Notice of Technical Amendments to Rule G-3, on Professional Qualifications
On August 3, 2004, the Municipal Securities Rulemaking Board (“MSRB”) filed with the Securities and Exchange Commission (“SEC”) a proposed rule change consisting of technical amendments to Rule G-3, on professional qualifications. [1] The amendments delete an expired transition period and make explicit that Series 51 municipal fund securities limited principals are required to comply with all obligations imposed by MSRB rules on Series 53 municipal securities principals. The amendments became effective upon filing with the SEC.
SUMMARY OF AMENDMENT
Rule G-3, on professional qualifications, currently includes a temporary transition period, which expired on March 31, 2003. The transition period allowed Series 24 general securities principal and Series 26 investment company/variable contracts limited principals, without further qualification, to supervise the activities of a broker, dealer or municipal securities dealer (collectively referred to as “dealers”) relating to municipal fund securities. Since April 1, 2003, the MSRB has required that every dealer have either a municipal fund securities limited principal (Series 51) or a municipal securities principal (Series 53), as appropriate, to supervise the dealer’s activities relating to municipal fund securities even if these are the dealer’s only municipal securities activities. Accordingly, the MSRB is deleting the expired transition period from Rule G-3.
Rule G-3 also provides that any municipal fund securities limited principal (Series 51) may undertake all actions required or permitted to be taken by a traditional municipal securities principal (Series 53) under MSRB rules, but solely with respect to activities relating to municipal fund securities. Implicit in this authorization to act as a municipal securities principal is the reciprocal duty to comply with all obligations imposed by MSRB rules on municipal securities principals. The MSRB is amending Rule G-3 to make explicit this duty to comply with MSRB rules.
August 3, 2004
TEXT OF AMENDMENT [2]
Rule G-3. Classification of Principals and Representatives; Numerical Requirements; Testing; Continuing Education Requirements
No broker, dealer or municipal securities dealer or person who is a municipal securities representative, municipal securities principal, municipal securities sales principal or financial and operations principal (as hereafter defined) shall be qualified for purposes of rule G-2 unless such broker, dealer or municipal securities dealer or person meets the requirements of this rule.
(a) No change.
(b) Municipal Securities Principal; Municipal Fund Securities Limited Principal
(i)-(iii) No change
(iv) Municipal Fund Securities Limited Principal.
(A)-(B) No change.
(C) Actions as Municipal Securities Principal. Any municipal fund securities limited principal may undertake all actions required or permitted under any Board rule to be taken by a municipal securities principal, but solely with respect to activities related to municipal fund securities, and shall be subject to all provisions of Board rules applicable to municipal securities principals except to the extent inconsistent with this paragraph (b)(iv).
(D) No change.
[(E) Temporary Provisions for Municipal Fund Securities Limited Principal. Notwithstanding any other provision of this rule, until March 31, 2003, the following provisions shall apply to any broker, dealer or municipal securities dealer whose municipal securities activities are limited exclusively to municipal fund securities:
(1) the broker, dealer or municipal securities dealer may designate any person who has taken and passed the General Securities Principal Qualification Examination or Investment Company and Annuity Principal Qualification Examination as a municipal fund securities limited principal.
(2) any municipal fund securities limited principal designated as provided in clause (b)(iv)(E)(1) may undertake all actions required or permitted under any Board rule to be taken by a municipal securities principal to the same extent as set forth in subparagraph (b)(iv)(C).
(3) the broker, dealer or municipal securities dealer may count any municipal fund securities limited principal designated as provided in clause (b)(iv)(E)(1) toward the numerical requirement for municipal securities principal to the same extent as set forth in subparagraph (b)(iv)(D).
(4) On and after April 1, 2003, all municipal fund securities limited principals (including any municipal fund securities limited principals designated as provided in clause (b)(iv)(E)(1)) must be qualified as provided in subparagraph (b)(iv)(B).]
(c)-(h) No change.
