WASHINGTON - The Municipal Securities Rulemaking Board is expected to debate this week whether to add a provision to its political contributions rule that could shield firms if there has been an inadvertent violation by an employee, sources said.

The board may discuss whether to add such a safe-harbor provision to its Rule G-37, which took effect April 25, at its quarterly three-day meeting in Sea Island, Ga.

Rule G-37 bars municipal dealers from doing business with state and local governments for two years after the dealer, its political action committee, or its bond professionals contribute to an officeholder who could influence the awarding of bond business.

Dealers are concerned that even if they take all reasonable steps to put procedures in place to prevent employees from violating the rule, unforeseen lapses could arise. They are hoping that the MSRB will add language to Rule G-37 that would excuse firms from the ban in such a case.

The idea of a safe harbor was raised first by SEC Commissioner Mary Schapiro at the commission's meeting April 6 when it voted unanimously to adopt the rule.

Schapiro said the SEC staff should "discuss with the MSRB whether it would be possible to provide some comfort to firms who have taken all reasonable measures to try to prevent and detect violations." She said that, so far, the MSRB has rejected the idea of a "safe harbor."

Robert Colby, deputy director of the agency's market regulation division, called such a provision "possible," and said he would talk to the board about adopting it for the rule.

MSRB Chairman David C. Clapp was unavailable for comment yesterday.

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