ALEXANDRIA, Va.--(BUSINESS WIRE)--The Municipal Securities Rulemaking Board (MSRB) is issuing this advisory to highlight the application of its pay-to-play rule on political contributions from Wall Street firms to presidential campaigns of state or municipal officials.
“With multiple sitting governors on the presidential campaign trail, the MSRB believes it important to remind reporters and others about federal regulations governing political contributions from municipal securities dealers to officials of issuers of municipal securities,” said MSRB Executive Director Lynnette Kelly. “Every reporter covering the presidential election should be aware of MSRB Rule G-37.”
Rule G-37 aims to curb pay-to-play practices in the municipal market by prohibiting municipal securities dealers from engaging in municipal securities business with an issuer for two years after making certain political contributions to an official of that issuer. The rule applies to contributions made by the dealer firm, any municipal finance professional associated with the dealer (unless that professional is entitled to vote for the official), or any political action committee controlled by the dealer or any municipal finance professional. In 1995 the MSRB issued an interpretation that Rule G-37 is applicable to contributions given to officials of issuers who seek election to federal office, such as the presidency.
MSRB Rule G-37 also prohibits municipal securities dealers and municipal finance professionals from soliciting any person or political action committee to make any contributions, or coordinating any contributions, to an official of an issuer with which the dealer is engaging or is seeking to engage in municipal securities business.
Experts at the MSRB are available to discuss Rule G-37 and its implications on the 2016 presidential campaign.
About the MSRB
The MSRB protects investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. The MSRB fulfills this mission by regulating the municipal securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. To further protect market participants, the MSRB provides market transparency through its Electronic Municipal Market Access (EMMA®) website, the official repository for information on all municipal bonds. The MSRB also serves as an objective resource on the municipal market, conducts extensive education and outreach to market stakeholders, and provides market leadership on key issues. The MSRB is a Congressionally-chartered, self-regulatory organization governed by a 21-member board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is subject to oversight by the Securities and Exchange Commission.