Municipal Securities Rulemaking Board

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The Municipal Securities Rulemaking Board, often referred to simply as the MSRB, makes rules regulating broker-dealers and banks that deal in municipal bonds, municipal notes, and other municipal securities in the United States. In addition, the MSRB operates the Electronic Municipal Market Access (EMMA) system (http://emma.msrb.org), which provides free on-line access to comprehensive municipal securities disclosure documents and trade price information.

The Municipal Securities Rulemaking Board was established in 1975 by the U.S. Congress to develop rules regulating security firms and banks involved in underwriting, trading, and selling municipal securities -- bonds, notes and other securities issued by states, cities, and counties or their agencies to help finance public projects or for other public policy purposes. MSRB rules are designed to protect investors and the public interest and to ensure a fair and efficient marketplace. The MSRB is composed of members from the municipal securities dealer community and the public. Like the Financial Industry Regulatory Authority (FINRA), the MSRB is a self-regulatory organization that is subject to oversight by the Securities and Exchange Commission (SEC).

The MSRB's congressional mandate includes state-operated 529 plans since they are securities programs administered by state governments. Thus, municipal securities dealers marketing 529 plans must comply with MSRB rules.

Interestingly, the MSRB -- while responsible for rulemaking with respect to the municipal securities activities of municipal securities dealers -- is not tasked with enforcing any of the rules applicable to the municipal securities market. Instead, Congress assigned this task to the SEC, FINRA, the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS), which enforce MSRB rules along with the other securities and banking rules applicable to the broker-dealers and banks subject to their respective jurisdictions. In addition, while the MSRB sets standards for all municipal securities dealers, MSRB rules do not apply to issuers of municipal securities, which Congress generally exempted from most provisions of the federal securities laws (such as the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940) otherwise applicable to private-sector issuers of corporate and other types of securities.