The Financial Industry Regulatory Authority is reminding broker-dealers that conduct investment-related activities with municipal clients to determine if they need to register as a municipal advisor.
FINRA’s Regulatory Notice 19-28, released Friday, states that recent FINRA exams have found that some broker-dealers are engaged in investment-related activities with municipal clients, but have not registered as municipal advisors and do not have reasonably designed supervisory systems and controls to determine whether they are required to do so.
Release of FINRA’s notice coincides with new Municipal Securities Rulemaking Board advertising rules that become effective on Aug. 23. MSRB’s rules concern when a broker-dealer or municipal advisor’s use of social media becomes an “advertisement” under MSRB Rules G-21 and G-40.
Comments were also due by Monday on MSRB Rule G-23, which sets the ethical standards and disclosure requirements for broker-dealers who act as financial advisors to issuers involving municipal securities.