Document ID: SEC-2017-0830-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Municipal Securities Rulemaking Board
Posted Date: 2017-05-22T04:00Z

[Federal Register Volume 82, Number 97 (Monday, May 22, 2017)]
[Notices]
[Pages 23394-23398]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10303]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80699; File No. SR-MSRB-2017-02]

Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Granting Approval of a Proposed Rule Change Consisting of 
Proposed Amendments to Rule G-3, on Professional Qualification 
Requirements, and Rule G-8, on Books and Records, To Establish 
Continuing Education Requirements for Municipal Advisors and 
Accompanying Recordkeeping Requirements

May 16, 2017.

I. Introduction

    On March 22, 2017, the Municipal Securities Rulemaking Board (the 
``MSRB'' or ``Board'') filed with the Securities and Exchange 
Commission (the ``SEC'' or ``Commission''), pursuant to Section 
19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 
19b-4 thereunder,\2\ a proposed rule change consisting of (i) proposed 
amendments to MSRB Rule G-3, on professional qualification 
requirements, to establish continuing education requirements for 
municipal advisors; (ii) proposed amendments to MSRB Rule G-8, on books 
and records to be made by brokers, dealers and municipal securities 
dealers (``dealers'') and municipal advisors; and (iii) proposed 
amendments to Rule G-3 to make minor technical changes to the rule to 
reflect the renumbering of sections and updates to cross-referenced 
provisions (collectively the ``proposed rule change''). The proposed 
rule change was published for comment in the Federal Register on April 
4, 2017.\3\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 80327 (March 29, 2017) 
(the ``Notice of Filing''), 82 FR 16449 (April 4, 2017).
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    The Commission received one comment letter on the proposed rule 
change.\4\ On May 10, 2017, the MSRB responded to the comments received 
by the Commission.\5\
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    \4\ See Letter to Secretary, Commission, from Susan Gaffney, 
Executive Director, National Association of Municipal Advisors, 
dated April 25, 2017 (the ``NAMA Letter'').
    \5\ See Letter to Secretary, Commission, from Gail Marshall, 
Associate General Counsel, MSRB, dated May 10, 2017 (the ``MSRB 
Response Letter''), available at https://www.sec.gov/comments/sr-msrb-2017-02/msrb201702-1745890-151491.pdf.>
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II. Description of Proposed Rule Change

    According to the MSRB, the purpose of the proposed rule change is 
to amend Rule G-3(i) to prescribe continuing education requirements for 
municipal advisors pursuant to the MSRB's statutory mandate under 
Section 15B(b) of the Act. As described in the Notice Filing, the goal 
of continuing educations is to ensure that certain associated persons 
of municipal advisors stay abreast of issues that may affect their job 
responsibilities and of product and regulatory developments.\6\ The 
proposed rule change also would amend Rule G-8 to establish 
recordkeeping requirements related to the administration of a municipal 
advisor's continuing education program and make technical changes to 
Rule G-3 to reflect the renumbering of sections and updates to cross-
referenced provisions.
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    \6\ See Notice of Filing.
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    As further described in the Notice of Filing and the MSRB Response, 
the development of the proposed rule change drew from the principles 
and structure of the continuing education regulatory framework 
currently in place for dealers.\7\
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    \7\ Id.
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    Pursuant to the proposed rule change, a municipal advisor would be 
required to, at least annually, conduct a needs analysis that evaluates 
and prioritizes their specific training needs, develop a written 
training plan based on the needs identified in the analysis, and 
deliver training concerning municipal advisory activities designed to 
meet those training needs. However, the proposed requirements for 
municipal advisors would differ from dealers with respect to 
identifying those individuals that are subject to the training and the 
content that must be covered as part of the minimum standards for the 
annual training.
    Pursuant to proposed Rule G-3(i)(ii), a municipal advisor would be 
required to implement a continuing education training program for each 
individual qualified as either a municipal advisor representative or as 
a municipal advisor principal (collectively, ``covered persons'').\8\ 
The MSRB states that the

[[Page 23395]]

establishment of continuing education requirements for municipal 
advisors would assist in ensuring that all municipal advisor firms 
provide a minimum-level standard of training that is appropriate in the 
public interest and for the protection of investors and municipal 
entities or obligated persons.\9\
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    \8\ Under MSRB Rule G-3(d)(i)(A), ``municipal advisor 
representative'' means ``a natural person associated with a 
municipal advisor who engages in municipal advisory activities on 
the municipal advisor's behalf.'' Under MSRB Rule G-3(e)(i), 
``municipal advisor principal'' means ``a natural person associated 
with a municipal advisor who is qualified as a municipal advisor 
representative and is directly engaged in the management, direction 
or supervision of the municipal advisory activities of the municipal 
advisor and its associated persons.''
    \9\ See Notice of Filing.
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    Pursuant to proposed Rule G-3(i)(ii)(B)(1), a municipal advisor 
would be required to, at least annually, conduct a needs analysis that 
evaluates and prioritizes its training needs, develop a written 
training plan based on the needs analysis, and deliver training 
applicable to its municipal advisory activities. Additionally, pursuant 
to the proposed rule change, in developing a written training plan, a 
municipal advisor must take into consideration the firm's size, 
organizational structure, scope of municipal advisory activities, as 
well as regulatory developments.
    Proposed Rule G-3(i)(ii)(B)(2) would prescribe the minimum 
standards for continuing education training by requiring that each 
municipal advisor's training include, at a minimum, training on the 
applicable regulatory requirements and the fiduciary duty obligations 
owed to municipal entity clients. Pursuant to the proposed rule change, 
the minimum training on the applicable regulatory requirements would 
require a municipal advisor's continuing education program to include 
training on the regulatory requirements applicable to the municipal 
advisory activities in which its covered persons engage. However, 
training on the fiduciary duty obligation owed to municipal entity 
clients would be a minimum component of the continuing education 
training for all covered persons, even those that may not engage in 
municipal advisory activities on behalf of a municipal entity client. 
The MSRB states that the fiduciary duty obligation owed to a municipal 
entity client is a keystone principle of the regulatory framework for 
municipal advisors and that the MSRB believes every covered person 
engaged in municipal advisory activities should be familiar with such 
principle.\10\ A municipal advisor would, under the proposed rule 
change, nonetheless, still have the flexibility to determine the 
appropriate scope of training that its covered persons need on the 
fiduciary duty obligation based on the municipal advisory activities in 
which that its covered persons engages.
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    \10\ Id.
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    Recognizing that the nature of municipal advisory activities 
engaged in by municipal advisors can be diverse; the proposed rule 
change would provide municipal advisors with the flexibility to 
determine their firm-specific training needs and the content and scope 
of the training appropriate for their covered persons. For example, a 
municipal advisor that only provides advice to municipal entities on 
swap transactions would, under the proposed rule change, be permitted 
to design its annual training plan based upon the rules and practices 
applicable to its limited business model, so long as such training plan 
included the applicable regulatory requirements applicable to that 
limited business and a component regarding the fiduciary duty 
obligation owed to municipal entity clients. Moreover, under the 
proposed rule change, municipal advisors would be able to determine the 
method for delivering such training. For example, a municipal advisor 
could determine that the most effective manner for delivering the 
training would be to require its covered persons to attend an 
applicable seminar by subject matter experts and/or to utilize an on-
line training resource.
    The MSRB notes that the minimum requirements for continuing 
education training, outlined under the proposed rule change, should not 
be viewed by municipal advisors as the full scope of the subject matter 
appropriate for municipal advisors' training programs.\11\ The minimum 
standard for training does not negate the need for each municipal 
advisor to consider whether, based on its needs analysis, additional 
training applicable to the municipal advisory activities it conducts is 
appropriate.
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    \11\ Id.
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    Proposed Rule G-3(i)(ii)(B)(3) would require a municipal advisor to 
administer its continuing education program in accordance with the 
annual evaluation and prioritization of its training needs and the 
written training plan developed as consistent with its needs analysis. 
Also, pursuant to this provision, a municipal advisor would be required 
to maintain records documenting the content of its training programs 
and a record that each of its covered persons identified completed the 
applicable training.
    Pursuant to proposed Rule G-3(i)(ii)(C), a municipal advisor's 
covered persons (each individual qualified as a municipal advisor 
representative or municipal advisor principal) would be required to 
participate in the firm's continuing education training programs. If 
consistent with its training plan, a municipal advisor could deliver 
training appropriate for all covered persons. In addition, a municipal 
advisor could determine that its training needs indicate that it should 
also deliver particular training for certain covered persons, for 
example, those covered persons that have been designated with 
supervisory responsibilities under MSRB Rule G-44, or those covered 
persons that have been engaged in municipal advisory activities for a 
short period of time.
    Pursuant to proposed Rule G-3(i)(ii)(D), on specific training 
requirements, the appropriate examining authority could require a 
municipal advisor, individually or as part of a larger group, to 
provide specific training to its covered persons in such areas the 
appropriate examining authority deems appropriate.\12\ Such a 
requirement could stipulate the class of covered persons for which it 
is applicable, the time period in which the requirement must be 
satisfied and, where appropriate, the actual training content.
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    \12\ For purposes of proposed Rule G-3(i)(ii)(D), ``appropriate 
examining authority'' would mean ``a registered securities 
association with respect to a municipal advisor that is a member of 
such association, or the Commission, or the Commission's designee, 
with respect to any other municipal advisor.''
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    The MSRB states that, in an effort to reduce regulatory overlap for 
dealer-municipal advisors,\13\ the proposed rule change would allow a 
dealer-municipal advisor to deliver continuing education training that 
would satisfy its training needs for the firm's dealer and municipal 
advisor activities.\14\ More specifically, pursuant to proposed Rule G-
3(i)(ii)(E), each dealer-municipal advisor will be permitted to develop 
a single written training plan, if that training plan is consistent 
with each needs analysis that was conducted of the firm's municipal 
advisory activities and municipal securities activities. In addition, 
the proposed rule provision would allow a municipal advisor to conduct 
training for its covered persons and covered registered persons, which 
would satisfy the continuing education requirements under Rules G-
3(i)(i)(B) and G-3(i)(ii), if such training is consistent with the 
firm's written training plan(s) and that training meets the minimum 
standards for the training programs, as required under the rule.
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    \13\ A member of the Financial Industry Regulatory Authority 
that is a municipal securities dealer and municipal advisor is 
commonly referred to as a ``dealer-municipal advisor.''
    \14\ See Notice of Filing.

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[[Page 23396]]

Proposed Amendments to MSRB Rule G-8

    The proposed amendments to MSRB Rule G-8 address the books and 
records that must be made and maintained by a municipal advisor to show 
compliance with recordkeeping requirements related to the 
administration of a municipal advisor's continuing education program. 
The Board adopted the approach of specifying, in some detail, the 
information to be reflected in various records.\15\ Specifically, the 
proposed amendments to Rule G-8(h) would require each municipal advisor 
to make and maintain records regarding the firm's completion of its 
needs analysis and the development of its corresponding written 
training plan. Moreover, with respect to each municipal advisor's 
written training plan, municipal advisors would be required to make and 
keep records documenting the content of the firm's training programs 
and a record evidencing completion of the training programs by each 
covered person.\16\ The MSRB believes that recordkeeping requirements 
are an important element of compliance and the proposed amendments to 
Rule G-8 are appropriately tailored to facilitate the examination of a 
municipal advisor's compliance with the continuing education 
requirements.\17\
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    \15\ Id.
    \16\ MSRB Rule G-9(h) generally requires municipal advisors to 
preserve the books and records described in MSRB Rule G-8(h) for a 
period of not less than five years for purposes of consistency with 
SEC Rule 15Ba1-8 of the Act on books and records to be made and 
maintained by municipal advisors. See Exchange Act Release No. 73415 
(October 23, 2014), 79 FR 64423 (October 29, 2014) (SR-MSRB-2014-
06).
    \17\ Id.
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Technical Amendments

    The proposed rule change would make minor technical amendments to 
add paragraph headers, and renumber and update rule cross-references to 
Rule G-3(i)(i) and Rule G-3(i)(ii). Rule G-3(i)(i) would be revised by 
adding the paragraph header ``Continuing Education Requirements for 
Brokers, Dealers, and Municipal Securities Dealers.'' Rule G-3(i)(i)(D) 
would be revised by adding the paragraph header ``Reassociation'' and 
renumbered Rule G-3(i)(i)(A)(4). Rule G-3(i)(i)(E) would be relocated 
to proposed subparagraph Rule G-3(i)(i)(A)(4). Rule G-3(i)(ii) would be 
re-lettered Rule G-3(i)(i)(B). Due to these changes, other paragraphs 
under Rule G-3(i) would be renumbered and re-lettered.
    The MSRB requested in the Notice of Filing that the proposed rule 
change be approved with an implementation date of January 1, 2018.\18\ 
To comply with the annual training requirement for calendar year 2018, 
in accordance with the proposed implementation date, a municipal 
advisor would need to complete a needs analysis, develop a written 
training plan and deliver the appropriate training by December 31, 
2018.
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    \18\ See Notice of Filing.
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III. Summary of Comments Received and MSRB's Responses to Comments

    As noted previously, the Commission received one comment letter on 
the proposed rule change, as well as the MSRB Response Letter. The 
commenter, the National Association of Municipal Advisors (``NAMA''), 
expressed general support for the establishment of continuing education 
requirements for municipal advisors, noting that it believes it is 
imperative for municipal advisors to continue to expand their knowledge 
and improve their professional skills beyond the Municipal Advisor 
Representative Qualification Examination (Series 50 exam).\19\ NAMA 
also suggested that certain aspects of the proposed rule change be 
amended to include additional clarifications and guidance prior to its 
implementation.\20\ The MSRB believes the proposed rule change is 
consistent with its statutory mandate and has responded to the 
comments, as discussed below.\21\
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    \19\ See NAMA Letter.
    \20\ Id.
    \21\ See MSRB Response Letter.
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1. Additional Guidance on Needs Analysis Requirement and Effective Date

    NAMA requested that the MSRB develop interpretive guidance to help 
municipal advisor firms, especially small municipal advisor firms, 
better understand how to conduct needs analysis and provide examples of 
the types of trainings that could be employed by municipal advisors to 
meet the requirements of the proposed rule change.\22\ NAMA also 
requested that the implementation date of the proposed rule change be 
delayed until the MSRB has issued the interpretive guidance regarding 
the need analysis requirement, which NAMA believes is necessary for 
municipal advisors to adequately understand and comply with the 
proposed rule change.\23\
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    \22\ See NAMA Letter.
    \23\ Id.
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    The MSRB responded that, as it previously noted in the Notice of 
Filing, it recognizes that additional guidance on conducting a needs 
analysis and how to implement a continuing education program may 
benefit municipal advisor firms.\24\ The MSRB articulated that it 
intends to provide guidance to municipal advisor firms in understanding 
their obligations to develop a continuing education program before the 
proposed rule change is implemented.\25\ According to the MSRB, such 
guidance will include a sample needs analysis, a sample training plan 
and a non-exclusive list of delivery mechanisms that a municipal 
advisor firm could use in delivering and documenting training.\26\ 
Also, the MSRB stated that such guidance will be designed to assist a 
municipal advisor firm in tailoring the development and implementation 
of a continuing education program based on regulatory developments, the 
size and organizational structure of the firm and the municipal 
advisory activities the firm engages in.\27\ Such guidance, the MSRB 
stated, will not promote a one-size-fits-all continuing education 
program and will not create a safe harbor.\28\ The MSRB responded that 
it intends to provide implementation guidance in a webinar shortly 
following approval of the proposed rule change.\29\ In addition, the 
MSRB stated that it intends to issue additional guidance, including 
sample documentation, at least 90 days prior to the implementation 
date.\30\ The MSRB also noted that although it is proposed a January 1, 
2018 effective date, municipal advisors would have until December 31, 
2018 to complete a needs analysis, develop a written training plan and 
deliver the appropriate training to comply with the annual training 
requirements for calendar year 2018.\31\ Accordingly, the MSRB believes 
that municipal advisor firms will have sufficient time to implement 
procedures reasonably designed to achieve compliance with the 
continuing education requirements.\32\
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    \24\ See Notice of Filing.
    \25\ Id.
    \26\ Id.
    \27\ Id.
    \28\ Id.
    \29\ Id.
    \30\ Id.
    \31\ Id.
    \32\ Id.
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2. Additional Guidance on ``Appropriate Enforcement Authority''

    NAMA requested that the MSRB provide additional interpretive 
guidance regarding the scope of the power of the ``appropriate 
enforcement authority'' to require, pursuant to amended Rule G-
3(i)(ii)(D), training for individuals or a

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group within a municipal advisor following an examination.\33\
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    \33\ See NAMA Letter.
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    The MSRB stated that this provision is designed to provide the 
appropriate examining authority the discretion to determine, in the 
course of examining and enforcing compliance with MSRB rules, whether 
an associated person(s) of a municipal advisor requires additional 
training.\34\ The MSRB believes the provision is consistent with 
similar authority provided under MSRB Rule G-3(h)(ii)(D) with respect 
to the continuing education requirements for dealers.\35\
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    \34\ See MSRB Response Letter.
    \35\ Id.
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3. Economic Impact of MSRB Rulemaking

    NAMA stated that the MSRB should empirically evaluate the economic 
impact that the proposed rule change would have on sole practitioners 
and small municipal advisor firms, as well as the potential economic 
impact the entire municipal advisor regulatory regime has municipal 
advisors.\36\ In expressing its concerns, NAMA cited to a response it 
provided to a MSRB request for comment regarding an earlier stage of 
this rulemaking initiative where it stated the MSRB should recognize 
the multiple roles a principal in a small municipal advisor firm or a 
sole-practitioner municipal advisor has to their clients under the 
rulemaking regime already imposed by the MSRB and that the additional 
requirements of the proposed rule change for all municipal advisor and 
especially sole practitioners and smaller firms should be considered 
along with the already existing regulatory burden imposed by MSRB rules 
and not create an overwhelming economic or administrative burden on 
these professionals.\37\
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    \36\ See NAMA Letter.
    \37\ Id. See also Letter to Ronald W. Smith, MSRB, from Susan 
Gaffney, Executive Director, National Association of Municipal 
Advisors, dated November 14, 2016.
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    The MSRB stated that it has evaluated and articulated the economic 
impact associated with the proposed rule change in Notice of Filing in 
accordance with its Policy on the Use of Economic Analysis in MSRB 
Rulemaking \38\ and that it believes that the proposed rule change is 
consistent with the requirements of Section 15B(b)(2)(L)(iv) of the Act 
\39\ which provides that MSRB rules with respect to municipal advisors 
may 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.\40\ The MSRB also stated that it plans to assess retrospectively 
the impact and effectiveness of the municipal advisory framework once 
it is more fully in place and that the Board has discussed the 
importance of this future analysis to understanding the benefits and 
costs of the municipal advisory regulatory regime.\41\
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    \38\ See Policy on the Use of Economic Analysis in MSRB 
Rulemaking, MSRB, available at: http://msrb.org/rules-and-interpretations/economic-analysis-policy.
    \39\ 15 U.S.C. 78o-4(b)(2)(L)(iv).
    \40\ See MSRB Response Letter. See also Notice of Filing.
    \41\ See MSRB Response Letter.
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4. Standards of Conduct Applicable to Municipal Advisor Clients

    NAMA requested that the MSRB adopt a clarifying amendment to 
proposed Rule G-3(i)(ii)(B)(2)(a) to include ``obligated persons'' to 
the language of the proposed rule change to accommodate municipal 
advisors that have obligated person clients and not municipal entity 
clients.
    The MSRB believes that NAMA's suggested change would materially 
change the spirit and intent of the proposed rule change.\42\ The MSRB 
stated that the fiduciary duty standard is a keystone principal of the 
regulatory framework for municipal advisors and every municipal advisor 
needs to address the fiduciary duty obligation in their continuing 
education program.\43\ According to the MSRB, it recognizes that 
municipal advisory activities can vary from firm to firm and the 
proposed rule change therefore affords a municipal advisor sufficient 
flexibility to determine the extent and scope of the fiduciary duty 
training that needs to be included in its continuing education program 
based on the municipal advisory activities in which the firm 
engages.\44\
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    \42\ Id.
    \43\ Id. See also Notice of Filing.
    \44\ See MSRB Response Letter.
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IV. Discussion and Commission Findings

    The Commission has carefully considered the proposed rule change, 
the comment letter received, and the MSRB Response Letter. The 
Commission finds that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to the MSRB.
    In particular, the proposed rule change is consistent with Sections 
15B(b)(2)(A), 15B(b)(2)(L) and 15B(b)(2)(G) and of the Act.\45\ Section 
15B(b)(2)(A) of the Act states that the MSRB's rules shall 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 meets 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.\46\ The 
Commission believes the proposed rule change is consistent with Section 
15B(b)(2)(A) in that the proposed rule will provide for minimum levels 
of training for persons engaged in municipal advisor activities, which 
is in the public interest and for the protection of investors, 
municipal entities and obligated persons.
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    \45\ 15 U.S.C. 78o-4(b)(2)(A), 78o-4(b)(2)(L) and 78o-
4(b)(2)(G).
    \46\ 15 U.S.C. 78o-4(b)(2)(A).
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    Section 15B(b)(2)(L) of the Act \47\ provides that the MSRB's rules 
shall, with respect to municipal advisors: 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; 
provide continuing education requirements for municipal advisors; 
provide professional standards; and 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. The Commission believes the 
proposed rule change is consistent with Section 15B(b)(2)(L) in that 
the proposed rule will establish continuing education program 
requirements for municipal advisors. Requiring municipal advisors to 
establish a formal continuing education program for covered persons 
will ensure that individuals qualified as either a municipal advisor

[[Page 23398]]

representative or as a municipal advisor principal are kept informed of 
issues that affect their job responsibilities and of regulatory 
developments, which is in furtherance of the protection of investors 
against fraud and misconduct. The Commission also finds that the 
proposed rule change is consistent with Section 15B(b)(2)(L)(iv) of the 
Act in that it will 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. Although the proposed rule change will affect all municipal 
advisors, including small municipal advisors, the proposed rule change 
is a necessary and appropriate regulatory burden in order to protect 
investors, municipal entities and obligated persons.
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    \47\ 15 U.S.C. 78o-4(b)(2)(L).
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    The Commission also finds that the proposed rule change is 
consistent with Section 15B(b)(2)(G) of the Act \48\ which provides 
that the MSRB's rules shall prescribe records to be made and kept by 
municipal securities brokers, municipal securities dealers, and 
municipal advisors and the periods for which such records shall be 
preserved. The proposed rule change will, among other things, assist in 
ensuring that municipal advisors are complying with the amendments to 
proposed MSRB Rule G-3 by extending the existing recordkeeping 
requirements applicable to municipal advisors to include making and 
maintaining records relating to their continuing education program. 
Establishing a requirement for municipal advisors to maintain records 
reflecting their continuing education programs will assist the 
appropriate examining authority that examines municipal advisors in 
monitoring and promoting compliance with the proposed rule change.
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    \48\ 15 U.S.C. 78o-4(b)(2)(G).
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    In approving the proposed rule change, the Commission also has 
considered the impact of the proposed rule change on efficiency, 
competition, and capital formation.\49\ The Commission does not believe 
that the proposed rule change will impose any burden on competition not 
necessary or appropriate in furtherance of the purposes of the Act. The 
proposed rule change grants municipal advisors flexibility to develop 
regulatory training based on firm size, organizational structure, and 
scope of business activities. In addition, the proposed rule change 
allows for the development of a single training plan that is consistent 
with each needs analysis conducted by a dealer-municipal advisor. 
Moreover, dealer-municipal advisors can incorporate identified, firm-
specific training needs, with respect to their municipal advisory 
activities, into their existing training programs, as long as any 
offered training is consistent with the written training plan(s). Also, 
the Commission believes requiring municipal advisor's to meet 
continuing education requirements will promote compliance by municipal 
advisors with the regulations and laws that protect investors, 
municipal entities and obligated person by requiring them to keep 
informed of current issues and regulatory developments that affect 
their job responsibilities and will reduce the risk that users of 
municipal advisory services would receive advice that results in harm 
or negative impact. This improved compliance, in turn, will likely 
improve the market for municipal advisory services and its efficient 
operation. Furthermore, the Commission believes that the potential 
burdens created by the proposed rule change are to be likely outweighed 
by the benefits.
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    \49\ 15 U.S.C. 78c(f).
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    For the reasons noted above, the Commission believes that the 
proposed rule change is consistent with the Act.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\50\ that the proposed rule change (SR-2017-02) be, and hereby is, 
approved.
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    \50\ 15 U.S.C. 78s(b)(2).

    For the Commission, pursuant to delegated authority.\51\
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    \51\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-10303 Filed 5-19-17; 8:45 am]
BILLING CODE 8011-01-P