WASHINGTON -- The National Association of Securities Dealers may need additional inspectors to enforce the Municipal Securities Rulemaking Board's new pay-to-play rule, the association's enforcement chief said yesterday.
"I think in certain parts of the country where there is a significant amount of municipal business, we may have to do something on the staff to be able to encompass the [workload] for Rule G-37," John Pinto, executive vice president of regulation, said at a press briefing at NASD headquarters.
Pinto was referring to the new MSRB rule that took effect April 25 and bars dealers that make contributions to issuer clients from doing business for two years with those governments.
The NASD is the self-regulatory organization that conducts inspections of municipal broker-dealers to ensure that they are complying with MSRB rules.
"We are looking to ensure that the staff we have is adequate," Pinto said, noting that the association may have to add inspectors in those NASD offices that oversee regions of the United States with heavier municipal business.
"We'll probably look at New Orleans, which covers a good chunk of the municipal business. Whenever you look at anything you have to look at New York. We'll probably look at Kansas City," he said.
"We're looking at all the district offices. But if you ask me what parts of the country I think we need to tweak the most I think those would be the ones," he said.
Pinto stressed, however, that the NASD may not have to expand its inspection staff. "We might look and decide we have adequate resources," he said.
