WASHINGTON -- The MSRB will withdraw a proposal to exempt retail salespersons from its political contributions rule and will Consider proposing additional record-keeping and disclosure requirements on dealers' use of consultants to solicit bond business.

The Municipal Securities Rulemaking Board's plans were announced by Robert Drysdale, the board's chairman, and Christopher Taylor, its executive director, at a press briefing for reporters on Friday that capped the board's two-day meeting here.

Drysdale said the board will withdraw the proposed amendment to its political contributions rule next week because of the "perception that we might be creating a loophole."

Instead of revising and resubmitting the proposed amendment, he and Taylor said, the board will issue informal guidance further defining the term "municipal finance professionals" to clarify when retail salespersons are subject to the rule's restrictions. The guidance will take the form of a series of questions and answers about the role that will be released around Thanksgiving, Taylor said.

The MSRB's Rule G-37, which is aimed at halting pay-to-play practices, .generally bars dealers who make contributions to issuer clients from doing business with those clients for two years afterward., The rule applies to "municipal finance professionals" who are "primarily engaged" in municipal securities activities.

The board in August had proposed the amendment exempting retail salespersons after the Public Securities Association said it would be difficult to determine when they were subject to the rule.

The amendment has been pending at the Securities and Exchange Commission, but the SEC staff and some firms have opposed it, warning it would create a major loophole for firms with large retail sales staffs. Drysdale and Taylor told reporters yesterday they did not believe the amendment would have created a loophole because Rule G-37 applies to anyone who solicits bond business.

Drysdale said the board might propose additional record-keeping and disclosure requirements for dealers who use consultants to solicit bond business, because the board has been "hearing" about some abuses and is "very concerned that these people aren't the loophole to get out of [Rule] G-37."

The rule already says that dealers who hire consultants to seek municipal business must disclose the consultants' names and any business obtained through those consultants.

But the board thinks further requirements may be needed, said Drysdale, declining to say what they might be.

The board will take up this issue at its next board meeting in February in Palm Springs, Calif. Any requirements proposed could take the form of amendments to Rule G-37, or a new proposed rule that would be submitted to the SEC for approval, Taylor said.

In another matter, Drysdale said the board approved a "transition schedule" that will help dealers reduce from five to three days the time it takes to clear and settle municipal bond transactions. Most markets are expected to go to a T-plus-3 clearance and settlement regime in June 1995.

The transition schedule, which calls for two days at T-plus-5, then two days at T-plus-4, then one day at T-plus-3, is aimed at easing the transition during the first week of Jane and must be filed with the SEC, he said.

Drysdale also said that the board agreed to send letters next week inviting dealer representatives to attend a Dec. 5 meeting in New York City to talk about the need to improve the accuracy of wade information that is submitted to clearing organizations in preparation for T-plus-3.

Taylor said the board approved a $15,000 annual fee for bond information services, news organizations, or anyone else who wants to subscribe to, and obtain bond prices and other information from, the board's new transaction reporting pilot program.

The fees will used to pay for the program, which is expected to begin in January, and will cost about $1 million for development and about $500,000 per year for operational activities, he said. The board is hoping for at least 20 subscribers to stan, he said. The fee has to be filed with the SEC but is immediately effective when filed, he said.

The board also approved an amendment to Rule G-3 to establish a formal, two-part continuing education program for securities industry professionals beginning in July 1995. The rule must be approved by the SEC before it becomes effective.

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