Appendix
Summary of Selected MSRB Rules
Rule G-1—Requirements for Being Considered a Bank Dealer
In order to be considered a bank dealer by the MSRB, a municipal securities dealer must:
1. Be a separately identifiable department or division of a bank engaged in municipal securities activities
2. Be under the direct supervision of a bank officer responsible for its municipal securities activities
3. Maintain its own records that are distinct from the bank’s other records and readily accessible to independent examination and enforcement of MSRB rules.
Rule G-2—Municipal Broker-Dealers Must Meet MSRB Qualifications
No municipal securities broker-dealer may trade in or induce the trade of any municipal security unless that person and all associated persons of the broker-dealer are qualified in accordance with MSRB rules. Additionally, no municipal advisor shall engage in municipal advisory activities unless the advisor is similarly qualified.
Rule G-3—Qualification Rules for Associated Persons
This rule defines the categories of principal, Limited Principal, Sales Principal, Financial and Operations Principal, and representative. These personnel must pass their appropriate municipal securities qualification examinations to practice their trade. If they fail the examinations, they may retake them after 30 calendar days. If they fail more than twice, they must wait six months to take the exams again.
Principals and representatives must also participate in a continuing education program having two components: a regulatory element and a firm element. The regulatory element requires all registered persons to complete a computer-based training session within 120 calendar days of the person’s second registration anniversary and every three years thereafter. The firm element must be given annually to all registered personnel who have contact with the public. This annual training covers relevant compliance issues, such as rec