WASHINGTON -- Comments must be filed by late September on the Municipal Securities Rulemaking Board' s proposed amendments to both its "pay to play" rule and its role on dealer fees paid to the board, the SEC said this week.
The deadlines were announced as the Securities and Exchange Commission published the MSRB's proposed amendments to its Rule G-37 and Rule A-13. The comments on Rule G-37 are due Sept. 21; those on Rule A-13 are due Sept. 22.
The proposed revisions to the board's Rule G-37, which governs political contributions, would exempt securities firms' retail staffs from the role and narrow the number of supervisors of municipal finance professionals that the rule covers, according to the SEC.
In a move aimed at heading off possible attempts to get around G37, the board proposed expanding the kinds of records that firms must keep and report to the MSRB about employee contributions to political parties.
Rule G-37 bars municipal dealers that make contributions to issuer clients from doing business for two years with those governments. The rule applies not only to municipal securities professionals, but those general registered representatives of firms who are primarily engaged in municipal securities activities.
Rule A-13 requires dealers to pay the MSRB fees, which help fund some of the board's operations, based upon the par value of their participation in primary offerings.
Currently, the MSRB charges underwriters a fee of three cents per $1,000 par value for offerings that are two years or more in maturity. If the longest maturity in an offering is more than nine months but less than two years, the assessment is one cent per $1.000 par value of the issue. Shortterm issues-under nine months in maturity, offerings under $1 million, and limited placements are exempt from the fee.
The proposed amendment to the rule would "make clear" that the so-called A-13 fees levied by underwriters "are to be paid by dealers and not issuers," the MSRB said in its draft rule sent to the SEC two weeks ago. Dealers should think of the fees as "overhead" expenses of doing municipal securities, an MSRB panel said.
