MSRB seeks comment on draft amendments to dealer supervision rule

The Municipal Securities Rulemaking Board on Wednesday published a request for comment on draft amendments to MSRB Rule G-27 as part of the MSRB's ongoing retrospective rule review of municipal securities dealers' supervisory obligations.

The comment request marks the first step in the MSRB's review of supervisory obligations in response to the "evolution of business practices" that has occurred since the rule was last substantially reviewed and revised, the MSRB said in a press release.

The MSRB in addition plans to engage in a series of industry outreach initiatives this year as part of its ongoing efforts "to address dealer requests for greater flexibility and modernization of the supervisory framework," the release said. The MSRB also remains committed to working with its fellow regulators "to ensure regulatory consistency across fixed-income markets," it said.

"We recognize that technological advancements have evolved market practices and workplaces with respect to remote supervision," MSRB Board Chair Natasha Holiday said in the release. "The market is better served when there is a clear understanding of how to interpret the rules of the road and when the regulatory framework reflects current market practices."

The Rule G-27 draft amendments aim to add clarity to the term "structuring of public offerings or private placements" within the rule's definition of "office of municipal supervisory jurisdiction," and to increase the 30-business-day-per-year exclusion from the municipal branch office registration for locations other than a primary residence, according to the release.

The draft amendments, according to the RFC, " would extend the exclusion from less than 30 business days per calendar year to 60 business days or fewer per calendar year that associated persons would be able to work at locations, other than their primary residence, without subjecting such locations to the municipal branch office registration."

In addition to the proposed amendments, the MSRB's request for comment seeks input more broadly regarding what additional areas of Rule G-27 should be included in the MSRB's retrospective rule review.

The proposed amendments wouldn't change dealers' existing regulatory obligations to set up and maintain "reasonably designed supervisory systems, as well as compliance policies and procedures that are effectively implemented, updated, and enforced," the MSRB's release said.

Responses to the request for comment are due by March 16, the release said.