Enforcement of MSRB Rules

Broker-dealers. While the MSRB drafts rules and regulations governing the behavior of municipal broker-dealers and municipal advisors, it does not have the authority to enforce these rules. MSRB rules for broker-dealers are generally enforced by the SEC and FINRA.

Bank dealers. Bank dealers have a different set of regulators. The Comptroller of the Currency enforces MSRB rules for national banks and their subsidiaries, departments, or divisions. The Federal Deposit Insurance Corporation (FDIC) enforces MSRB rules for state and local banks that are not part of the Federal Reserve System. The Federal Reserve Board enforces rules applying to state and local banks that are part of the Federal Reserve System.

Other municipal securities dealers. The SEC is the enforcement agency for all other municipal securities dealers.

The SEC and the other governing regulatory agencies may censure or suspend any municipal securities dealers or municipal advisors for a period up to 12 months or revoke their registration for engaging in prohibited conduct if the regulators determine it is in the public interest.

The MSRB defines “appropriate regulatory agency” for municipal securities dealers by using the SEC explanations set forth above. The appropriate regulatory agency for municipal advisors is the SEC.

MSRB Rule D-14

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