WASHINGTON -- The Municipal Securities Rulemaking Board's amendments to its political contributions rule have been given lightning-fast approval by the Securities and Exchange Commission, the MSRB said yesterday.

The amendments, which include one measure that protects firms that make good faith efforts to comply with the rule from being penalized for isolated violations by employees, were approved by the SEC on Monday, just 13 days after they were formally filed by the MSRB.

The SEC notified the rulemaking board of the approval yesterday, MSRB officials said. The amendments to the rule, G-37, were effective immediately.

Rule G-37, which took effect on April 25, bars municipal dealers from doing business with state and local government officials for two year after the dealers, its political action committee, or its bonds professionals contribute to an officeholder who could influence the awarding of bond business. The rule allows employees to give up to $250 to candidates running for office in the jurisdiction where they live.

The MSRB proposed the amendments after the Public Securities Association said that it feared that even if dealers took all reasonable steps to monitor their employees' contributions, unforeseen violations or mistakes could put the firms out the running for bond business.

When the MSRB filed its proposal with the SEC on May 24, the board said that the rule's prohibition on business "may be too harsh a consequence for truly inadvertent contributions or the contributions of disgruntled employees."

The amendments also make clear that contributions to an incumbent or candidate for governor are covered by the rule, if the governor has authority to appoint boards that award bond deals. The measures also make clear that the rule does not cover competitive deals or clerical staff and that it requires dealers to make quarterly reports or contributions by certified or registered mail.

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