MSRB Seeks to Extend Pay-to-Play Rule to Municipal Advisors

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The Municipal Securities Rulemaking Board, or MSRB, is requesting comment on draft amendments to Rule G-37, the MSRB’s pay-to-play rule for municipal securities dealers, that would extend the rule to municipal advisors.

According to the  MSRB, the draft amendments seek to curb pay-to-play activities by municipal advisors and provide greater transparency regarding their political contributions. The draft amendments would, consistent with the existing rule for dealers, generally prohibit municipal advisors from engaging in municipal advisory business with municipal entities for two years if certain political contributions have been made to officials of those entities who can influence the award of business.

Municipal advisors would be required, like dealers under the existing rule, to disclose their political contributions to officials and bond ballot campaigns for posting on the MSRB’s Electronic Municipal Market Access (EMMA®) website.   The MSRB believes public availability of this information would facilitate enforcement of the rule and promote public scrutiny of political giving and municipal advisory business.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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