ON UNDERWRITER FAIR DEALING PROPOSAL

The MSRB announced today that the Securities and Exchange Commission (SEC) is seeking additional time to consider its proposal regarding the duties of underwriters to state and local government issuers under the MSRB’s “fair dealing” rule. The proposal would for the first time establish detailed obligations of underwriters of municipal securities to their state and local government clients regarding clear disclosure of risks and conflicts of interest, among other things.

The proposal was published in the Federal Register on September 9, 2011, and an amendment to the proposal was published on November 21, 2011. Under federal law, the SEC had 90 days from September 9 to approve or disapprove the proposed rule change, or institute proceedings to determine whether to approve or disapprove the proposed rule change. The 90-day period ended December 8, 2011.

On December 9, 2011, the SEC published a notice and order to institute proceedings pursuant to Section 19(b)(2)(B) of the Securities Exchange Act to determine whether to approve or disapprove the MSRB’s proposed rule change. In its notice, the SEC said that the institution of the proceedings does not indicate it has reached any conclusions with respect to the proposed rule change, or that it will ultimately disapprove the proposed rule change. The SEC is however seeking additional input from interested parties on the issues presented by the proposed MSRB rule change.

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. 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. 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. MSRB is overseen by the Securities and Exchange Commission and Congress.

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