MSRB files proposed rule change with SEC that ups gift dollar limit

The Municipal Securities Rulemaking Board said Friday it has filed a proposed rule change with the Securities and Exchange Commission that is designed to harmonize the MSRB's gift rule requirements with the Financial Industry Regulatory Authority's amended gift rule.

The proposed rule change to MSRB Rule G-20 would increase the gift and non-cash compensation dollar limit to $300 from $100 per person per year, updating the rule originally adopted in the late 1970s, the MSRB said in a May 1 press release.

In addition, the MSRB's proposed rule change addresses how gifts that are incidental to normal business dealings should be treated; revises valuation and aggregation requirements; and sets forth additional supervision and recordkeeping requirements. It also clarifies that the rule doesn't apply to "gifts from a regulated entity to its own associated persons or to individual retail customers," according to a May 1 MSRB notice.

"An important part of MSRB's commitment to regulatory modernization is to ensure our rules are consistent with other regulatory frameworks and eliminate unnecessary compliance burdens where possible," Ernesto Lanza, the MSRB's chief regulatory and policy officer, said in the press release.

By harmonizing its gift rule with FINRA's amended gift rule, the MSRB "aims for consistency in the application of MSRB and FINRA rules among dealers that are FINRA members," Lanza said.

The MSRB's rule change was filed for immediate effectiveness with an operative date of June 1 for dealers that are FINRA members, the MSRB's notice said. However, a separate Dec. 1 compliance date applies for all municipal advisors as well as dealers that aren't FINRA members. FINRA does not regulate banks.

Until Dec. 1, municipal advisors and bank dealers are subject to Rule G-20's existing provisions, the notice said.