Section 158 ~- Municipal Securities 

(a) Registration of municipal securities dealers and municipal advisors 

(1) .(A} It shall be unlawful for any municipal securities dealer (other than one registered 

as a broker or dealer under section 15) to make use of the mails or any means or 

instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to 

induce the purchase or sale of, any municipal security unless such municipal securities dealer 

is registered in accordance with this subsection. 

(B) It shall be unlawful for a municipal advisor to provide advice to or on 

behalf of a municipal entitv or obligated person with respect to municipal financial 

products or the issuance of municipal securities, or to undertake a solicitation of a 

municipal entity or obligated person, unless the municipal advisor is registered in 

accordance with this subsection. 

(2) A municipal securities dealer or municipal advisor may be registered by filing with the 

Commission an application for registration in such form and containing such information and 

documents concerning such municipal securities dealer or municipal advisor and any persons 

associated with such municipal securities dealer or municipal advisor as the Commission, by rule, 

may prescribe as necessary or appropriate in the public interest or for the protection of investors. 

Within forty-five days of the date of the filing of such application (or within such longer period as to 

which the applicant consents), the Commission shall-

(A) by order grant registration, or 

(B) institute proceedings to determine whether registration should be denied. Such 

proceedings shall include notice of the grounds for denial under consideration and opportunity 

for hearing and shall be concluded within one hundred twenty days of the date of the filing of 

the application for registration. At the conclusion of such proceedings the Commission, by 

order, shall grant or deny such registration. The Commission may extend the time for the 

conclusion of such proceedings for up to ninety days if it finds good cause for such extension 

and publishes its reasons for so finding or for such longer period as to which the applicant 

consents. 

The Commission shall grant the registration of a municipal securities dealer or municipal advisor if 

the Commission finds that the requirements of this section are satisfied. The Commission shall deny 

such registration if it does not make such a finding or if it finds that if the applicant were so 

registered, its registration would be subject to suspension or revocation under subsection (c). 

(3) Any provision of this title (other than section 5 or paragraph (1) of this subsection) which 

prohibits any act, practice, or course of business if the mails or any means or instrumentality of 

interstate commerce is used in connection therewith shall also prohibit any such act, practice, or 

course of business by any registered municipal securities dealer or municipal advisor or any person 

acting on behalf of such municipal securities dealer or municipal advisor, irrespective of any use of 

the mails or any means or instrumentality of interstate commerce in connection therewith. 

(4) The Commission, by rule or order, upon its own motion or upon application, may 

conditionally or unconditionally exempt any broker, dealer, 6f municipal securities dealer, or 

municipal advisor, or class of brokers, dealers, 6f municipal securities dealers. or municipal 

advisors from any provision of this section or the rules or regulations thereunder, if the Commission 

finds that such exemption is consistent with the public interest, the protection of investors, and the 

purposes of this section. 
(5) No municipal advisor shall make use of the mails or any means or 

instrumentality of interstate commerce to provide advice to or on behalf of a municipal 

entity or obligated person with respect to municipal financial products, the issuance of 

municipal securities, or to undertake a solicitation of a municipal entity or obligated person, 

in connection with which such municipal advisor engages in any fraudulent, deceptive, or 

manipulative act or practice. 

(b) Municipal Securities Rulemaking Board; I'Uies and l'egulatians 

(1) The Municipal Securities Rulemaking Board shall be composed of 15 members, or 

such other number of members as specified by rules of the Board pursuant to paragraph 

(2)(B), Not later than one hundred twenty days after the date of enactment of the Securities Acts 

Amendments of 1975 [enacted June 4, 1975], the Commission shall establish a ~1unicipal Securities 

Rulemal<ing Board (hereinafter in this section referred to as the "Board"), to be composed initially of 

fifteen members appointed by the Commission, which shall perform the duties set forth in this section. 

The members of the Board shall serve as members for a term of 3 years or for such other 

terms as specified by rules of the Board pursuant to paragraph (2)(B), and shall consist of 

(A) 8 individuals who are independent of any municipal securities broker, municipal 

securities dealer, or municipal advisor, at least 1 of whom shall be representative of 

institutional or retail investors in municipal securities, at least 1 of whom shall be 

representative of municipal entities, and at least 1 of whom shall be a member of the public 

with knowledge of or experience in the municipal industry (which members are hereinafter 

referred to as 'public representatives'); and (B) 7 individuals who are associated with a 

broker, dealer, municipal securities dealer, or municipal advisor, including at least 1 

individual who is associated with and representative of brokers. dealers, or municipal · 

securities dealers that are not banks or subsidiaries or departments or divisions of banks 

(which members are hereinafter referred to as 'broker-dealer representatives'), at least 1 

individual who is associated with and representative of municipal securities dealers which 

are banks or subsidiaries or departments or divisions of banks (which members are 

hereinafter referred to as 'bank representatives'), and at least 1 individual who is 

associated with a municipal advisor (which members are hereinafter referred to as 'advisor 

representatives' and, together with the broker-dealer representatives and the bank 

representatives, are referred to as 'regulated representatives'). Each member of the board 

shall be knowledgeable of matters related to the municipal securities markets. The initial 

members of the Board shall serve as members for a term of two years, and shall consist of (A) five 

individuals 'Nho are not associated with any broker, dealer, or municipal securities dealer (other than 

by reason of being under common control with, or indirectly controlling, any broker or dealer which is 

not a municipal securities broker or municipal securities dealer), at least one of whom shall be 

representative of investors in municipal securities, and at least one of whom shall be representative of 

issuers of municipal securities (which members are hereinafter referred to as "public 

representatives"); (B) five individuals ·.vho are associated with and representative of municipal 

securities brokers and municipal securities dealers which are not banks or subsidiaries or departments 

or divisions of banks (vvhich members are hereinafter referred to as "broker dealer representatives"); 

and (C) five individuals 'Nho arc associated with and representative of municipal securities dealers 

'Nhich arc banks or subsidiaries or departments or divisions of banks (which members arc hereinafter 

referred to as "bank representatives"). Prior to the expiration of the terms of office of the~ 

members of the Board, an election shall be held under rules adopted by the Board (pursuant to 

subsection (b)(2)(B) of this section) of the members to succeed such initial members. 

(2) The Board shall propose and adopt rules to effect the purposes of this title with respect to 

transactions in municipal securities effected by brokers, dealers, and municipal securities dealers and 

advice provided to or on behalf of municipal entities or obligated persons by brokers, 

dealers, municipal securities dealers, and municipal advisors with respect to municipal 

financial products, the issuance of municipal securities, and solicitations of municipal 

entities or obligated persons undertaken by brokers, dealers, municipal securities dealers, 

and municipal advisors. (Such rules arc hereinafter collectively referred to in this title as "rules of 

the Board".) The rules of the Board, as a minimum, shall: 

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(A) provide that no .municipal securities broker or municipal securities dealer shall 

effect any transaction in, or induce or attempt to induce the purchase or sale of, any municipal 

security, and no broker, dealer, municipal securities dealer, or municipal advisor shall 

provide advice to or on behalf of a municipal entity or obligated person with respect 

to municipal financial products or the issuance of municipal securities, unless such 

municipal securities broker or municipal securities dealer meets such standards of operational 

capability and such municipal securities broker or municipal securities dealer and every natural 

person associated with such municipal securities broker or municipal securities dealer meet 

such standards of training, experience, competence, and such other qualifications as the Board 

finds necessary or appropriate in the public interest or for the protection of investors and 

municipal entities or obligated persons. In connection with the definition and application 

of such standards the Board may-

(i) appropriately classify municipal securities brokersL afl6 municipal securities 

dealers, and municipal advisors (taking into account relevant matters, including 

types of business done, nature of securities other than municipal securities sold, and 

character of business organization), and persons associated with municipal securities 

brokersL afl6 municipal securities dealers. and municipal advisors; 

(ii) specify that all or any portion of such standards shall be applicable to any 

such class; and 

(iii) require persons in any such class to pass tests administered in accordance 

with subsection (c) (7),.-:----aml 

(iv) provide that persons in any such class other than municipal securities 

brokers and municipal securities dealers and partners, officers, and supervisory 

employees of municipal securities brokers or municipal securities dealers, may be 

qualified solely on the basis of compliance with such standards of training and such 

other qualifications as the Board finds appropriate. 

(B) establish fair procedures for the nomination and election of members of 

the Board and assure fair representation in such nominations and elections of public 

representatives, broker dealer representatives, bank representatives, and advisor 

representatives. Such rules-

(i) shall provide that the number of public representatives of the 

Board shall at all times exceed the total number of regulated representatives 

and that the membership shall at all times be as evenly divided in number as 

possible between public representatives and regulated representatives; 

(iil shall specify the length or lengths of terms members shall serve; 

(iii) may increase the number of members which shall constitute the 

whole Board, provided that such number is an odd number; and 

(ivl shall establish requirements regarding the independence of public 

representatives. 

(B) establish fair procedures for the nomination and election of members of the Board 

and assure fair representation in such nominations and elections of municipal securities 

brokers and municipal securities dealers. Such rules shall provide that the membership of the 

Board shall at all times be equally divided among public representatives, broker dealer 

representatives, and bank representatives, and that the----f7UBiic representatives shall be subject 

to approval by the Commission to assure that no one of them is associated v.;ith any broker, 

dealer, or municipal securities dealer (other than by reason of being under common control 

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with, or indirectly controlling, any broker or dealer 'Nhich is not a municipal securities broker 

or municipal securities dealer) and that at least one is representative of investors in municipal 

securities and at least one is representative of issuers of municipal securities. Such rules shall 

also specify the term members shall serve and may increase the number of members •NITielt 

shall constitute the ·whole Board provided that such number is an odd number. 

(C) be designed to prevent fraudulent and manipulative acts and practices, to promote 

just and equitable principles of trade, to foster cooperation and coordination with persons 

engaged in regulating, clearing, settling, processing information with respect to, and 

facilitating transactions in municipal securities and municipal financial products, to remove 

impediments to and perfect the mechanism of a free and open market in municipal securities 

and municipal financial products, and, in general, to protect investors, municipal 

entities, obligated persons. and the public interest; and not be designed to permit unfair 

discrimination among Betweeft customers, municipal entities, obligated persons. issuers, 

municipal securities brokers,e-r municipal securities dealers, or municipal advisors, to fix 

minimum profits, to impose any schedule or fix rates of commissions, allowances, discounts, 

or other fees to be charged by municipal securities brokers£ e-r municipal securities dealers, or 

municipal advisors. to regulate by virtue of any authority conferred by this title matters not 

related to the purposes of this title or the administration of the Board, or to impose any 

burden on competition not necessary or appropriate in furtherance of the purposes of this title. 

(D) if the Board deems appropriate, provide for the arbitration of claims, disputes, and 

controversies relating to transactions in municipal securities and advice concerning 

municipal financial products: Provided, however, that =Rtat no person other than a 

municipal securities broker, municipal securities dealer, municipal advisor or person 

associated with such a municipal securities broker£ e-r municipal securities dealer, or 

municipal advisor may be compelled to submit to such arbitration except at his instance and 

in accordance with section 29. 

(E) provide for the periodic examination in accordance with subsection (c)(7) of 

municipal securities brokers£ ane municipal securities dealers. and municipal advisors to 

determine compliance with applicable provisions of this. title, the rules and regulations 

thereunder, and the rules of the Board. Such rules shall specify the minimum scope and 

frequency of such examinations and shall be designed to avoid unnecessary regulatory 

duplication or undue regulatory burdens for any such municipal securities broker£ e-r municipal 

.securities dealer, or municipal advisor. 

(F) include provisions governing the form and content of quotations relating to 

municipal securities which may be distributed or published by any municipal securities broker, 

municipal securities dealer, or person associated with such a municipal securities broker or 

municipal securities dealer, and thepersons to whom such quotations may be supplied. Such 

rules relating to quotations shall be designed to produce fair and informative quotations, to 

prevent fictitious or misleading quotations, and to promote orderly procedures for collecting, 

distributing, and publishing quotations. 

(G) prescribe records to be made and kept by municipal securities brokers£ ane 

municipal securities dealers, and municipal advisors and the periods for which such records 

shall be preserved. 

(H) define the term "separately identifiable department or division", as that term is 

used in section 3(a)(30), in accordance with specified and appropriate standards to assure 

that a bank is not deemed to be engaged in the business of buying and selling municipal 

securities through a separately identifiable department or division unless such department or 

division is organized and administered so as to permit independent examination and 

enforcement of applicable provis-ions of this title, the rules and regulations thereunder, and the 

rules of the Board. A separately identifiable department or division of a bank may be engaged 

in activities other than those relating to municipal securities. 

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(I) provide for the operation and administration of the Board, including the selection of 

a Chairman from among the members of the Board, the compensation of the members of the 

Board, and the appointment and compensation of such employees, attorneys, and consultants 

as may be necessary or appropriate to carry out the Board's functions under this section. 

(J) provide that each municipal securities brokerL and each municipal securities dealerL 

and municipal advisor shall pay to the Board such reasonable fees and charges as may be 

necessary or appropriate to defray the costs and expenses of operating and administering .the 

Board. Such rules shall specify the amount of such fees and charges. which may include 

charges for failure to submit to the Board, or to any information system operated by 

the Board. within the prescribed timeframes. any items of information or documents 

required to be submitted under any rule issued by the Board. 

(K) establish the terms and conditions under which any broker, dealer, or municipal 

securities dealer may sell, or prohibit any broker, dealer, or municipal securities dealer from 

selling, any part of a new issue of municipal securities to a related account of a broker. 

dealer, or municipal securities dealer municipal securities investment portfolio during the 

underwriting period. 

{L) with respect to municipal advisors-

{i) prescribe means reasonably designed to prevent acts. practices, 

and courses of business as are not consistent with a municipal advisor's 

fiduciary duty to its clients; 

(ii) provide continuing education requirements for municipal advisors; 

{iii) provide professional standards; and 

{iv) not impose a regulatory burden on small municipal advisors that 

is not necessary or appropriate in the public interest and for the protection of 

investors. municipal entities, and obligated persons, provided that there is 

robust protection of investors against fraud. 

{3) The Board, in conjunction with or on behalf of any Federal financial regulator or 

self-regulatory organization, may-

(A) establish information systems; and 

(B) assess such reasonable fees and charges for the submission of 

information to, or the receipt of information from, such systems from any persons 

which systems may be developed for the purposes of serving as a repository of 

information from municipal market participants or otherwise in furtherance of the 

purposes of the Board. a Federal financial regulator. or a self-regulatory 

organization, except that the Board-

(i) may not charge a fee to municipal entities or obligated persons to 

submit documents or other information to the Board or charge a fee to any 

person to obtain. directly from the Internet site of the Board, documents or 

information submitted by municipal entities. obligated persons. brokers, 

dealers, municipal securities dealers. or municipal advisors, including 

documents submitted under the rules of the Board or the Commission; and 

(ii) shall not be prohibited from charging commercially reasonable 

fees for automated subscription-based feeds or similar services. or for 

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charging for other data or document-based services customized upon request 

of any person. made available to commercial enterprises, municipal securities 

market professionals, or the general public, whether delivered through the 

Internet or any other means. that contain all or part of the documents or 

information. subiect to approval of the fees by the Commission under section 

19(b). 

(4) The Board may provide guidance and assistance in the enforcement of. and 

examination for, compliance with the rules of the Board to the Commission, a registered 

securities association under section 15A, or any other appropriate regulatory agency, as 

applicable. 

(5) The Board. the Commission, and a registered securities association under section 

15A. or the designees of the Board, the Commission, or such association, shall meet not less 

frequently than 2 times a year-

(A) to describe the work of the Board, the Commission, arid the registered 

securities association involving the regulation of municipal securities; and 

(B) to share information about-

(i) the interpretation of the Board. the Commission, and the registered 

securities association of Board rules; and 

(ii) examination and enforcement of compliance with Board rules. 

ill f-31 Nothing in this section shall be construed to impair or limit the power of the 

Commission under this title. 

(c) Discipline of brokers, dealers, municipal securities dealers and municipal advisors; 

fiduciary duty of municipal advisors eef!sure; suspeHsiefl er re..,·eeatiefl ef registratiefl; ather 

safletiafls; ifl'vestigatiefls 

(1) No broker, dealer, or municipal securities dealer shall make use of the mails or any means 

or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to 

induce the purchase or sale of, any municipal security, and no broker, dealer. municipal securities 

dealer. or municipal advisor shall make use of the mails or any means or instrumentality of 

interstate commerce to provide advice to or on behalf of a municipal entity or obligated 

person with respect to municipal financial products, the issuance of municipal securities, or 

to undertake a solicitation of a municipal entity or obligated person, in contravention of any 

rule of the Board. A municipal advisor and any person associated with such municipal advisor 

shall be deemed to have a fiduciary duty to any municipal entity for whom such municipal 

advisor acts as a municipal advisor, and no municipal advisor may engage in any act, 

practice, or course of business which is not consistent with a municipal advisor's fiduciary 

duty or that is in contravention of any rule of the Board. 

(2) The Commission, by order, shall censure, place limitations on the activities, functions, or 

operations, suspend for a period not exceeding twelve months, or revoke the registration of any 

municipal securities dealer or municipal advisor, if it finds, on the record after notice and 

opportunity for hearing, that such censure, placing of limitations, denial, suspension, or revocation, is 

in the public interest and that such municipal securities dealer or municipal advisor has committed 

or omitted any act, or is subject to an order or finding, enumerated in subparagraph (A), (D), (E), (H), 

or (G) of paragraph (4) of section 15(b), has been convicted of any offense specified in subparagraph 

(B) of such paragraph (4) within ten years of the commencement of the proceedings under this 

paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of such 

paragraph (4). 

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(3) Pending final determination whether any registration under this section shall be revoked, 

the Commission, by order, may suspend such registration, if such suspension appears to the 

Commission, after notice and opportunity for hearing, to be necessary or appropriate in the public 

interest or for the protection of investors or municipal entities or obligated persons. Any 

registered municipal securities dealer or municipal advisor may, upon such terms and conditions as 

the Commission may deem necessary in the public interest or for the protection of investors or 

municipal entities or obligated persons, withdraw from registration by filing a written notice of 

withdrawal with the Commission. If the Commission finds that any registered municipal securities 

dealer or municipal advisor is no longer in existence or has ceased to do business as a municipal 

securities dealer or municipal advisor, the Commission, by order, shall cancel the registration of 

such municipal securities dealer or municipal advisor. 

( 4) The Commission, by order, shall censure or place limitations on the activities or functions 

of any person associated, seeking to become associated, or, at the time of the alleged misconduct, 

associated or seeking to become associated with a municipal securities dealer or municipal advisor, 

or suspend for a period not exceeding twelve months or bar any such person from being associated 

with a municipal securities dealer 12 months or bar any such person from being associated with 

a broker. dealer, investment adviser. municipal securities dealer, municipal advisor, 

transfer agent. or nationally recognized statistical rating organization, if the Commission 

finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, 

suspension, or bar is in the public interest and that such person has committed any act, or is subject 

to an order or finding, enumerated in subparagraph (A), (D), (E), (H), or (G) of paragraph (4) of 

section 15(b), has been convicted of any offense specified in subparagraph (B) of such paragraph (4) 

within 10 years of the commencement of the proceedings under this paragraph, or is enjoined from 

any action, conduct, or practice specified in subparagraph (C) of such paragraph (4). It shall be 

unlawful for any person as to whom an order entered pursuant to this paragraph or paragraph (5) of 

this subsection suspending or barring him from being associated with a municipal securities dealer [or 

municipal advisor] is in effect willfully to become, or to be, associated with a municipal securities 

dealer [or municipal advisor] without the consent of the Commission, and it shall be unlawful for 

any municipal securities dealer [or municipal advisor] to permit such a person to become, or 

remain, a person associated with him without the consent of the Commission, if such municipal 

securities dealer [or municipal advisor] knew, or, in the exercise of reasonable care should have 

known, of such order. 

(5) With respect to any municipal securities dealer for which the Commission is not the 

appropriate regulatory agency, the appropriate regulatory agency for such municipal securities dealer 

may sanction any such municipal securities dealer in the manner and for the reasons specified in 

paragraph (2) of this subsection and any person associated with such municipal securities dealer in 

the manner and for the reasons specified in paragraph ( 4) of this subsection. In addition, such 

appropriate regulatory agency may, in accordance with section 1818 of Title 12, enforce compliance 

by such municipal securities dealer or any person associated with such municipal securities dealer with 

the provisions of this section, section 17, the rules of the Board, and the rules of the Commission 

pertaining to municipal securities dealers, persons associated with municipal securities dealers, and 

transactions in municipal securities. For purposes of the preceding sentence, any violation of any such 

provision shall constitute adequate basis for the issuance of any order under section 1818(b) or 

1818(c) of Title 12, and the customers of any such municipal securities dealer shall be deemed to be 

"depositors" as that term is used in section 1818(c) of Title 12. Nothing in this paragraph shall be 

construed to affect in any way the powers of such appropriate regulatory agency to proceed against 

such municipal securities dealer under any other provision of law. 

(6) (A) The Commission, prior to the entry of an order of investigation, or commencement 

of any proceedings, against any municipal securities dealer, or person associated with any 

municipal securities dealer, for which the Commission is not the appropriate regulatory 

agency, for violation of any provision of this section, section 15(c)(1) or l5(c)(2), any rule or 

regulation under any such section, or any rule of the Board, shall (i) give notice to the 

appropriate regulatory agency for such municipal securities dealer of the identity of such 

municipal securities dealer or person associated with such municipal securities dealer, the 

nature of and basis for such proposed action, and whether the Commission is seeking a 

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monetary penalty against such municipal securities dealer or such associated person pursuant 

to section 21B; and (ii) consult with such appropriate regulatory agency concerning the effect 

of such proposed action on sound banking practices and the feasibility and desirability of 

coordinating such action with any proceeding or proposed proceeding by such appropriate 

regulatory agency against such municipalsecurities dealer or associated person. 

(B) The appropriate regulatory agency for a municipal securities dealer (if other than 

the Commission), prior to the entry of an order of investigation, or commencement of any 

proceedings, against such municipal securities dealer or person associated with such municipal 

securities dealer, for violation of any provision of this section, the rules of the Board, or the 

rules or regulations of the Commission pertaining to municipal securities dealers, persons 

associated with municipal securities dealers, or transactions in municipal securities shall (i) 

give notice to the Commission of the identity of such municipal securities dealer or person 

associated with such municipal securities dealer and the nature of and basis for such proposed 

action and (ii) consult with the Commission concerning the effect of such proposed action on 

the protection of investors or municipal entities or obligated person and the feasibility 

and desirability of coordinating such action with any proceeding or proposed proceeding by the 

Commission against such municipal securities dealer or associated person. 

(C) Nothing in this paragraph shall be construed to impair or limit (other than by the 

requirement of prior consultation) the power of the Commission or the appropriate regulatory 

agency for a municipal securities dealer to initiate any action of a class described in this 

paragraph or to affect in any way the power of the Commission or such appropriate regulatory 

agency to initiate any other action pursuant to this title or any other provision of law. 

(7) (A) Tests required pursuant to subsection (b)(2)(A)(iii) shall be administered by or on 

behalf of and periodic examinations pursuant to subsection (b)(2)(E) shall be conducted by-

(i) a registered securities association, in the case of municipal securities 

brokers and municipal securities dealers who are members of such association; aft€!. 

(ii) the appropriate regulatory agency for any municipal securities broker or 

municipal securities dealer, in the case of all other municipal securities brokers and 

municipal securities dealers; and.,-

(iii) the Commission, or its designee, in the case of municipal advisors. 

(B) A registered securities association shall make a report of any examination 

conducted pursuant to subsection (b)(2)(E) of this section and promptly furnish the 

Commission a copy thereof and any data supplied to it in connection with such examination. 

Subject to such limitations as the Commission, by rule, determines to be necessary or 

appropriate in the public interest or for the protection of investors or municipal entities or 

obligated person, the Commission shall, on request, make available to the Board a copy of 

any report of an examination of a municipal securities broker or municipal securities dealer 

made by or furnished to the Commission pursuant to this paragraph or section 17( c)(3). 

(8) The Commission is authorized, by order, if in its opinion such action is necessary or 

appropriate in the public interest, for the protection of investors, or otherwise, in furtherance of the 

purposes of this title, to remove from office or censure any member or employee any person who is, 

or at the time of the alleged violation or abuse was, a member or employee of the Board, 

who, the Commission finds, on the record after notice and opportunity for hearing, has willfully (A) 

violated any provision of this title, the rules and regulations thereunder, or the rules of the Board or 

(B) abused his authority. 

(9) (A) Fines collected by the Commission for violations of the rules of the Board 

shall be equally divided between the Commission and the Board. 

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(B) Fines collected by a registered securities association under section 

15A(7l with respect to violations of the rules of the Board shall be accounted 

for by such registered securities association separately from other fines 

collected under section 15A(7l and shall be allocated between such 

registered securities association and the Board. and such allocation shall 

require the registered securities association to pay to the Board 1/3 of all 

fines collected by the registered securities association reasonably allocable to 

violations of the rules of the Board. or such other portion of such fines as may 

be directed by the Commission upon agreement between the registered 

securities association and the Board. 

(d) Issuance of municipal securities 

(1) Neither the Commission nor the Board Is authorized under this title, by rule or regulation, 

to require any issuer of municipal securities, directly or Indirectly through a purchaser or prospective 

purchaser of securities from the Issuer, to file with the Commission or the Board prior to the sale of 

such securities by the Issuer any application, report, or document In connection with the Issuance, 

sale, or distribution of such securities. 

(2) The Board Is not authorized under this title to require any issuer of municipal securities, 

directly or Indirectly through a municipal securities brokerL er municipal securities dealer. municipal 

advisor, or otherwise, to furnish to the Board or to a purchaser or a prospective purchaser of such 

securities any application, report, document, or information with respect to such issuer: Provided, 

however, That the Board may require municipal securities brokers and municipal securities dealers or 

municipal advisors to furnish to the Board or purchasers or prospective purchasers of municipal 

securities applications, reports, documents, and information with respect to the issuer thereof which Is 

generally available from a source other than such issuer. Nothing In this paragraph shall be construed 

to Impair or limit the power of the Commission under any provision of this title. 

(e) DEFINITIONS-for puroos1i!s of thjs sectjon-

(1) the term 'Board' means the Munjcipal Securities Rulemaking Board established 

yoder sybsection CblC1l: 

C2l the term 'guaranteed investment contract' jnc!ydes any investment that has 

specified wjthdrawal or reinvestment proyisjons and a specifically negotiated or bid interest 

rate. and also inc!ydes any agreement to sypply investments on 2 or more fytyre dates. 

sych as a forward sypply contract; 

(3l the term 'investment strategjes' inclydes plans or programs for the investment 

of the Proceeds of municipal secyrjtjes that are not municipal derjyatiyes. gyaranteed 

investment contracts. and the recommendation of and brokerage of mynjcipal escrow 

investments: 

(4) the term 'municipal advisor'-

CA) means a person Cwho is not a mynjcipal entity or an emPloyee of a 

mynjcipal entity) thatCD provides adyjce to or on behalf of a municipal entity or obligated 

person with respect to municipal financial prodycts or the jssyance of 

mynjcipal secyrjtjes. jnc!yding adyice wjth respect to the stryctyre. timing. 

terms. and other simjlar matters concerning sych financial prodycts or jssyes: 

w: 

Cii> undertakes a solicitation of a municipal entity; 

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CBl jnc!ydes financial adyjsors. gyaranteed investment contract brokers. 

third-party marketers. placement agents. so!jcitors. fjnders. and swap adyisors. jf 

sych persons are described jn any of c!ayses CD throygb WD of sybparagraph CA); 

ami 

CCl does not jnc!yde a broker. dealer. or mynjcipal secyrjtjes dealer serying 

as an underwriter Cas defined in sectjon 2CalC11l oUhe Secyrjtjes Act of 1933) US 

U.S.C. 77bCalC11U. any investment adyiser regjstered yoder the Investment 

Adyjsers Act of 1940. or persons associated with sych investment adyjsers who are 

proyjding investment adyice. any commodity trading adyjsor registered yoder the 

Commodjty Exchange Act or persons associated wjth a commodity tradjng adyjsor 

who are proyidjng adyice related to swaps. attorneys offering legal adyjce or 

proyidjng seryjces that are of a tradjtjonal legal natyre. or engjneers proyiding 

engjneerjng adyice; 

(5) the term 'mynjcjpal financial prodyct' means mynjcipal derjyatjyes. gyaranteed 

investment contracts. and investment strategies; 

(6) the term 'ryles of the Board' means the ryles proposed and adopted by the Board 

yoder sybsection CblC2l; 

CZ) the term 'person associated wjth a mynjcipal adyjsor' or 'associated person of an 

adyjsor' meansCA) any partner. officer. director. or branch manager of sych mynjcipal 

adyjsor Cor any person occypying a similar statys or performing sjmjlar fynctjonsl; 

CBl any other employee of sych mynjcipal adyjsor who js engaged jn the 

management. direction. syperyjsjon. or performance of any actjyjtjes relating to the 

provision of adyice to or on behalf of a mynjcipal entity or obligated person with 

respect to mynjcipal financial prodycts or the jssyance of mynjcipal securities; and 

CCl any person directly or jndjrect!y contromng. controlled by. or yoder 

common control wjth sych mynjcipal adyisor; 

C8) the term 'mynjcipal entjty' means any State. political sybdiyjsjon of a State. or 

mynjcipal corporate instrumentality of a State. jnc!ydingCA) any agency. aythorjty. or jnstrymentality of the State. poljtjcal 

sybdiyjsion. or mynjcipal corporate instrumentality; 

(B) any plan. mogram. or pool of assets sponsored or established by the 

State. political sybdjyjsion. or mynjcipal corporate instrymenta!jty or any agency. 

aythorjty. or jnstrymentaljty thereof; and 

CCl any other issuer of mynjcipal securities; 

C9) the term 'solicitation of a mynjcipal entitv or obligated person' means a djrect or 

indirect commynicatjon wjth a municipal entity or obljgated person made by a person. for 

direct or jndjrect compensation. on behalf of a broker. dealer. municipal securities dealer. 

municipal advisor. or investment adviser Cas defjned jn section 202 of the Investment 

Adyisers Act of 1940) that does not control. is not controlled by. or js not yoder common 

control with the person undertaking sych solicitation for the pymose of obtajnjng or 

retaining an engagement by a mynjcipal entity or obligated person of a broker. dealer. 

municipal secyrjties dealer. or municipal advisor for or in connection wjth mynicipal 

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financial products. the jssuance of municipal securities. or of an jnyestment adviser to 

provide jmiestment adyjsory seryices to or on behalf of a mynjcipal entjty; and 

(10) the term 'obligated person' means any oerson. jnclydjng an jssyer of municipal 

securities. who js either generally or throygh an enterorjse. fynd. or accoynt of sycb 

person. committed by contract or other arrangement to sypport the payment of all or part 

of the obljgatjons on the municipal securities to be sold in an offerjng of municipal 

seCyrjties. 

RELATED FINRA STATUTORY CHANGE 

Section 15A(b) is amended with respect to FINRA to add the following language: 

(15) The rules of the association provide that the association shallCAl request guidance from the Municipal Securities Rulemakinq Board in 

interpretation of the rules of the Municipal Securities Rulemakinq Board; and 

(B) provide information to the Municipal Securities Rulemaking Board about 

the enforcement actions and examinations of the association under section 

15B(b)(2)(E), so that the Municipal Securities Rulemaking Board mayCil assist in such enforcement actions and examinations; and 

(ii) evaluate the ongoing effectiveness of the rules of the Board. 

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