SIFMA provides comments Municipal Securities Rulemaking Board (MSRB) on dealer-affiliated Political Action Committees (PACs), Notice 2010-30.

In September 2009, the MSRB sought comments on whether broker-dealers should be required to disclose the covered political contributions made by PACs that are controlled by an affiliated bank or bank holding company, in addition to those PACs controlled by the broker-dealer or its municipal finance professionals (MFPs) as currently required under the Rule 3. In the current Notice, the MSRB scales back this requirement by proposing that broker-dealers disclose the identities of affiliated PACs (Affiliated PACs) without disclosing their contributions.

The MSRB should not require broker-dealers to disclose the names of Affiliated PACs given that it would create a false impression of linkage between the broker-dealer and the PACs, would be contrary to the best practice of establishing informational barriers, and is not within the MSRB’s jurisdiction. Rather, the MSRB should focus on the relevant goal of preventing coordination between broker-dealers and such PACs. We believe that the MSRB’s prior guidance and its interpretation on Affiliated PACs properly achieve this goal. However, to the extent the MSRB decides to require disclosure of the identities of Affiliated PACs, it should clearly define Affiliated PACs, as it did in the September 2009 notice, to affiliated bank and bank holding company PACs.