On January 22, 2010, the Municipal Securities Rulemaking Board (MSRB) published MSRB Notice 2010-01 (Notice), advising the public that the SEC approved amendments to Rule G-37, on political contributions to be made by brokers, dealers, and municipal securities dealers (collectively, dealers) and resulting prohibitions on municipal securities business, and Rule G-8, on books and records.
For purposes of this alert and the Notice, the term “bond ballot campaign” means any fund, organization, or committee that solicits or receives contributions to be used to support ballot initiatives seeking authorization for the issuance of municipal securities through public approval obtained by popular vote.
Effective February 1, 2010, the MSRB will require each dealer to:
The amendments to the rule do not, however, provide for a ban on municipal securities business as a result of contributions to bond ballot campaigns.
The amended Form G-37 will require disclosure of the following:
Rule G-37 has a de minimis exception to the reporting for contributions made by an MFP or non-MFP executive officer to a bond ballot campaign for a ballot initiative in which that officer is entitled to vote, if his/her total bond ballot campaign contributions do not exceed $250 per ballot initiative.
The Notice should prompt each dealer to re-examine its written policies and procedures to determine whether those policies and procedures are appropriate in light of the requirements of the Notice.
Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and colleagues.
If you have any questions about this alert or would like to discuss the topic further, please contact your Foley attorney or the following individuals:
Samuel J. (Sandy) Winer
Phillip M. Goldberg
Heidi H. Jeffery