science

Municipal Securities Rulemaking Board

Municipal Securities Rulemaking Board is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Municipal Securities Rulemaking Board rather than just read about it. In short: The Municipal Securities Rulemaking Board (MSRB) is a United States self-regulatory financial organization that writes investor protection rules and other rules regulating broker-dealers and banks in the municipal securities market. This including tax-exempt and taxable municipal bonds, municipal notes, and other securities issued by states, cities, and counties or their agencies to help finance public projects or f…

Key takeaways

Municipal Securities Rulemaking Board belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Municipal Securities Rulemaking Board to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Municipal Securities Rulemaking Board from memory before moving on to harder problems.

Reference excerpt

The Municipal Securities Rulemaking Board (MSRB) is a United States self-regulatory financial organization that writes investor protection rules and other rules regulating broker-dealers and banks in the municipal securities market. This including tax-exempt and taxable municipal bonds, municipal notes, and other securities issued by states, cities, and counties or their agencies to help finance public projects or for other public policy purposes.

History The MSRB was created by the Section 15B of the Securities Exchange Act of 1934 (as amended by the Securities Acts Amendments of 1975, Pub. L. 94–29, and codified at 15 U.S.C. § 78o-4(b)) to create a mechanism for the regulation of municipal securities as well as brokers, dealers, and banks in the municipal securities business. The Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 broadened the MSRB's rulemaking authority to also regulate so-called municipal advisors, which include financial advisors, swap advisors, brokers of guaranteed investment contracts and other market participants that advise on the issuance of municipal securities and provide certain other types of advice to state and local governments, public pension funds and other municipal entities on municipal derivatives, investment strategies and other financial matters. As of March 2013, since the SEC has not released the definition of "municipal advisor", the MSRB's rules in this regard are suspended and there is considerable concern in the industry as to whether underwriters and/or other regulated professionals may be viewed as municipal advisors, thereby having the related fiduciary duties. The MSRB's investor protection rules will be extended to protect municipal entities as well.

Mandate Like the Financial Industry Regulatory Authority (FINRA), the MSRB is a self-regulatory organization that is subject to oversight by the Securities and Exchange Commission (SEC). The MSRB is authorized to create rules 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, and processing information with respect to, and facilitating transactions in municipal securities, to remove impediments to and perfect the mechanism of a free and open market in municipal securities, and, in general, to protect investors and the public interest." While the MSRB sets standards for broker-dealers, banks, and municipal advisors, MSRB rules do not apply to issuers of municipal securities or other municipal entities, which Congress generally exempted from most provisions of the federal securities laws (such as the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940) otherwise applicable to private-sector issuers of corporate and other types of securities. MSRB rules are enforced by various other federal regulatory organizations, including the SEC, FINRA, the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC). Among its investor protection rules, the MSRB is best known for adopting the first nationwide Pay to Play rule, known as Rule G-37, designed to eliminate the use of political contributions to obtain municipal underwriting business from state and local governments. The MSRB's investor protection rules also apply to state-operated 529 plans marketed by broker-dealers, as well as to the underwriting, sales and trading of Build America Bonds and other taxable municipal obligations. In addition, the MSRB operates the Electronic Municipal Market Access (EMMA) system, which provides free on-line access to comprehensive municipal securities disclosure documents, trade prices, interest rate information, and market statistics.

Structure The MSRB is composed of members from regulated broker-dealers and banks as well as from the public. Beginning on October 1, 2010, the MSRB will be recomposed to consist of a majority of independent public members and to include representatives of municipal advisors.

See also Financial Industry Regulatory Authority (FINRA) Securities Investor Protection Corporation (SIPC) Securities market participants (United States)

References

External links Municipal Securities Rulemaking Board Electronic Municipal Market Access (EMMA) system

Illustrations

Worked examples

Example 1 — a first encounter with Municipal Securities Rulemaking Board

Start with the simplest possible case. Write down what Municipal Securities Rulemaking Board claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Municipal Securities Rulemaking Board before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Municipal Securities Rulemaking Board ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Municipal Securities Rulemaking Board

In research: Municipal Securities Rulemaking Board appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Municipal Securities Rulemaking Board in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Municipal Securities Rulemaking Board is common in secondary-school and first-year university syllabi. It links to neighbouring topics 1975 establishments in the United States, Financial regulatory authorities of the United States, Local government finance, so understanding it makes those chapters shorter.
In everyday life: Look for Municipal Securities Rulemaking Board outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Municipal Securities Rulemaking Board in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Municipal Securities Rulemaking Board means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Municipal Securities Rulemaking Board out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Municipal Securities Rulemaking Board in simple terms?

Why does Municipal Securities Rulemaking Board matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Municipal Securities Rulemaking Board?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Municipal Securities Rulemaking Board.