Municipal Securities Rulemaking Board
Encyclopedia
The Municipal Securities Rulemaking Board, often referred to as the MSRB, writes investor protection rules and other rules regulating broker-dealer
Broker-dealer
A broker-dealer is a term used in United States financial services regulations. It is a natural person, a company or other organization that trades securities for its own account or on behalf of its customers....

s and bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...

s in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 municipal securities market, including tax-exempt and taxable municipal bond
Municipal bond
A municipal bond is a bond issued by a city or other local government, or their agencies. Potential issuers of municipal bonds includes cities, counties, redevelopment agencies, special-purpose districts, school districts, public utility districts, publicly owned airports and seaports, and any...

s, municipal notes, and other securities issued by states, cities, and counties or their agencies to help finance public projects or for other public policy purposes. Among its investor protection rules, the MSRB is best known for adopting the first nation-wide Pay to Play
Pay to Play
Pay to play, sometimes pay for play, is a phrase used for a variety of situations in which money is exchanged for services or the privilege to engage in certain activities...

 rule, known as Rule G-37, designed to eliminate the use of political contributions to obtain municipal underwriting business from state and local governments. The MSRB's investor protection rules also apply to state-operated 529 plan
529 plan
A 529 plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary.- Overview :529 plans are named after section 529 of the Internal Revenue Code...

s marketed by broker-dealers, as well as to the underwriting, sales and trading of Build America Bonds
Build America Bonds
Build America Bonds are taxable municipal bonds that carry special tax credits and federal subsidies for either the bond issuer or the bondholder. Build America Bonds were created under Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act that U.S. President Barack...

. In addition, the MSRB operates the Electronic Municipal Market Access
Electronic Municipal Market Access
The Electronic Municipal Market Access system, operated by the Municipal Securities Rulemaking Board , serves as the official source for municipal securities disclosures and related market data...

 (EMMA) system (http://emma.msrb.org), which provides free on-line access to comprehensive municipal securities disclosure documents, trade prices, interest rate information, and market statistics.

The MSRB was originally established in 1975 by Congress to develop rules regulating security
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...

 firms and banks involved in underwriting, trading, and selling municipal securities. The MSRB is composed of members from regulated broker-dealers and banks as well as from the public. Like the Financial Industry Regulatory Authority
Financial Industry Regulatory Authority
In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. ...

 (FINRA), the MSRB is a self-regulatory organization that is subject to oversight by the Securities and Exchange Commission (SEC).

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...

 on July 21, 2010, the U.S. Congress broadened the MSRB's rulemaking authority to also regulate so-called municipal advisors, which include financial advisors, swap
Swap (finance)
In finance, a swap is a derivative in which counterparties exchange certain benefits of one party's financial instrument for those of the other party's financial instrument. The benefits in question depend on the type of financial instruments involved...

 advisors, brokers of guaranteed investment contract
Guaranteed Investment Contract
A guaranteed investment contract is a contract that guarantees repayment of principal and a fixed or floating interest rate for a predetermined period of time. Guaranteed investment contracts are typically issued by life insurance companies and marketed to institutions qualified for favorable tax...

s and other market participants that advise on the issuance of municipal securities and provide certain other types of advice to state and local governments, public pension funds and other municipal entities on municipal derivatives, investment strategies and other financial matters. The MSRB's investor protection rules will be extended to protect municipal entities as well. Beginning on October 1, 2010, the MSRB will be recomposed to consist of a majority of independent public members and to include representatives of municipal advisors.

MSRB rules are enforced by various other federal regulatory organizations, including the SEC, FINRA, the Federal Reserve System
Federal Reserve System
The Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907...

, the Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...

 (FDIC) and the Office of the Comptroller of the Currency
Office of the Comptroller of the Currency
The Office of the Comptroller of the Currency is a US federal agency established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States...

 (OCC). In addition, while the MSRB sets standards for broker-dealers, banks, and municipal advisors, MSRB rules do not apply to issuers of municipal securities or other municipal entities, which Congress generally exempted from most provisions of the federal securities laws (such as the Securities Act of 1933
Securities Act of 1933
Congress enacted the Securities Act of 1933 , in the aftermath of the stock market crash of 1929 and during the ensuing Great Depression...

, the Securities Exchange Act of 1934
Securities Exchange Act of 1934
The Securities Exchange Act of 1934 , , codified at et seq., is a law governing the secondary trading of securities in the United States of America. It was a sweeping piece of legislation...

 and the Investment Company Act of 1940
Investment Company Act of 1940
The Investment Company Act of 1940 is an act of Congress. It was passed as a United States Public Law on August 22, 1940, and is codified at through . Along with the Securities Exchange Act of 1934 and Investment Advisers Act of 1940, and extensive rules issued by the Securities and Exchange...

) otherwise applicable to private-sector issuers of corporate and other types of securities.

See also

  • List of finance topics
  • Financial Industry Regulatory Authority
    Financial Industry Regulatory Authority
    In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. ...

    , another U.S. regulatory organisation.
The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
x
OK