SIFMA Submits Comments to MSRB on Draft Amendments to MSRB Rule G-37
On September 30, SIFMA submitted comments to the Municipal Securities Rulemaking Board (MSRB) on Regulatory Notice 2014-15 containing draft amendments to MSRB Rule G-37 on political contributions by municipal securities dealers (Dealers) and related prohibitions on municipal securities business, extending the Rule to cover municipal advisors and making certain other changes impacting both Dealers and municipal advisors.
SIFMA commended MSRB for taking steps with the Draft Amendments to create a level playing field for all market participants in the area of political contributions. SIFMA believes that it is important that all market participants are subject to the same rules governing political activity, and the draft amendments significantly advance that interest.
However, SIFMA's comments are submitted to bring further consistency among market participants and in consideration of the heightened constitutional standards set forth in the Supreme Court's decision in McCutcheon v. FEC, 134 S. Ct. 1434 (2014). These comments include, but are not limited to suggesting:
- The time period between SEC approval of the Draft Amendments and their effective date, proposed to be two weeks, should be lengthened to at least 6 months as has been the case in other, similar "pay-to-play" rules.
- The definition of "municipal advisor representative" should be revised to include only those associated persons primarily engaged in municipal advisory activities, in conformity with the definition of "municipal finance representative" for Dealers.
- The de minimis exception for political contributions to candidates for whom an individual is entitled to vote under Rule G-37 ($250) should be revised to be consistent with the analogous de minimis exceptions under SEC Rule 206(4)-5 for investment advisers and CFTC Rule 23.451 for swap-dealers ($350). Additionally, the "look-back" provision of the Rule should be revised to include an exception for any contributions made by an individual who was covered by the SEC or CFTC pay-to-play rules at the time of the contribution and contributed within the de minimis amounts under those rules.
- The cross-ban provision for Dealer municipal advisors should be eliminated in that it is overly broad and does not serve the purpose of attempting to eliminate contributions that are linked to the relevant business.
SIFMA Responds to MSRB Seeking Input on Potential Enhancements to Price Transparency in the Municipal Market
On September 25, SIFMA submitted comments to the Municipal Securities Rulemaking Board (MSRB), in which the MSRB requested comment on enhancements to the post-trade municipal securities transaction data that would be disseminated from a new central transparency platform (CTP).
SIFMA is pleased with the methodical manner in which the MSRB has proceeded with obtaining input regarding the development of the CTP, but remains concerned about the costs of certain proposed changes, relative to their assumed benefits, particularly related to the proposed addition of a conditional trading commitment indicator and the changes related to dealer compensation arrangements.
Additionally, SIFMA feels strongly that the MSRB should clarify its guidance regarding the use of the List Offering Price/Takedown Transaction indicator.
SIFMA Submits Comments to SEC regarding MSRB Best Execution Rule Proposal and Changes to SMMP
On September 29, SIFMA submitted comments on the Municipal Securities Rulemaking Board’s (MSRB) filing with the Securities and Exchange Commission (SEC) on notice of filing of a Proposed Rule Change Consisting of Rule G-18, on Best Execution of Transactions in Municipal Securities, and Amendments to Rule G-48, on Transactions with Sophisticated Municipal Market Professionals (SMMP), and Rule D-15, on the Definition of SMMP (the Proposal).
SIFMA supports raising the execution standard in the municipal market for retail customers in a way that reflects the current market structure and unique characteristics of the municipal market. SIFMA believes that the MSRB has thoughtfully developed and proposed revisions to MSRB Rule G-18 that reflect the unique characteristics of the municipal securities market and warrant certain departures from FINRA 5310. SIFMA also supports the proposed changes to Rule G-48.
However, SIFMA has significant concerns regarding the proposed changes to Rule D-15 and urges the SEC not to move forward with the proposed changes to D-15 at this time to allow the MSRB to solicit public comments for its board members to consider. In the alternative, SIFMA is requesting that the SEC adopt SIFMA’s proposed revisions to Rule D-15.
MSRB Makes Kroll Bond Ratings Available to the Public on EMMA
On September 29, the MSRB announced that public finance ratings from Kroll Bond Rating Agency (KBRA) will be available to the public on its Electronic Municipal Market Access (EMMA) website.
“The MSRB continues to expand the information available on EMMA to help investors make more informed decisions about municipal bonds,” said MSRB Executive Director Lynnette Kelly. “KBRA’s willingness to provide their ratings to investors free of charge through EMMA supports the MSRB’s goal to increase public access to market information.”
Amendments to MSRB Rule G-3 Become Effective on September 30
On September 30, the amendments to MSRB Rule G-3, on professional qualifications, Rule G-7, on information concerning associated persons, and Rule G-27, on supervision, became effective. The amendments limit the scope of permissible activities of a limited representative, eliminate the FINOP classification, qualification and numerical requirements in MSRB Rule G-3(d), and make technical and conforming amendments.
Registration Open: SIFMA’s 2014 Industry-Wide BCP Testing Initiative
As part of the ongoing securities industry testing initiative, on October 25, 2014, SIFMA will lead the 2014 industry-wide business continuity test where firms submit test orders and transactions to markets and utilities. The exercise will involve test transactions for equities, options, fixed income, foreign exchange, commercial paper, settlement, payments, Treasury auctions and market data. The test is supported by all major exchanges, markets and industry utilities. Registration is open until Friday, October 17.
SIFMA Blog: Pennsylvania + Wall
Table Top Exercise (TTX): A new addition in this year’s test is a Table Top Exercise (TTX). If your firm is interested in participating in this TTX please register and the registrant will then receive details regarding the remote, self-paced exercise that will make use of the crisis scenario being applied to this year’s exercise. The TTX will be executed in Friday, October 24. There will also be more information on the TTX as we move into the summer.
Table Top Exercise Scenario
Pandemic Influenza Continuity Exercise Series: Multiple Dates, Sep. – Dec., 2014: SIFMA is coordinating with government and private organizations to sponsor a two year series of pandemic influenza continuity exercises to mitigate vulnerabilities during a pandemic influenza outbreak; identify gaps or weaknesses in pandemic planning or in organization pandemic influenza continuity plans, policies, & procedures; and encourage public and private organizations to jointly plan for, and test, their pandemic influenza plans.
FEMA Pandemic Exercise
Sign up Today: Invest It Forward Volunteer Opportunities
Teachers across the country are asking you, our SIFMA member firms, to visit their SMG classes to promote financial and capital markets literacy this fall! Join SIFMA as we Invest It Forward™. Invest it Forward™ connects teachers and classrooms with financial industry professionals and firms to give young Americans a solid understanding of the capital markets system and the invaluable tools to achieve their dreams. It’s so easy.
You register online, select a local school and The SIFMA Foundation provides you with a tailor-made presentation based on the subject your teacher requests. Do it alone or as part of a team. You too can host a classroom at your firm’s office. Register directly at http://www.sifma.org/education/sifma-foundation/volunteer-and-firm-activities/ or contact Michelle Noguchi at firstname.lastname@example.org / 212.313.1224 for further details.
New 2015 Edition of "Sources: A Resource Directory"
SIFMA is pleased to announce the upcoming publication of a new 2015 edition of "Sources: A Resource Directory.” Compiled by SIFMA, Sources is an easy-to-use guide of products and services for the securities and financial industry. Service providers in financial services are invited to submit information for publication; SIFMA’s Associate Members are included at no cost as a benefit of membership.
SIFMA Bookstore Spotlight: The Fundamentals of Municipal Bonds
Reuters has called this text "an excellent general primer on the market." This informative volume is the newly revised and updated sixth edition of the long-heralded classic text on the municipal securities market. The text provides a basic understanding of the market for a wide range of readers, including experienced professionals – such as investment bankers, traders, brokers, and professional investors – as well as public officials, academicians, students, and sophisticated individuals.
Read More and Purchase Book