WASHINGTON -- The Municipal Securities Rulemaking Board yesterday unveiled a draft proposal that would require ongoing training programs to keep representatives of brokers up to date on municipal market regulations and procedures.

The MSRB wants industry comments by Oct. 15 on a draft amendment to Rule G-3, which covers continuing education in the bond industry. The board plans to adopt the final version of the amendment by November and expects approval by the Securities and Exchange Commission in January, the board said in the August issue of MSRB Reports.

Under the draft amendment, a municipal representative's knowledge of federal rules on sales practices and other key standards would be informally tested using an interactive computer program. Representatives would be required to participate in the computer-based training sessions in the second, fifth, and 10 years after they begin selling bonds. The board is proposing that this part of the amendment be implemented on July 1, 1995.

The other major element of the draft amendment would require each securities firm to develop a training program to teach its employees about its products and services. A typical program should, for example, explain the investment features and risk factors of products offered by the firm, as well as "their suitability in various investment situations and the applicable regulatory requirements that affect the products," the MSRB publication said.

The board is proposing that firms be required to come up with a written plan for their training programs by July 1, 1995, and begin their programs no later than Jan. 1, 1996.

The proposal grew out of an effort that began in March 1993 by the board, the National Association of Securities Dealers, and four other self-regulatory organizations to determine whether the securities industry needed a uniform continuing education program for brokers.

An industry task force Set up by the organizations recommended the two-part plan for continuing education that is now being proposed by the MSRB.

The self-regulatory organizations began their effort on continuing education because "there have been so many new products anti new things going on in the securities industry that it was recognized there was a need to keep people up to date on everything, not only new products, but the regulations associated with new products," said Christopher Taylor, the executive director of the MSRB.

"It was the SR0s' view that something had to be done," Taylor said.

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