MSRB, FINRA, SEC Work Together on Dodd-Frank Rules and Enforcement

The Municipal Securities Rulemaking Board (MSRB) is working on Dodd-Frank mandated initiatives to clarify and enforce rules governing municipal advice and transactions, according to a conference call Monday with the MSRB Chairman Michael Bartolotta (left), Executive Director Lynette Kelly Hotchkiss and Chief Communications Officer Jennifer Galloway.

The MSRB expanded its board of governors in 2010 and initiated a public member majority structure, with 11 public and 10 private members, chaired by Bartolotta, who is vice chairman of First Southwest Co. The board, which usually meets four times a year, has already met five times since October, Galloway said.

The board has also had regular meetings with FINRA’s Chairman and CEO Rick Ketchum (left) and SEC Commissioner Elisse Walter (right)—the most recent one last week—“so board members can have a personal interaction with Rick and Elisse,” Galloway noted. “Elisse Walter is particularly interested in the municipal market, and Rick Ketchum brings his municipal staff,” she added.

The MSRB wants to be “a resource to FINRA as FINRA enforces the rules,” Bartolotta explained.

The board had a special meeting in May to look at comments on pending rules stemming from Dodd-Frank legislation and will be proposing rules, with some alterations, to the SEC in June. Specifically the call focused on these three rules:

Conduct of Municipal Securities and Municipal Advisory Activities Rule G-17

For “advisors and dealers,” Bartolotta explained, this rule clarifies the need for “fair dealing” when dealing with municipalities.