MSRB votes to let muni advisors use testimonials in ads


The Municipal Securities Rulemaking Board has voted to amend its Rule G-40 to allow municipal advisors to use testimonials in advertisements and Rule A-12 to make changes to Form A-12 on registration.

The changes to G-40 will amend the current provision that states “a municipal advisor shall not, directly or indirectly, publish circulate or distribute any advertisement which refers, directly or indirectly, to any testimonial of any kind concerning the municipal advisor or concerning the advice, analysis, report or other service rendered by the municipal advisor.”

The amendments will allow the use of testimonials, subject to limitations and aligns Rule G-40 with similar requirements under the Securities and Exchange Commission’s new Rule 206(4)-1 on investment advisor marketing.

“When the MSRB established advertising standards for municipal advisors in 2018, it sought to enhance the MSRB’s fair-dealing provisions by promoting regulatory alignment with other financial regulators,” said Patrick Brett, chair of the MSRB board. “In the same spirit, following the SEC’s modernization of its advertising rule for investment advisors, which allows investment advisors use of testimonials in marketing materials, the MSRB is proposing to make conforming amendments to Rule G-40.”

The amendments are expected to be filed with the SEC before the end of the calendar year.

The changes to Rule A-12 include extending the annual affirmation period through Jan. 31 of each calendar year, “permitting regulated entities to update optional information on Form A-12 during the annual affirmation period rather than within 30 days of a change,” the MSRB said.

On a voluntary basis, regulated entities would also be able to identify whether a firm has identified as a women and minority-owned business or veteran-owned small business.

The proposed amendments and changes to Form A-12 will be operational on Jan. 1, 2023 to coincide with the 2023 annual affirmation period.

All of this was voted on at the Board’s final meeting of the fiscal year and MSRB chief executive officer Mark Kim gave his thanks to departing board members.

 ”On behalf of the staff of the MSRB, I would like to thank Board Chair Patrick Brett along with our other departing Board members, Caroline Cruise, Joseph Darcy and Seema Mohanty for their dedication and service,” Kim said.

The MSRB’s new fiscal year begins Oct. 1, 2022, and will begin by swearing in Meredith Hathorn, partner at Foley & Judell as the Board chair and Carol Kostik, the retired former deputy comptroller for public finance for the City of New York, as vice chair.

Also joining the Board at the end of the month will be institutional investor representative David Belton, who is director of American Family Insurance, municipal issuer representative Horatio Porter, chief financial officer of North Texas Tollway Authority, bank representative Patrick Haskell, who serves as managing director and head of municipal securities and co-head of fixed income retail capital markets at Morgan Stanley, and municipal advisor representative Jill Jaworski, who is managing director and partner at PFM financial advisors.

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