Pursuant to a Securities and Exchange Commission order, the Financial Industry Regulatory Authority (FINRA) established an accounting support fee to fund the annual budget of the Governmental Accounting Standards Board (GASB). Each quarter, FINRA collects a quarter of the annual GASB accounting support fee from its member firms. Each member firm’s assessment is based on

On August 16, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 19-28 (Notice) reminding member firms of their supervisory obligations under FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control System) if they 1) hold or transact in customer accounts owned by municipal entities or obligated persons (i.e., municipal clients), as defined in Section 15B of the Securities Exchange Act of 1934, as amended; and 2) participate in investment-related activities with municipal clients (e.g., recommending or selling non-municipal securities products to such municipal clients).
Continue Reading FINRA Issues Guidance on Member Firms’ Supervisory Obligations When Participating in Investment-Related Activities With Municipal Clients

On April 17, the Financial Industry Regulatory Authority issued Regulatory Notice 18-12, which announces that FINRA will collect a total of $8,346,300 to fund the annual budget of the Governmental Accounting Standards Board (GASB) by collecting $2,086,575 from member firms each calendar quarter beginning in April 2018.
Continue Reading FINRA Publishes Regulatory Notice Regarding 2018 GASB Accounting Support Fee

The Financial Industry Regulatory Authority announced that it will collect a total of $8,309,000 in 2017 from its member firms as part of the Government Accounting Standards Board (GASB) Accounting Support Fee. FINRA will collect $2,077,250 each calendar quarter beginning in April 2017 from its member firms that report trades to the Municipal Securities Rulemaking Board (MSRB). Each member firm’s fee assessment is based on that firm’s portion of the total par value of municipal securities transactions reported by all FINRA member firms to the MSRB in the previous quarter.
Continue Reading FINRA Issues Regulatory Notice on GASB Accounting Support Fee

The Securities and Exchange Commission recently proposed amendments to Rule 15c2-12 under the Securities Exchange Act of 1934. Rule 15c2-12 prohibits dealers acting as an underwriter for a primary offering of municipal securities from purchasing or selling those securities after the occurrence of certain events.

To comply with the rule, underwriters typically provide event notices

The Securities and Exchange Commission has approved the Municipal Securities Rulemaking Board’s (MSRB’s) revisions to its customer complaint and related recordkeeping rules. The MSRB has modernized the rules and extended their application to municipal advisors as follows:

  • The MSRB extended its customer complaint recordkeeping requirements to all municipal advisors, including non-solicitor and solicitor municipal advisors.

The Securities and Exchange Commission’s Rule 206(4)-5 (Pay-to-Play Rule) under the Investment Advisers Act of 1940, as amended, prohibits, among other restrictions, an investment adviser subject to the rule, and its covered associates, from providing or agreeing to provide, directly or indirectly, payment to any third party for a solicitation of advisory business from any government entity on behalf of such adviser, unless such third party is a “regulated person.” A regulated person is defined as (1) an SEC-registered investment adviser, (2) a registered broker or dealer subject to pay-to-play rules adopted by a registered national securities association such as the Financial Industry Regulatory Authority, or (3) a registered municipal advisor that is subject to pay-to-play rules adopted by the Municipal Securities Rulemaking Board (MSRB). In addition, the SECmust by order find that the national securities association and/or MSRB pay-to-play rules: (1) impose substantially equivalent or more stringent restrictions on broker-dealers or municipal advisors respectively than the Pay-to-Play Rule imposes on investment advisers; and (2) are consistent with the objectives of the Pay-to-Play Rule.
Continue Reading Effective Date of Investment Adviser Pay-to-Play Rule Ban on Third-Party Solicitation