February 28, 2018

Brent J. Fields
Secretary
Securities and Exchange Commission
100 F Street NE.
Washington, DC 20549-1090

Re: File No. SR-MSRB-2018-01; Proposed Rule Change Consisting of Amendments to Rule G-21, on Advertising, Proposed New Rule G40, on Advertising by Municipal Advisors, and a Technical Amendment to Rule G-42, on Duties of Non-Solicitor Municipal Advisors

Dear Mr. Fields:

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates this opportunity to respond to the Municipal Securities Rulemaking Board’s (the “MSRB’s”) rule filing SR-MSRB-2018-01(the “Proposal”),2 which would amend Rule G-21, on advertising, proposed new Rule G-40, on advertising by municipal advisors, and a technical amendment to Rule G-42 on the duties of non-solicitor municipal advisors. SIFMA and its members appreciate the MSRB’s efforts to update MSRB Rule G-21. We agree with the principles in the rules that communications to the public must be consistent with fair dealing duties and in good faith, must be fair and balanced, and must provide a sound basis for evaluating the facts in regard to any particular security. We are pleased that, at long last, there will be a move towards leveling of the regulatory playing field between brokers, dealers, and municipal securities dealers (collectively, “dealers”), who have long been regulated by MSRB Rule G-21, and non-dealer municipal advisors, whose advertising activities will become regulated under new MSRB Rule G-40.

However, for the reasons stated below, SIFMA urges the Securities Exchange Commission (“SEC” or Commission”) to institute disapproval proceedings regarding the proposal in its current form, as the rule amendments still do not put dealer municipal advisors and non-dealer municipal advisors on a level regulatory playing field, lack clarity in critical areas, unnecessarily fail to harmonize the rules with existing Financial Industry and Regulatory Authority (“FINRA”) rules, and unnecessarily increase compliance burdens.

I. If MSRB Rule G-21 Does Not Incorporate FINRA Rule 2210 by Reference, Then the Rules Should Be More Closely Harmonized

The MSRB has summarily dismissed SIFMA request to harmonize FINRA Rule 2210 and MSRB Rule G-21 to govern communications by a dealer. SIFMA and its members feel that it is necessary for Rule G-21 to be more closely harmonized with FINRA Rule 2210. The current Rule G-21 and its draft amendments do not reflect the current construction of FINRA Rule 2210, which divides communications with the public into three categories: retail communications, correspondence,3 and institutional communications. FINRA Rule 2210 establishes different requirements for retail communications and institutional communications. This approach takes into account the critical differences in the intended audiences. Generally, FINRA’s rule on retail communications requires pre-use approval by a principal, while there is no such requirement for institutional communications. Instead, dealers are given the ability to establish review procedures for institutional communications that are appropriate to their business, subject to certain specified parameters.

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1 SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.

2 83 Fed Reg. 5474 (Feb. 7, 2018) (File No. SR-MSRB-2018-01).

3 We recognize the regulation of correspondence is handled separately in FINRA Rule 3110, pursuant to FINRA Rule 2210(b)(2).