MSRB files amendments to modernize registration rule
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The Municipal Securities Rulemaking Board has filed a proposed rule change on Rule A-12 on registration with the Securities and Exchange Commission, which would give broker dealers, municipal securities dealers and municipal advisors until Jan. 31 to annually affirm the information on the Board’s consolidated electronic registration form.
The proposed rule change would also require the primary regulatory contact of a municipal advisor firm to be registered as a municipal advisor principal by taking the Series 54 exam.
It was filed for immediate effectiveness and will become operative on the first day of the 2023 annual affirmation period, Jan. 1, 2023. The MSRB voted to move forward on this action at its quarterly meeting in September.
The proposed change removes the burden of providing written evidence of having notified the Financial Industry Regulatory Authority or other applicable regulatory body, by removing the requirement of providing a PDF of such notice.
But dealers will now have to provide the evidence of the written notice on Form A-12 directly by including the point of contact at the registered securities association, the email address where the notice was sent, the date of such notification and the effective date the firm intends to begin engaging in municipal securities or municipal advisory activities.
It also “adds Supplementary Material .02, on notification requirements, which specifies that dealers that, after initial registration, subsequently amend their registration status to add municipal advisory activities as a line of business must provide notice to FINRA or as applicable, the FRB, FDIC, or OCC of the firm’s intent to conduct the new business activity,” the MSRB notice said.
“This aligns with the goal that the appropriate regulatory authority primarily responsible for examining dealers’ compliance with MSRB rules is continuously kept abreast of such line of business changes that subsequently add a new registration category for a firm post the dealer’s initial registration.”
The amended rule also requires regulated entities to provide information on successor firms, which the previous Rule A-12 did not require. This aligns Form A-12 with the SEC’s Form MA, which requires information about successor registrations.
The changes also add a new subparagraph, A-12(f) that requires municipal securities dealers to provide the name of the designated examining authority.
In regards to the individual registrant, the field for “Name” will be changed to “Firm’s Legal Name” and will also include a “doing business as” name that may differ from a firm’s legal name.
Other additional fields include “ABLE Program Underwriting” and “ABLE Program Sales” and if registrants select “Alternate Trading System” from the existing list of business activities, the new field “SEC Form ATS has been filed” will be displayed. Registrants will then check the box affirming the dealer is an SEC Form ATS filer.
