[Federal Register Volume 80, Number 183 (Tuesday, September 22, 2015)]
[Notices]
[Pages 57240-57251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23975]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75932; File No. SR-MSRB-2015-09]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing of a Proposed Rule Change Consisting of 
Proposed Amendments to Rule G-20, on Gifts, Gratuities and Non-Cash 
Compensation, and Rule G-8, on Books and Records To Be Made by Brokers, 
Dealers, Municipal Securities Dealers, and Municipal Advisors, and the 
Deletion of Prior Interpretive Guidance

September 16, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 2, 2015, the Municipal Securities Rulemaking Board 
(the ``MSRB'' or ``Board'') filed with the Securities and Exchange 
Commission (the ``SEC'' or ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the MSRB. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(i).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The MSRB filed with the Commission a proposed rule change 
consisting of proposed amendments to Rule G-20 (with amendments, 
``proposed amended Rule G-20''), on gifts, gratuities and non-cash 
compensation, proposed amendments to Rule G-8, on books and records to 
be made by brokers, dealers, municipal securities dealers, and 
municipal advisors, and the deletion of prior interpretive guidance 
that would be codified by proposed amended Rule G-20 (the ``proposed 
rule change''). The MSRB requested that the proposed rule change be 
approved with an implementation date six months after the Commission 
approval date for all changes.
    The text of the proposed rule change is available on the MSRB's Web 
site at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2015-Filings.aspx, at the MSRB's principal office, and at the Commission's 
Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the MSRB included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The MSRB has prepared summaries, set forth in Sections 
A, B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Following the financial crisis of 2008, Congress enacted the Dodd-
Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank 
Act'').\3\ The Dodd-Frank Act amended Section 15B of the Exchange Act 
to establish a new federal regulatory regime requiring municipal 
advisors to register with the Commission, deeming them to owe a 
fiduciary duty to their municipal entity clients and granting the MSRB 
rulemaking authority over them. The MSRB, in the exercise of that 
rulemaking authority, has been developing a comprehensive regulatory 
framework for municipal advisors and their associated persons.\4\ 
Important elements of that regulatory framework are the proposed 
amendments to Rules G-20 \5\ and G-8.
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    \3\ Publix Law 111-203, 124 Stat. 1376 (2010).
    \4\ MSRB Rule D-11 defines ``associated persons'' as follows:
    Unless the context otherwise requires or a rule of the Board 
otherwise specifically provides, the terms ``broker,'' ``dealer,'' 
``municipal securities broker,'' ``municipal securities dealer,'' 
``bank dealer,'' and ``municipal advisor'' shall refer to and 
include their respective associated persons. Unless otherwise 
specified, persons whose functions are solely clerical or 
ministerial shall not be considered associated persons for purposes 
of the Board's rules.
    \5\ Existing Rule G-20 is designed, in part, to minimize the 
conflicts of interest that arise when a dealer attempts to induce 
organizations active in the municipal securities market to engage in 
business with such dealers by means of personal gifts or gratuities 
given to employees of such organizations. Rule G-20 helps to ensure 
that a dealer's municipal securities activities are undertaken in 
arm's length, merit-based transactions in which conflicts of 
interest are minimized. See MSRB Notice 2004-17 (Jun. 15, 2004).
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    The proposed rule change would further the purposes of the Exchange 
Act, as amended by the Dodd-Frank Act, by addressing improprieties and 
conflicts that may arise when municipal advisors and/or their 
associated persons

[[Page 57241]]

give gifts or gratuities to employees who may influence the award of 
municipal advisory business. Extending the policies embodied in 
existing Rule G-20 to municipal advisors through proposed amended Rule 
G-20 would ensure common standards for brokers, dealers, and municipal 
securities dealers (``dealers'') and municipal advisors (dealers, 
together with municipal advisors, ``regulated entities'') that all 
operate in the municipal securities market.\6\
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    \6\ MSRB Rule G-17 is the MSRB's fundamental fair-dealing rule. 
It provides that a dealer or municipal advisor, in the conduct of 
its municipal securities activities or municipal advisory 
activities, shall deal fairly with all persons and shall not engage 
in any deceptive, dishonest, or unfair practice. As frequently 
previously stated, Rule G-17 may apply regardless of whether Rule G-
20 or any other MSRB rule also may be applicable to a particular set 
of facts and circumstances. See, e.g., Interpretative Notice 
Concerning the Application of MSRB Rule G-17 to Underwriters of 
Municipal Securities (Aug. 2, 2012) (reminding underwriters of the 
application of Rule G-20, in addition to their obligations under 
Rule G-17).
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Proposed Amended Rule G-20
    In summary, the proposed amendments to Rule G-20 would:
     Extend the relevant existing provisions of the rule to 
municipal advisors and their associated persons and to gifts given in 
relation to municipal advisory activities;
     Consolidate and codify interpretive guidance, including 
interpretive guidance published by the Financial Industry Regulatory 
Authority, Inc. (``FINRA'') and adopted by the MSRB, to ease the 
compliance burden on regulated entities that must understand and comply 
with these obligations, and delete prior interpretive guidance that 
would be codified by proposed amended Rule G-20; and
     Add a new provision to prohibit the seeking or obtaining 
of reimbursement by a regulated entity of certain entertainment 
expenses from the proceeds of an offering of municipal securities.

Further, proposed amended Rule G-20 would include several revisions 
that are designed to assist regulated entities and their associated 
persons with their understanding of and compliance with the rule. Those 
revisions include the definition of additional key terms and the 
addition of a paragraph that sets forth the purpose of the rule. 
Proposed amended Rule G-20 is discussed below.
A. Extension of Rule G-20 to Municipal Advisors and Municipal Advisory 
Activities and Clarifying Amendments
    Proposed amended Rule G-20 would extend to municipal advisors and 
their associated persons: (i) The general dealer prohibition of gifts 
or gratuities in excess of $100 per person per year in relation to the 
municipal securities activities of the recipient's employer (the ``$100 
limit''); (ii) the exclusions contained in the existing rule from that 
general prohibition (including certain consolidations and the 
codifications of prior interpretive guidance) and the addition of 
bereavement gifts to those exclusions; and (iii) the existing exclusion 
relating to contracts of employment or compensation for services. 
Proposed section (g), on non-cash compensation in connection with 
primary offerings, would not be extended to municipal advisors or to 
associated persons thereof.
(i) General Prohibition of Gifts or Gratuities in Excess of $100 per 
Year
    Proposed section (c) (based on section (a) of existing Rule G-20) 
would extend to a municipal advisor and its associated persons the 
provision that currently prohibits a dealer and its associated persons, 
in certain circumstances, from giving directly or indirectly any thing 
or service of value, including gratuities (``gifts''), in excess of 
$100 per year to a person (other than an employee of the dealer). As 
proposed, the prohibited payments or services by a dealer or municipal 
advisor or associated persons would be those provided in relation to 
the municipal securities activities or municipal advisory activities of 
the employer of the recipient (other than an employee of the regulated 
entity).
(ii) Exclusions From the $100 Limit
    Proposed section (d) (based on section (b) of existing Rule G-20) 
would extend to a municipal advisor and its associated persons the 
provision that excludes certain gifts from the $100 limit of proposed 
section (c) as long as the conditions articulated by proposed section 
(d) and the relevant subsection, as applicable, are met. Proposed 
section (d) also would state that gifts, in order to be excluded from 
the $100 limit, must not give rise to any apparent or actual material 
conflict of interest.
    Proposed section (d) would include proposed subsections (d)(i) 
through (d)(iv) and (d)(vi) that would consolidate and codify 
interpretive guidance that the MSRB provided in MSRB Notice 2007-06 
(the ``2007 MSRB Gifts Notice'').\7\ That notice encouraged dealers to 
adhere to the highest ethical standards and reminded dealers that Rule 
G-20 was designed to ``avoid conflicts of interest.'' \8\ The 2007 MSRB 
Gifts Notice's interpretive guidance also included FINRA guidance that 
the MSRB had adopted by reference.\9\ Further, proposed subsection 
(d)(v) would codify FINRA interpretive guidance relating to bereavement 
gifts that the MSRB previously had not adopted.\10\ The MSRB believes 
that these proposed codifications will (i) enhance the understanding of 
the interpretive guidance applicable to the exclusions, (ii) foster 
compliance with the rule, and (iii) enhance efficiencies for regulated 
entities and regulatory enforcement agencies. A more detailed 
discussion of the subsections to proposed section (d) is provided 
below.
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    \7\ See Dealer Payments in Connection with the Municipal 
Issuance Process, MSRB Notice 2007-06 (Jan. 29, 2007).
    \8\ Id.
    \9\ See 2007 MSRB Gifts Notice (reminding dealers of the 
application of Rule G-20 and Rule G-17 in connection with certain 
payments made and expenses reimbursed during the municipal bond 
issuance process, and stating that the National Association of 
Securities Dealers, Inc.'s (``NASD'') guidance provided in NASD 
Notice to Members 06-69 (Dec. 2006) to assist dealers in complying 
with NASD Rule 3060 applies as well to comparable provisions of Rule 
G-20).
    \10\ See FINRA Letter to Amal Aly, SIFMA (Reasonable and 
Customary Bereavement Gifts), dated December 17, 2007 (stating that 
FINRA staff agrees that reasonable and customary bereavement gifts 
(e.g., appropriate flowers, food platter for the mourners, 
perishable items intended to comfort the recipient or recipient's 
family) are not ``in relation to the business of the employer of the 
recipient'' under FINRA Rule 3060, but that bereavement gifts beyond 
what is reasonable and customary would be deemed to be gifts in 
relation to the business of the employer of the recipient and 
subject to the $100 limit of Rule 3060) (``FINRA bereavement gift 
guidance'').
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    Proposed subsection (d)(i) would exclude, as is currently the case 
for dealers under existing Rule G-20, a gift of meals or tickets to 
theatrical, sporting, and other entertainment given by a regulated 
entity or its associated persons from the $100 limit if they are a 
``normal business dealing.'' The regulated entity or its associated 
persons would be required to host the gifted event, as is currently the 
case for dealers. If the regulated entity or its associated persons 
were to fail to host gifts of these types, then those gifts would be 
subject to the $100 limit. In addition, the regulated entity would be 
excluded from the $100 limit if it were to sponsor legitimate business 
functions that are recognized by the Internal Revenue Service as 
deductible business expenses. Finally, municipal advisors and their 
associated persons would be held to the same standard as dealers, in 
that gifts would not qualify as ``normal business dealings'' if they 
were ``so frequent or so extensive as to raise any question of 
propriety.''
    Proposed subsections (d)(ii) through (iv) would establish three 
categories of

[[Page 57242]]

gifts that previously were excluded from the $100 limit under the 
category of ``reminder advertising'' in the rule language regarding 
``normal business dealings'' in existing section (b) of Rule G-20. The 
MSRB believes that these more specific categories in the proposed new 
subsections will assist regulated entities with their compliance 
obligations by providing additional guidance on the types of gifts that 
constitute reminder advertising under the existing rule. Those more 
specific categories are:
     Gifts commemorative of a business transaction, such as a 
desk ornament or Lucite tombstone (proposed subsection (d)(ii));
     de minimis gifts, such as pens and notepads (proposed 
subsection (d)(iii)); and
     promotional gifts of nominal value that bear an entity's 
corporate or other business logo and that are substantially below the 
$100 limit (proposed subsection (d)(iv)).
    Proposed subsection (d)(v) would exclude bereavement gifts from the 
$100 limit. That proposed subsection would consolidate and codify the 
FINRA bereavement gift guidance currently applicable to dealers that 
exempts customary and reasonable bereavement gifts from the $100 limit. 
Under proposed subsection (d)(v), the bereavement gift would be 
required to be reasonable and customary for the circumstances.
    Finally, proposed subsection (d)(vi) would exclude personal gifts 
given upon the occurrence of infrequent life events, such as a wedding 
gift or a congratulatory gift for the birth of a child. Similar to 
proposed subsection (d)(v), proposed subsection (d)(vi) would 
consolidate and codify the FINRA personal gift guidance currently 
applicable to dealers. That guidance exempts personal gifts that are 
not ``in relation to the business of the employer of the recipient'' 
\11\ from the $100 limit. Proposed paragraph .04 of the Supplementary 
Material, discussed below, would provide guidance as to types of 
personal gifts that generally would not be subject to the $100 limit.
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    \11\ NASD Notice to Members 06-69 (Dec. 2006).
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    With regard to proposed subsections (d)(ii) through (vi), the 
``frequency'' and ``extensiveness'' limitations applicable to proposed 
subsection (d)(i) would not apply. The MSRB is proposing to modify 
those limitations to better reflect the characteristics of the gifts 
described in proposed subsections (d)(ii) through (vi). Gifts described 
in those subsections would be gifts that are not subject to the $100 
limit, and, typically would not give rise to a conflict of interest 
that Rule G-20 was designed to address. Transaction-commemorative 
gifts, de minimis gifts, promotional gifts, bereavement gifts, and 
personal gifts, as described in the proposed rule change, by their 
nature, are given infrequently and/or are of such nominal value that 
retaining the requirement that such gifts be ``not so frequent or 
extensive'' would be unnecessarily duplicative of the description of 
these gifts and could result in confusion.
    To assist regulated entities with their understanding of the rule's 
exclusions and with their compliance with the rule, the proposed rule 
change would provide guidance regarding promotional gifts and ``other 
business logos'' (proposed paragraph .03 of the Supplementary Material) 
and personal gifts (proposed paragraph .04 of the Supplementary 
Material). Specifically, proposed paragraph .03 would clarify that the 
logos of a product or service being offered by a regulated entity, for 
or on behalf of a client or an affiliate of the regulated entity, would 
constitute an ``other business logo'' under proposed subsection 
(d)(iv). The promotional items bearing such logos, therefore, would be 
excluded from the $100 limit so long as they meet all of the other 
terms of proposed section (d) and proposed subsection (d)(iv), 
including the requirement that the promotional items not give rise to 
any apparent or actual material conflict of interest.\12\ These items 
would qualify as excluded promotional gifts because they are as 
unlikely to result in improper influence as items that previously have 
been excluded (i.e., those items bearing the corporate or other 
business logo of the regulated entity itself).
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    \12\ The logo of a 529 college savings plan (``529 plan'') for 
which a dealer is acting as a distributor would likely constitute an 
``other business logo'' under proposed paragraph .03 of the 
Supplementary Material. For purposes of determining the 
applicability of proposed amended Rule G-20 and the exclusion from 
the $100 limit under proposed subsection (d)(iv), the analysis would 
``look through'' to the ultimate recipient of the gift. For example, 
a state issuer arranges to have a box of 200 tee shirts containing 
the logo of its 529 advisor-sold plan delivered to the 529 plan's 
primary distributor. That distributor, in turn, provides the box of 
tee shirts to a selling firm. Registered representatives of that 
selling firm then distribute one tee shirt to each of 200 school 
children. Each gift of a tee shirt would constitute one gift to each 
school child.
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    Proposed paragraph .04 of the Supplementary Material regarding 
personal gifts would state that a number of factors should be 
considered when determining whether a gift is in relation to the 
municipal securities or municipal advisory activities of the employer 
of the recipient. Those factors would include, but would not be limited 
to, the nature of any pre-existing personal or family relationship 
between the associated person giving the gift and the recipient and 
whether the associated person or the regulated entity with which he or 
she is associated paid for the gift.\13\ Proposed paragraph .04 would 
also state that a gift would be presumed to be given in relation to the 
municipal securities or municipal advisory activities, as applicable, 
of the employer of the recipient when a regulated entity bears the cost 
of a gift, either directly or indirectly by reimbursing an associated 
person.
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    \13\ See supra n.11.
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(iii) Exclusion for Compensation Paid as a Result of Contracts of 
Employment or Compensation for Services
    Proposed section (f) would extend to municipal advisors the 
exclusion from the $100 limit in existing Rule G-20(c) for contracts of 
employment with or compensation for services that are rendered pursuant 
to a prior written agreement meeting certain content requirements. 
However, proposed section (f) would clarify that the type of payment 
that would be excluded from the general limitation of proposed section 
(c) is ``compensation paid as a result of contracts of employment,'' 
and not, simply, ``contracts of employment'' (emphasis added). The MSRB 
is proposing this amendment to clarify that the exclusion in proposed 
section (f) from the limitation of proposed section (c) does not apply 
to the existence or creation of employment contracts. Rather, that 
exclusion would apply to the compensation paid as a result of certain 
employment contracts. This amendment is only a clarification and would 
not alter the requirements currently applicable to dealers.
B. Consolidation and Codification of MSRB and FINRA Interpretive 
Guidance
    As discussed above under ``Extension of Rule G-20 to Municipal 
Advisors and Municipal Advisory Activities and Clarifying Amendments,'' 
the proposed amendments would consolidate and codify existing FINRA 
interpretive guidance previously adopted by the MSRB and incorporate 
additional relevant FINRA interpretive guidance that has not previously 
been adopted by the MSRB. The interpretive guidance codified by the 
proposed amendments would provide that gifts and gratuities that 
generally would not be subject to the $100 limit would include: 
transaction-commemorating,\14\ de

[[Page 57243]]

minimis,\15\ promotional,\16\ bereavement \17\ and personal gifts \18\ 
discussed above.
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    \14\ Proposed subsection (d)(ii), on transaction-commemorative 
gifts.
    \15\ Proposed subsection (d)(iii), on de minimis gifts.
    \16\ Proposed subsection (d)(iv), on promotional gifts.
    \17\ Proposed subsection (d)(v), on bereavement gifts.
    \18\ Proposed subsection (d)(vi), on personal gifts.
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    The substance of the statement in the 2007 MSRB Gifts Notice, which 
provides that certain portions of the NASD Notice to Members 06-69 
apply as well to comparable provisions of MSRB Rule G-20, would be 
codified in the proposed rule change, That portion of the 
interpretative guidance, accordingly, would be deleted. While FINRA's 
interpretive guidance regarding bereavement gifts was not formerly 
adopted by the MSRB, the MSRB believes that this guidance will be 
appropriate for regulated entities as it would be consistent with the 
purpose and scope of proposed amended Rule G-20. Further, the MSRB 
believes that the consolidation and codification of applicable 
interpretive guidance will foster compliance with the rule as well as 
create efficiencies for regulated entities and regulatory enforcement 
agencies.
    In addition to the interpretive guidance discussed above, proposed 
paragraphs .01, .02, and .05 of the Supplementary Material would 
provide guidance relating to the valuation and the aggregation of gifts 
and to the applicability of state laws. Proposed paragraph .01 of the 
Supplementary Material would state that a gift's value should be 
determined generally according to the higher of its cost or market 
value. Proposed paragraph .02 of the Supplementary Material would state 
that regulated entities must aggregate all gifts that are subject to 
the $100 limit given by the regulated entity and each associated person 
of the regulated entity to a particular recipient over the course of a 
year however ``year'' is selected to be defined by the regulated entity 
(i.e., calendar year or fiscal year, or rolling basis). Proposed 
paragraphs .01 and .02 reflect existing FINRA interpretive guidance 
regarding the aggregation of gifts for purposes of its gift rules, 
which the MSRB has previously adopted.\19\
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    \19\ NASD Notice to Members 06-69 (Dec. 2006); 2007 MSRB Gifts 
Notice.
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    Proposed paragraph .05 of the Supplementary Material would remind 
regulated entities that, in addition to all the requirements of 
proposed amended Rule G-20, regulated entities may also be subject to 
other duties, restrictions, or obligations under state or other laws. 
In addition, proposed paragraph .05 would provide that proposed amended 
Rule G-20 would not supersede any more restrictive provisions of state 
or other laws applicable to regulated entities or their associated 
persons. As applied to many municipal advisors previously unregistered 
with, and unregulated by, the MSRB and their associated persons, the 
provision would serve to directly alert or remind municipal advisors 
that additional laws and regulations may apply in this area.\20\
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    \20\ The MSRB previously had provided this alert or reminder 
through interpretative guidance. See 2007 MSRB Gifts Notice (noting 
that state and local laws also may limit or proscribe activities of 
the type addressed in this notice).
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C. Prohibition of Reimbursement for Entertainment Expenses
    Proposed section (e) of Rule G-20 would provide that a regulated 
entity is prohibited from requesting or obtaining reimbursement for 
certain entertainment expenses from the proceeds of an offering of 
municipal securities. This provision would address a matter highlighted 
by a recent FINRA enforcement action.\21\ Specifically, proposed 
section (e) would provide that a regulated entity that engages in 
municipal securities or municipal advisory activities for or on behalf 
of a municipal entity or obligated person in connection with an 
offering of municipal securities is prohibited from requesting or 
obtaining reimbursement of its costs and expenses related to the 
entertainment of any person, including, but not limited to, any 
official or other personnel of the municipal entity or personnel of the 
obligated person, from the proceeds of such offering of municipal 
securities.
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    \21\ Department of Enforcement v. Gardnyr Michael Capital, Inc. 
(CRD No. 30520) and Pfilip Gardnyr Hunt, Jr., FINRA Disciplinary 
Proceeding No. 2011026664301 (Jan. 28, 2014) (concluding that, while 
the hearing panel did not ``endorse the practice of municipal 
securities firms seeking and obtaining reimbursement for 
entertainment expenses incurred in bond rating trips,'' neither the 
MSRB's rules nor interpretive guidance put the dealer on fair notice 
that such conduct would be unlawful); see 2007 MSRB Gifts Notice 
(stating that ``dealers should consider carefully whether payments 
they make in regard to expenses of issuer personnel in the course of 
the bond issuance process, including in particular but not limited 
to payments for which dealers seek reimbursement from bond proceeds, 
comport with the requirements of'' Rules G-20 and G-17).
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    Proposed section (e), however, limits what would constitute an 
entertainment expense. Specifically, the term ``entertainment 
expenses'' would exclude ``ordinary and reasonable expenses for meals 
hosted by the regulated entity and directly related to the offering for 
which the regulated entity was retained.'' Proposed subsection (e) also 
would be intended to allow the continuation of the generally accepted 
market practice of a regulated entity advancing normal travel costs 
(e.g., reasonable airfare and hotel accommodations) to personnel of a 
municipal entity or obligated person for business travel related to a 
municipal securities issuance, such as bond rating trips and obtaining 
reimbursement for such costs. Some examples of prohibited entertainment 
expenses that would, for purposes of proposed section (e), be included 
are tickets to theater, sporting or other recreational spectator 
events, sightseeing tours, and transportation related to attending such 
entertainment events.
D. Additional Proposed Amendments to Rule G-20
    In addition to the previously discussed proposed amendments to Rule 
G-20, the MSRB also is proposing several amendments to assist readers 
with their understanding of and compliance with Rule G-20. These 
proposed amendments include (i) a revised rule title, (ii) a new 
provision stating the rule's purpose, and (iii) a re-ordering of 
existing provisions and additional defined terms.
(i) Amendment to Title
    To better reflect the content of proposed amended Rule G-20, the 
title of the rule would be amended to include the phrase ``Expenses of 
Issuance.'' This amendment would alert readers that the rule addresses 
expenses that are related to the issuance of municipal securities and 
that the reader should consult the rule if a question arises regarding 
such a matter.
(ii) Addition of Purpose Section
    Proposed section (a) would set forth the purpose of Rule G-20. It 
would include a brief synopsis of the rule's scope and function.
(iii) Re-ordering and Definitions of Terms
    To assist readers with their understanding of the rule, proposed 
section (b), at the beginning of the proposed amended rule, would 
define terms that currently are included in the last section of 
existing Rule G-20, section (e).
    The MSRB is also proposing to include three additional defined 
terms solely for the purposes of proposed amended Rule G-20: 
``person,'' ``municipal advisor'' and ``regulated entity.'' ``Regulated 
entity'' would mean a broker, dealer, municipal securities dealer or 
municipal advisor, but would exclude the associated persons of such

[[Page 57244]]

entities. Incorporation of this term into the rule would simplify and 
shorten the text of proposed amended Rule G-20 as it would replace 
applicable references within proposed amended Rule G-20 to dealers 
while also including municipal advisors. The term ``municipal advisor'' 
would have the same meaning as in Section 15B(e)(4) of the Exchange 
Act.\22\ The MSRB included that term to clarify that proposed amended 
Rule G-20 would apply to municipal advisors that are such on the basis 
of providing advice and also that are such on the basis of undertaking 
a solicitation.\23\ ``Person'' would mean a natural person, codifying 
the MSRB's existing interpretive guidance stating the same.\24\
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    \22\ 15 U.S.C. 78o-4(e)(4).
    \23\ Id.
    \24\ See MSRB Interpretive Letter ``Person'' (Mar. 19, 1980).
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Proposed Amendments to Rule G-8
    Proposed amendments to Rule G-8 would extend to municipal advisors 
the recordkeeping requirements related to Rule G-20 that currently 
apply to dealers.\25\ Those recordkeeping requirements would be set 
forth under proposed paragraphs (h)(ii)(A) and (B) of Rule G-8. 
Municipal advisors would be required to make and retain records of (i) 
all gifts and gratuities that are subject to the $100 limit and (ii) 
all agreements of employment or for compensation for services rendered 
and records of all compensation paid as a result of those agreements. 
Municipal advisor recordkeeping requirements would be identical to the 
recordkeeping requirements to which dealers would be subject in 
proposed amended Rule G-8(a)(xvii)(A) and (B) (discussed below). The 
MSRB believes that the proposed amendments to Rule G-8 will ensure 
common standards for municipal advisors and dealers, and will assist in 
the enforcement of proposed amended Rule G-20 by requiring that 
regulated entities, including municipal advisors, create and maintain 
records to document their compliance with proposed amended Rule G-20.
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    \25\ The MSRB solicited comments regarding possible amendments 
to Rule G-9 in its Request for Comment on Draft Amendments to MSRB 
Rule G-20, on Gifts, Gratuities and Non-Cash Compensation, to Extend 
its Provisions to Municipal Advisors, MSRB Notice 2014-18 (Oct. 23, 
2014). However, the MSRB omitted those amendments from this proposed 
rule change because their substance subsequently was addressed by a 
separate rulemaking initiative. See Notice of Filing of Amendment 
No. 1 and Order Granting Accelerated Approval of a Proposed Rule 
Change, as Modified by Amendment No. 1, Consisting of Proposed New 
Rule G-44, on Supervisory and Compliance Obligations of Municipal 
Advisors; Proposed Amendments to Rule G-8, on Books and Records to 
be Made by Brokers, Dealers and Municipal Securities Dealers; and 
Proposed Amendments to Rule G-9, on Preservation of Records, 
Exchange Act Release No. 73415 (Oct. 23, 2014), 79 FR 64423 (Oct. 
29, 2014) (File No. SR-MSRB-2014-06).
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    Further, the Board is proposing to amend the rule language 
contained in Rule G-8(a)(xvii)(A), (B), and (C) applicable to dealers, 
to reflect the revisions to proposed amended Rule G-20. Specifically, 
proposed amended paragraph (a)(xvii)(A) would provide that a separate 
record of any gift or gratuity subject to the general limitation of 
proposed amended Rule G-20(c) must be made and kept by dealers 
(emphasis added to amended rule text). The proposed amendments to 
paragraph (a)(xvii)(A) would track the reordering of sections in 
proposed amended Rule G-20 (replacing the reference to Rule G-20(a) 
with a reference to Rule G-20(c)) and would provide greater specificity 
as to the records that a dealer must maintain by referencing the terms 
used in proposed amended Rule G-20(c). Paragraph (a)(xvii)(B) would be 
amended to clarify that dealers must make and keep records of all 
agreements referred to in proposed amended Rule G-20(f) and records of 
all compensation paid as a result of those agreements (emphasis added 
to proposed amended rule text). Similar to paragraph (a)(xvii)(A), the 
proposed amendments to paragraph (a)(xvii)(B) would track the 
reordering of sections in proposed amended Rule G-20 (replacing the 
reference to Rule G-20(c) with a reference to proposed amended Rule G-
20(f)) and would provide greater specificity as to the types of records 
that a dealer must maintain by referencing the terms used in proposed 
amended Rule G-20(f). Paragraph (a)(xvii)(C) also would be amended to 
track the reordering of sections in proposed amended Rule G-20 
(replacing the references to Rule G-20(d) with references to proposed 
amended Rule G-20(g)).
2. Statutory Basis
    Section 15B(b)(2) of the Exchange Act \26\ provides that
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78o-4(b)(2).

    [t]he Board shall propose and adopt rules to effect the purposes 
of this title with respect to transactions in municipal securities 
effected by brokers, dealers, and municipal securities dealers and 
advice provided to or on behalf of municipal entities or obligated 
persons by brokers, dealers, municipal securities dealers, and 
municipal advisors with respect to municipal financial products, the 
issuance of municipal securities, and solicitations of municipal 
entities or obligated persons undertaken by brokers, dealers, 
municipal securities dealers, and municipal advisors.
    Section 15B(b)(2)(C) of the Exchange Act \27\ provides that the 
MSRB's rules shall be 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, processing 
information with respect to, and facilitating transactions in 
municipal securities and municipal financial products, to remove 
impediments to and perfect the mechanism of a free and open market 
in municipal securities and municipal financial products, and, in 
general, to protect investors, municipal entities, obligated 
persons, and the public interest.
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78o-4(b)(2)(C).

    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2) and Section 15B(b)(2)(C) of the Exchange Act. The 
proposed rule change would help prevent fraudulent and manipulative 
practices, promote just and equitable principles of trade and protect 
investors, municipal entities, obligated persons and the public 
interest by reducing, or at least exposing, the potential for conflicts 
of interest in municipal advisory activities by extending the relevant 
provisions of existing Rule G-20 to municipal advisors and their 
associated persons. Proposed amended Rule G-20 would help ensure that 
engagements of municipal advisors, as well as engagements of dealers, 
are awarded on the basis of merit and not as a result of gifts made to 
employees controlling the award of such business. By expressly 
prohibiting the seeking of reimbursement from the proceeds of issuance 
expenses for the entertainment of any person, including any official or 
other municipal entity personnel or obligated person personnel, 
proposed amended Rule G-20 would serve as an effective means of 
curtailing such practices by providing regulated entities with clear 
notice and guidance regarding the existing MSRB regulations of such 
matters. Further, proposed amended Rule G-20 would enhance compliance 
with Rule G-20 by codifying certain MSRB interpretive guidance and by 
adopting and codifying certain FINRA interpretive guidance. This 
codification not only will heighten regulated entity compliance and 
efficiency (and heighten regulatory enforcement efficiency), but will 
help prevent inadvertent violations of Rule G-20.
    In addition, the proposed amendments to Rule G-8 would assist in 
the enforcement of Rule G-20 by extending the relevant existing 
recordkeeping requirements of Rule G-8 that currently are applicable to 
dealers to municipal advisors. Regulated

[[Page 57245]]

entities, in a consistent and congruent manner, would be required to 
create and maintain records of (i) any gifts subject to the $100 limit 
in proposed amended Rule G-20(c) and (ii) all agreements for services 
referred to in proposed amended Rule G-20(f), along with the 
compensation paid as a result of such agreements. The MSRB believes 
that the requirement that all regulated entities create and retain the 
documents required by proposed amended Rule G-8 will allow 
organizations that examine regulated entities to more precisely monitor 
and promote compliance with the proposed rule change. Increased 
compliance with the proposed rule change would likely reduce the 
frequency and magnitude of conflicts of interests that could 
potentially result in harm to investors, municipal entities, or 
obligated persons, or undermine the public's confidence in the 
municipal securities market.
    Section 15B(b)(2)(L)(iv) of the Exchange Act \28\ requires that 
rules adopted by the Board:
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78o-4(b)(2)(L)(iv).

    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 MSRB believes that while the proposed rule change will affect 
all municipal advisors, it is a necessary regulatory burden because it 
will curb practices that could harm municipal entities and obligated 
persons. Specifically, the MSRB believes the proposed rule change will 
lessen the frequency and severity of violations of the public trust by 
elected officials and others involved in the issuance of municipal 
securities that might otherwise have their decisions regarding the 
awarding of municipal advisory business influenced by the gifts given 
by regulated entities and their associated persons. While the proposed 
rule change would burden some small municipal advisors, the MSRB 
believes that any such burden is outweighed by the need to maintain the 
integrity of the municipal securities market and to preserve investor 
and public confidence in the municipal securities market, including the 
bond issuance process.
    The MSRB also believes that the proposed rule change is consistent 
with Section 15B(b)(2)(G) of the Exchange Act,\29\ which provides that 
the MSRB's rules shall
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78o-4(b)(2)(G).

    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 would extend the provisions of existing 
Rule G-8 to require that municipal advisors as well as dealers make and 
keep records of: gifts given that are subject to the $100 limit; and 
all agreements referred to in proposed section (f) (on compensation for 
services) and records of compensation paid as a result of those 
agreements. The MSRB believes that the proposed amendments to Rule G-8 
related to books and records will promote compliance with and 
facilitate enforcement of proposed amended Rule G-20, other MSRB rules 
such as Rule G-17, and other applicable securities laws and 
regulations.

B. Self-Regulatory Organization's Statement on Burden on Competition

    Section 15B(b)(2)(C) of the Exchange Act \30\ requires that MSRB 
rules not be designed to impose any burden on competition not necessary 
or appropriate in furtherance of the purposes of the Exchange Act. In 
addition, Section 15B(b)(2)(L)(iv) of the Exchange Act provides that 
MSRB rules 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.\31\
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78o-4(b)(2)(C).
    \31\ 15 U.S.C. 78o-4(b)(2)(L)(iv).
---------------------------------------------------------------------------

    In determining whether these standards have been met, the MSRB was 
guided by the Board's Policy on the Use of Economic Analysis in MSRB 
Rulemaking.\32\ In accordance with this policy, the Board has evaluated 
the potential impacts on competition of the proposed rule change, 
including in comparison to reasonable alternative regulatory 
approaches, relative to the baseline. The MSRB also considered other 
economic impacts of the proposed rule change and has addressed any 
comments relevant to these impacts in other sections of this document.
---------------------------------------------------------------------------

    \32\ Policy on the Use of Economic Analysis in MSRB Rulemaking, 
available at, http://www.msrb.org/About-MSRB/Financial-and-Other-Information/Financial-Policies/Economic-Analysis-Policy.aspx.
---------------------------------------------------------------------------

    The MSRB does not believe that the proposed rule change will impose 
any additional burdens on competition, relative to the baseline, that 
are not necessary or appropriate in furtherance of the purposes of the 
Exchange Act. To the contrary, the MSRB believes that the proposed rule 
change is likely to increase competition.
    Extending the relevant current restrictions to municipal advisors 
and their municipal advisory activities will, the MSRB believes, 
promote merit-based (e.g., the quality of advice, level of expertise 
and services offered by the municipal advisor) and price-based 
competition for municipal advisory services and curb or limit the 
selection or retention of a municipal advisor based on the receipt of 
gifts. A market in which the participants compete on the basis of price 
and quality is more likely to represent a ``level playing field'' for 
existing providers and encourage the entry of well-qualified new 
providers. Of particular note is the positive impact the proposed 
changes are likely to have on dealers that are also municipal advisors 
that may currently be at a competitive disadvantage vis-[agrave]-vis 
municipal advisors that are not subject to any of the current 
restrictions of Rule G-20 or the associated requirements of Rule G-8.
    The proposed prohibition against the use of offering proceeds to 
pay certain entertainment expenses, which would apply to all regulated 
entities, is also, for the reasons stated above, likely to have no 
negative impact on competition and, to the contrary, may foster greater 
competition among all regulated entities.
    The MSRB considered whether costs associated with the proposed rule 
change, relative to the baseline, could affect the competitive 
landscape. The MSRB recognizes that the compliance, supervisory and 
recordkeeping requirements associated with the proposed rule change may 
impose costs and that those costs may disproportionately affect 
municipal advisors that are not also broker-dealers or that have not 
otherwise previously been regulated in this area and have not already 
established compliance programs to comply with the current requirements 
of Rule G-20 or the associated requirements of Rule G-8 and MSRB Rule 
G-27. During the comment period, the MSRB sought information that would 
support quantitative estimates of these costs, but did not receive any 
relevant data.
    For those municipal advisors with no Rule G-20 compliance program 
or relevant experience, however, the MSRB believes the existing 
requirements of MSRB Rule G-44 provide a foundation upon which Rule G-
20 specific compliance activities can be built and likely significantly 
reduces the marginal cost of complying with the proposed changes to 
Rule G-20. To further reduce

[[Page 57246]]

compliance costs and reduce inadvertent violations of Rule G-20, the 
MSRB has distilled and incorporated additional interpretive guidance 
that was not previously included in the draft amendments and clarified 
specific points. The MSRB believes these refinements will help minimize 
costs that could affect the competitive landscape and will particularly 
benefit smaller firms.
    Nonetheless, the MSRB recognizes that small municipal advisors and 
sole proprietors may not employ full-time compliance staff and that the 
cost of ensuring compliance with the requirements of the proposed rule 
change may be proportionally higher for these smaller firms, 
potentially leading to exit from the industry or consolidation. 
However, as the SEC recognized in its Order Adopting the SEC Final 
Rule, the market for municipal advisory services is likely to remain 
competitive despite the potential exit of some municipal advisors 
(including small entity municipal advisors) or the consolidation of 
municipal advisors.\33\
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    \33\ Exchange Act Release No. 70462 (Sept. 20, 2013) 78 FR 
67468, 67608 (Nov. 12, 2013).
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The MSRB received eight comment letters \34\ in response to the 
Request for Comment on the draft amendments to Rules G-20 and G-8. Many 
commenters expressed support for the draft amendments. NAMA welcomed 
the amendments and their attempt to limit the gaining of influence 
through the giving of gifts and gratuities. BDA and SIFMA expressed 
their general support of extending Rule G-20's requirements to 
municipal advisors as each believed the amendments would promote a 
level-playing field for the regulation of municipal advisors and 
dealers acting in the municipal securities and municipal advisory 
marketplace. Several commenters, however, expressed concerns or 
suggested changes to the draft amendments. The comment letters are 
summarized and addressed below by topic.
---------------------------------------------------------------------------

    \34\ Comments were received in response to the Request for 
Comment from: An anonymous attorney (``Anonymous''), Bond Dealers of 
America: Letter from Michael Nicholas, Chief Executive Officer, 
dated December 8, 2014 (``BDA''); Chris Taylor, dated October 23, 
2014 (``Taylor''); FCS Group: Letter from Taree Bollinger, dated 
October 24, 2014 (``FCS''); Investment Company Institute: Letter 
from Tamara K. Salmon, Senior Associate Counsel, dated December 5, 
2014 (``ICI''); National Association of Municipal Advisors: Letter 
from Terri Heaton, President, dated December 8, 2014 (``NAMA'') 
(formerly, National Association of Independent Public Finance 
Advisors); The PFM Group: Letter from Joseph J. Connolly, Counsel, 
dated November 7, 2014 (``PFM''); and Securities Industry and 
Financial Markets Association: Letter from Leslie M. Norwood, 
Managing Director and Associate General Counsel, dated December 8, 
2014 (``SIFMA'').
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A. $100 Limit
    NAMA and PFM expressed concerns that the $100 limit would not 
adequately apply to gifts given to certain recipients that, in their 
opinion, should be subject to the $100 limit of proposed amended Rule 
G-20. Further, NAMA and Anonymous suggested revisions to the amount of 
the $100 limit.
(i) Application of Proposed Amended Rule G-20(c) to Certain Recipients
    NAMA believed the $100 limit would not apply to gifts given to 
employees or officials of municipal entities or obligated persons.\35\ 
In NAMA's view, such persons, for the most part, do not engage in 
``municipal advisory activities'' or ``municipal securities business'' 
as such business is proposed to be defined in amended MSRB Rule G-37, 
on political contributions and prohibitions on municipal securities 
business.
---------------------------------------------------------------------------

    \35\ NAMA stated that the term ``municipal securities 
activities'' is not defined by the proposed rule change, but did not 
provide any explanation of its statement or reason for its 
statement. The term ``municipal securities activities'' is a term 
that is used in existing Rule G-20 and frequently throughout the 
MSRB Rule Book.
---------------------------------------------------------------------------

    The MSRB has determined not to revise proposed amended Rule G-20(c) 
in response to NAMA's concerns. Even if employees or officials of 
municipal entities or obligated persons generally do not engage in 
``municipal advisory activities,'' the MSRB has made clear in existing 
interpretive guidance regarding Rule G-20 that issuer personnel are 
considered to engage in ``municipal securities activities.'' \36\ The 
language of both existing Rule G-20 and proposed amended Rule G-20 
applies to gifts given in relation to this broad term, ``municipal 
securities activities,'' and not the narrower term, ``municipal 
securities business,'' which was developed for the particular purposes 
of MSRB Rule G-37.
---------------------------------------------------------------------------

    \36\ See, e.g., 2007 MSRB Gifts Notice (stating that dealers 
should consider carefully whether payments of expenses they make in 
regard to expenses of issuer personnel, in the course of the bond 
issuance process, comport with Rules G-20 and G-17). The MSRB does 
not suggest that it has relevant regulatory authority over municipal 
entities or obligated persons; rather, the MSRB can appropriately 
regulate the conduct of dealers and municipal advisors in the giving 
of gifts to personnel of municipal entities and obligated persons.
---------------------------------------------------------------------------

    PFM believed that section (c) of proposed amended Rule G-20 would 
not apply to gifts given to elected or appointed issuer officials, 
because the government, in its view, is not their ``employer.'' 
Existing Rule G-20(a), however, which would be retained as proposed 
amended Rule G-20(c), broadly defines ``employer'' to include ``a 
principal for whom the recipient of a payment or service is acting as 
agent or representative.'' \37\ Thus, for purposes of existing and 
proposed amended Rule G-20, elected and appointed officials are 
considered employees of the governmental entity on behalf of which they 
act as agent or representative.
---------------------------------------------------------------------------

    \37\ See, e.g., First Fidelity Securities Group, Exchange Act 
Release No. 36694, Administrative Proceeding File No. 3-8917 (Jan. 
9, 1996) (finding violations of Rule G-20 based on payments to 
financial consultants of issuer, concluding they were ``agent[s] or 
representative[s]'' of issuer within the meaning of the rule). See 
Self-Regulatory Organizations; Order Approving A Proposed Rule 
Change by the Municipal Securities Rulemaking Board Relating to 
Recordkeeping & Record Retention Requirements Concerning Gifts & 
Gratuities, Exchange Act Release No. 34372 (July 13, 1994) (File No. 
SR-MSRB-94-7) (``Rule G-20 is intended to prevent fraud and 
inappropriate influence in the municipal securities market by 
limiting the amount of gifts or gratuities from municipal securities 
dealers to persons not employed by the dealers, including issuer 
officials and employees of other dealers, in relation to municipal 
securities activities.'' (citation omitted)).
---------------------------------------------------------------------------

(ii) Changing the Amount of the $100 Limit
    NAMA and Anonymous submitted comments regarding changing the amount 
of the $100 limit. NAMA proposed that the $100 limit be raised to $250 
per person per year, believing this would strike the appropriate 
balance of allowing reasonable and customary gift giving while also 
limiting conflicts of interest, and would align Rule G-20 with MSRB 
Rule G-37. NAMA stated that, in Rule G-37, the MSRB determined that the 
contribution level of $250 (without the exceptions in Rule G-20) was 
sufficient to address the needs of individuals seeking to give 
political contributions while not allowing those contributions to be so 
excessive as to allow the contributor to gain undue influence. NAMA 
proposed that supplementary material be added to state, in effect, that 
occasional gifts of meals or tickets to theatrical, sporting, and other 
entertainments that are hosted by the regulated entity would be 
presumed to be so extensive as to raise a question of propriety if they 
exceed $250 in any year in conjunction with any gifts provided under 
Rule G-20(c). NAMA asserted that because the purposes of Rule G-20 and 
Rule G-37 are united in their attempt to limit a dealer's or a 
municipal advisor's ability to gain undue influence through the

[[Page 57247]]

giving of gifts or contributions, that the rules should be written 
similarly.
    Anonymous suggested that the MSRB set a $20 or less per gift limit 
and lower the $100 limit to $50 per year to level the playing field 
among all types of municipal advisors and to attain broader 
compatibility with various federal, state and local regulations 
regarding gifts. Anonymous further stated that the effective limit to a 
municipal advisor who also is registered as an investment adviser and 
subject to the requirements of the Investment Advisers Act of 1940 (the 
``Advisers Act'') (a ``municipal advisor/investment adviser''), even in 
the absence of proposed amended G-20 generally would be zero because, 
in its view, a municipal advisor/investment adviser is subject to 
Advisers Act Rule 206(4)-5 (the Advisers Act ``pay to play'' rule) in 
its municipal advisory activities.\38\ Anonymous stated that Rule 
206(4)-5 defines payments as ``any gift, subscription, loan, advance, 
or deposit of money or anything of value,'' and contains no de minimis 
exception.
---------------------------------------------------------------------------

    \38\ 17 CFR 275.206(4)-5.
---------------------------------------------------------------------------

    Rule G-37 is designed to address potential political corruption 
that may result from pay-to-play practices,\39\ and as such, is 
tailored in light constitutional First Amendment concerns. Existing 
Rule G-20, on the other hand, is designed to address commercial bribery 
by minimizing the conflicts of interest that arise when a dealer 
attempts to induce organizations active in the municipal securities 
market to engage in business with such dealers by means of gifts or 
gratuities given to employees of such organizations.\40\ Rules G-37 and 
G-20 thus address substantially different regulatory needs in different 
legal contexts, and the dollar thresholds used in those rules currently 
differ on that basis. The MSRB believes that the mere purported 
alignment with Rule G-37 is an insufficient justification for raising 
the $100 limit.
---------------------------------------------------------------------------

    \39\ Exchange Act Release No. 33868, 59 FR 17621, 17624 (Apr. 
13, 1994) (File No. SR-MSRB-1994-02).
     Pay-to-play practices typically involve a person making a cash 
or in-kind political contribution (or soliciting or coordinating 
with others to make such contributions) in an attempt to influence 
the selection of the contributor to engage in municipal securities 
activities or municipal advisory activities.
    \40\ See supra n.5.
---------------------------------------------------------------------------

    Further, the parallel that Anonymous draws between proposed amended 
Rule G-20 and the SEC's regulation of political contributions by 
certain investment advisors under Advisers Act Rule 206(4)-5 fails to 
account for the difference in the scope of each regulation. 
Specifically, Anonymous' interpretation of the regulations fails to 
recognize the much broader application of proposed amended Rule G-20. 
Proposed amended Rule G-20 would apply to any gifts given in relation 
to any of the municipal securities or municipal advisory activities of 
the recipient's employer. Advisers Act Rule 206(4)-5, on the other 
hand, is much narrower in application--it restricts only payments for a 
solicitation of a government entity for investment advisory 
services.\41\ Also, proposed amended Rule G-20 would explicitly apply 
to gifts given to many regulated persons (e.g., associated persons of 
dealers and municipal advisors). By contrast, the complete prohibition 
Anonymous cites from Advisers Act Rule 206(4)-5 does not apply to 
payments to defined regulated persons. While it may be appropriate to 
limit payment for a solicitation to zero unless certain conditions are 
met, this is not a sufficient rationale to reduce the $100 limit for 
gifts in proposed amended Rule G-20(c). Adopting Anonymous' 
recommendation would likely result in an overly and unnecessarily 
restrictive prohibition that would not allow for appropriate social 
interactions between regulated entities and their prospective and/or 
actual business associates. The MSRB, at this time, has determined not 
to decrease the $100 limit for gifts set forth in proposed amended Rule 
G-20(c).
---------------------------------------------------------------------------

    \41\ 17 CFR 275.206(4)-5.
---------------------------------------------------------------------------

B. Gifts Not Subject to the $100 Limit
(i) ``Normal Business Dealings''
    NAMA expressed concern that proposed amended Rule G-20(d), which 
sets forth the exclusions from the $100 limit, leaves open 
opportunities for abuse particularly because the associated books and 
records requirement does not require the maintenance of records of 
excluded gifts. NAMA expressed concern in particular regarding proposed 
subsection (d)(i), which would, under certain circumstances, exclude 
from the $100 limit the giving of occasional meals or tickets to 
theatrical, sporting or entertainment events. In NAMA's view, regulated 
entities would be able to engage in otherwise impermissible gift giving 
under the guise of ``normal business dealings,'' and such gift giving 
likely would result in the improper influence that Rule G-20 was 
designed to curtail. NAMA suggested modifying the amended rule to 
impose an aggregate limit of $250 on all gifts given as part of 
``normal business dealings,'' believing the aggregate limit would be 
consistent with the dollar threshold used in MSRB Rule G-37.
    The MSRB, like NAMA, is concerned that the exclusions from the $100 
limit not be abused. For this reason, proposed amended Rule G-20 would 
place important conditions on the several types of excluded gifts, 
including those in the category of ``normal business dealings.'' All of 
the gifts described in proposed section (d) would be excluded only if 
they do not ``give rise to any apparent or actual material conflict of 
interest,'' and, under proposed section (d)(i), ``normal business 
dealing'' gifts would be excluded only if they are not ``so frequent or 
so extensive as to raise any question of propriety.'' Moreover, dealers 
and municipal advisors are subject to the fundamental fair-dealing 
obligations of MSRB Rule G-17. Rule G-17 likely addresses at least some 
of the concerns raised by NAMA by prohibiting regulated entities from 
characterizing excessive or lavish expenses for the personal benefit of 
issuer personnel as an expense of the issue, as such behavior could 
possibly constitute a deceptive, dishonest or unfair practice.\42\ The 
MSRB has determined at this juncture not to further revise proposed 
amended Rule G-20 because the MSRB believes the proposed rule change 
adequately addresses the concerns raised by NAMA relating to excluded 
gifts generally and ``normal business dealings'' in particular.
---------------------------------------------------------------------------

    \42\ See 2007 MSRB Gifts Notice (stating that a dealer should be 
aware that characterizing excessive or lavish expenses for the 
personal benefit of issuer personnel as an expense of the issue, 
may, depending on all the facts and circumstances, constitute a 
deceptive, dishonest, or unfair practice in violation of Rule G-17).
---------------------------------------------------------------------------

(ii) Nominal Value Standard for Promotional Gifts
    ICI expressed concern regarding proposed amended Rule G-20(d)(iv), 
which provides that promotional gifts generally would not be subject to 
the $100 limit if such gifts are of nominal value, i.e., 
``substantially below the general $100 limit.'' ICI stated that this 
standard is too vague, would be difficult to comply with, and that the 
resulting ambiguity would permit the MSRB to second guess a regulated 
entity's good faith effort to comply with the rule. ICI stated that 
deleting the phrase would better align Rule G-20 with FINRA's 
comparable non-cash compensation rule for investment company 
securities, and would facilitate registrants' compliance with such 
rules.
    Since 2007, the MSRB has used the ``substantially below the general 
$100 limit'' standard by way of its

[[Page 57248]]

interpretive guidance, which incorporates FINRA guidance to the same 
effect under the FINRA gift and non-cash compensation rules.\43\ The 
MSRB believes that it is appropriate at this time to retain this 
standard for determining whether a promotional gift is of nominal value 
because, among other reasons, the current standard is harmonized with 
more analogous FINRA regulation, ICI's concern about consequences from 
perceived vagueness is speculative, and a bright-line limit could 
distort behavior resulting in increased gift giving at or near any 
bright-line limit.
---------------------------------------------------------------------------

    \43\ FINRA Rules 3220 and 2320; NASD Rule 2820.
---------------------------------------------------------------------------

(iii) Gifts of Promotional Items and ``Other Business Logos''
    ICI requested clarification regarding the application of proposed 
amended Rule G-20 to promotional gifts that display the brand or logo 
of the product for which the regulated entity is acting as a 
distributor, such as a 529 college savings plan, and not the brand or 
logo of the regulated entity itself. ICI stated its belief that Rule G-
20 would not appear to be triggered when a regulated entity utilizes 
promotional gifts that display the logo of a client or product of a 
regulated entity, such as a logo for a 529 college savings plan, 
because such gifts do not promote that regulated entity's brand or 
logo. ICI recommended that the MSRB clarify that proposed amended Rule 
G-20(c) does not apply at all in such instances, and that the regulated 
entity therefore need not rely on an exclusion for the giving of such 
promotional gifts.
    The restrictions of proposed Rule G-20 are not, as suggested by 
ICI, triggered because a gift given by a regulated entity or its 
associated person promotes that regulated entity's brand or logo. 
Rather, proposed amended Rule G-20 has potential application to the 
giving of ``any thing or service of value'' in relation to the 
recipient's employer's municipal securities or municipal advisory 
activities (emphasis added). The proposed amended rule provides for 
exclusions of certain gifts, including the exclusion for promotional 
gifts ``displaying the regulated entity's corporate or other business 
logo.'' As such, if the gift items described by ICI meet all of the 
requirements to qualify for an exclusion as described in proposed 
section (d) and proposed subsection (d)(iv), then the restrictions of 
proposed amended Rule G-20(c) would not apply. Proposed paragraph .03 
to the Supplementary Material would provide this guidance regarding 
promotional gifts, and due to the apparent misapprehension of the scope 
of the rule in the commentary, would clarify that such gifts are 
potentially subject to the $100 limit of proposed amended section (c).
C. Incorporation of Applicable FINRA Interpretive Guidance
    NAMA commented that the MSRB should codify all applicable FINRA 
guidance on gifts and gratuities into the rule language of Rule G-20. 
NAMA noted that many municipal advisors are not FINRA members and 
stated that regulated entities (particularly non-FINRA members) should 
not be expected to review FINRA interpretive guidance to fully 
understand their obligations under Rule G-20.
    The MSRB generally agrees with NAMA. In addition, the MSRB 
recognizes that some municipal advisors may be establishing compliance 
programs to comply with MSRB rules for the first time. The MSRB further 
believes that it will be more efficient for all regulated entities and 
regulatory enforcement agencies if additional applicable FINRA 
interpretive guidance is codified in proposed amended Rule G-20. As 
such, the MSRB has distilled and included in proposed amended Rule G-20 
the substance of additional portions of the interpretive guidance 
contained in NASD Notice to Members 06-69 addressing the valuation and 
aggregation of gifts. As previously noted, proposed paragraph .01 of 
the Supplementary Material would state that a gift's value should be 
determined by regulated entities generally according to the higher of 
cost or market value. Proposed paragraph .02 of the Supplementary 
Material would state that regulated entities must aggregate all gifts 
that are subject to the $100 limit given by the regulated entity and 
each associated person of the regulated entity to a particular 
recipient over the course of a year.
D. Alignment With FINRA Rules
    ICI commented that it is supportive of the MSRB's rulemaking effort 
to align, when appropriate, MSRB rules with congruent FINRA rules, and 
that the comments ICI submitted were intended to foster additional 
alignment with FINRA rules. In particular, ICI stated that the MSRB 
should consider how it might better align Rule G-20 with FINRA's 
comparable rules, including NASD Rule 2830(l)(5) since that rule was 
not addressed in the MSRB's Request for Comment. In addition, ICI 
suggested that the MSRB should monitor FINRA's retrospective review 
relating to gifts, gratuities and non-cash compensation and consider 
making conforming amendments to its rules to keep in line with any 
amendments that FINRA might adopt.
    As part of the MSRB's rulemaking process, the MSRB considers the 
appropriateness and implications of harmonization between MSRB and 
FINRA rules that address similar subject matters. The MSRB believes 
that such harmonization, when practicable, can facilitate compliance 
and reduce the cost of compliance for regulated entities.
    As discussed above, the MSRB has consolidated and proposed to 
codify a significant portion of FINRA's interpretive guidance set forth 
in NASD Notice to Members 06-69 on gifts and gratuities in proposed 
amended Rule G-20. In addition, portions of proposed amended Rule G-20 
and existing Rule G-20 are substantially similar to other applicable 
NASD and FINRA rules, including NASD Rule 2830(l)(5), Investment 
Company Securities, and FINRA Rule 2320(g)(4), Variable Contracts of an 
Insurance Company. With regard to FINRA's retrospective review of its 
gifts, gratuities and non-cash compensation rules, the MSRB has 
monitored from the beginning of this rulemaking initiative, and 
continues to monitor, FINRA's activities in this area, and may consider 
further potential harmonization if FINRA proposes or adopts any 
amendments to its relevant rules.
E. Entertainment Expenses and Bond Proceeds
(i) Definition of Entertainment Expenses
    BDA, NAMA, SIFMA, and Anonymous requested clarification regarding 
the expenses that would be subject to the prohibition in proposed 
amended Rule G-20(e). BDA requested that the MSRB clarify 
``entertainment expenses'' versus expenses for ``normal and necessary 
meals'' and ``normal travel costs.'' BDA also suggested that the MSRB 
treat a regulated entity's meals with clients that are generally part 
of travel separately from items like tickets to sporting or theatrical 
events, which BDA believed was clearly entertainment. BDA requested 
that, if the MSRB were to not amend proposed amended Rule G-20(e) 
itself, that the MSRB should provide interpretive guidance to clarify 
the issue.
    NAMA commented that the entertainment expense reimbursement 
prohibition was appropriate and suitably tailored. Nevertheless, NAMA 
believed that it would be clearer if entertainment expenses were 
defined as ``necessary expenses for meals that comply with the expense 
guidelines of the municipal entity for their personnel

[[Page 57249]]

(any amounts in excess would not be reimbursable and subject to 
limitation).''
    SIFMA commented that ``entertainment expenses'' should not include 
expenses ``reasonably related to a legitimate business purpose.'' SIFMA 
stated that such a revision to the draft rule language would improve 
the clarity of the rule and would aid in compliance with the rule. 
Further, SIFMA suggested that the entertainment expense provision might 
be clearer if the provision stated that meals that are ``a fair and 
reasonable amount, indexed to inflation, such as not to exceed $100 per 
person'' are not, for purposes of the provision, entertainment expenses 
and therefore not subject to the prohibition.
    Anonymous suggested that the MSRB modify proposed section (e) to 
clarify that the prohibition is not intended to unnecessarily restrict 
how a regulated entity may appropriately use the fees it earns from its 
clients when the fees are paid from the proceeds of an offering of 
municipal securities.
    After careful consideration of these comments, the MSRB has 
included a clarification in the proposed entertainment expense 
provision to conform proposed amended Rule G-20(e) to a standard used 
in tax law for analogous purposes. That tax law standard is used to 
identify a legitimate connection to business activity and avoid excess 
expenses in relation to that activity. The modification replaces the 
phrase ``reasonable and necessary expenses for meals'' with ``ordinary 
and reasonable expenses for meals'' (emphasis added) hosted by the 
regulated entity and directly related to the offering for which the 
regulated entity was retained. Beyond this modification, the MSRB 
believes that the proposed entertainment expense provision, including 
with respect to its scope, is sufficiently clear. The MSRB believes 
that the inclusion of a discrete dollar limit or other more 
prescriptive language as suggested by some commenters would result in 
an overly inflexible rule. Further, the MSRB believes that making the 
scope of the prohibition turn on the existence and parameters of client 
entertainment and gift policies, as suggested by NAMA, would result in 
a lack of uniformity and potential confusion among market participants.
(ii) Other Comments Regarding Entertainment Expenses and Bond Proceeds
    SIFMA stated that it agreed with the intent of the prohibition of 
seeking or obtaining reimbursement for entertainment expenses from the 
proceeds of an issuance of municipal securities. Nonetheless, SIFMA 
commented that it was concerned: (i) About the ``function and 
interpretation of the prohibition;'' (ii) that the entertainment 
expense provision would prohibit a practice which is currently not 
prohibited by MSRB rules; \44\ (iii) that regulated entities should be 
able to accommodate clients that would like entertainment expenses to 
be paid for and reimbursed to the dealer out of the proceeds of the 
offering; \45\ and (iv) that the provision augurs ``federal regulatory 
creep'' over state and local issuers, which would ``become another area 
where regulators will hold dealers responsible indirectly for state and 
local issuer behavior that they cannot regulate directly.'' Anonymous 
stated that it believed the entertainment prohibition provision would 
prohibit an investment adviser registered under the Advisers Act 
(``RIA'') employed by firms that also employ municipal advisors from 
obtaining reimbursement for appropriate business expenses (such as an 
RIA taking a commercial client of their investment advisory business 
out to lunch to discuss business) because it construed the firm's funds 
(which were earned municipal advisory fees paid to the firm from bond 
proceeds) as retaining their character as ``bond proceeds.''
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    \44\ SIFMA stated that it understood that such practices may be 
permitted or prohibited depending on state or local laws.
    \45\ The MSRB believes that SIFMA's recommendation would 
circumvent the purpose of the proposed entertainment expense 
provision because it would allow dealers to seek or obtain 
reimbursement for entertainment expenses from an issuer by including 
such expenses in the underwriter's discount. The MSRB believes that 
SIFMA's suggested change would be contrary to the intent of the 
proposed entertainment expense provision.
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    Proposed amended Rule G-20(e) would address a concern of the MSRB 
that reimbursement of certain expenses from bond proceeds may violate 
MSRB rules, including Rules G-20 and G-17.\46\ The MSRB has provided 
guidance that obtaining reimbursement for expenses from bond proceeds, 
even ``if thought to be a common industry practice'' may raise a 
question under applicable MSRB rules depending on ``the character, 
nature and extent of expenses paid by dealers or reimbursed as an 
expense of the issue.'' \47\ The MSRB believes that proposed amended 
Rule G-20(e) will promote just and equitable principles of trade.
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    \46\ See supra n. 21.
    \47\ Id.
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    Further, the proposed reimbursement prohibition is explicitly 
limited in its application to the conduct of dealers and municipal 
advisors. It would not prohibit a municipal entity from using bond 
proceeds to pay for entertainment costs, though other laws or 
regulations outside of MSRB rules may apply. The proposed prohibition 
also would not preclude dealers and municipal advisors from providing 
business entertainment--i.e., items or services of value--that is 
within the scope of ``normal business dealing,'' which would include, 
for example, meals or tickets to theatrical, sporting or other 
entertainments, subject to the conditions of proposed amended Rule G-
20(d)(i) (the provision on normal business dealings).
    Accordingly, the MSRB has determined not to revise proposed amended 
Rule G-20, at this time, in response to the comments from SIFMA or 
Anonymous relating to the entertainment expense reimbursement 
prohibition.
F. Application of Non-Cash Compensation Provisions to Municipal 
Advisors
    In response to the Request for Comment, NAMA commented that the 
provisions of draft amended section (g), which would have extended the 
non-cash compensation provisions in connection with primary offerings 
that currently apply to dealers to municipal advisors and their 
associated persons, appeared to be inapplicable to non-dealer municipal 
advisors. Anonymous supported the extension of such provisions to 
municipal advisors.
    After carefully considering the comments, the MSRB believes, at 
this juncture, that extending the requirements of proposed section (g) 
to a municipal advisor and any associated person thereof is not 
necessary. However, the MSRB intends to monitor the activities of 
municipal advisors in relation to its rules, and may revisit this 
matter at a future date.
G. Potential Regulatory Alternatives
    Anonymous suggested that the MSRB consider two alternatives to 
proposed amended Rule G-20. According to Anonymous, to ensure that 
municipal advisors/investment advisers are not unduly disadvantaged by 
the ability of non-RIAs to give gifts, the MSRB should incorporate 
Advisers Act Rule 206(4)-5 into Rule G-20 and clarify that Rule 206(4)-
5 also applies to municipal advisory activities of any MSRB-regulated 
entity. Anonymous believed that because Rule 206(4)-5 already applies 
to municipal advisors/investment advisers, the incorporation of that 
rule into Rule G-20 would reduce duplicative rulemaking and would 
increase regulatory certainty.

[[Page 57250]]

Alternatively, Anonymous suggested that the MSRB recommend to the SEC 
that it adjust Rule 206(4)-5 to be more compatible with proposed 
amended Rule G-20 as to the municipal advisory activities of municipal 
advisors/investment advisers.
    The MSRB believes that Anonymous's concerns are addressed by other 
MSRB rules or rule provisions that the MSRB has already proposed. 
Advisers Act Rule 206(4)-5 prohibits an investment adviser from 
providing or agreeing to provide, directly or indirectly, payments to 
solicit a government entity for investment advisory services unless 
such person is a defined regulated person. MSRB Rule G-38, solicitation 
of municipal securities business, flatly prohibits a dealer, directly 
or indirectly, from paying any person who is not an affiliated person 
of the dealer for a solicitation of municipal securities business on 
behalf of such dealer. In addition, proposed MSRB Rule G-42, on duties 
of non-solicitor advisors, currently pending with the SEC for approval 
or disapproval, would generally prohibit payments for solicitations 
with certain limited exceptions that would include allowing payments 
that constitute ``normal business dealings'' as defined in Rule G-20, 
reasonable fees paid to another registered municipal adviser, and 
payments to an affiliate. The MSRB therefore believes that it is 
unnecessary to incorporate Advisers Act Rule 206(4)-5 into Rule G-20 to 
address Anonymous's concerns.
H. Recordkeeping Requirements
(i) Recordkeeping for Certain Gifts Not Subject to $100 Limit
    NAMA commented that a regulated entity should be required to 
maintain records for gifts that are subject to either the normal 
business dealing exclusion under proposed amended Rule G-20(d)(i) or 
the personal gift exclusion under proposed amended Rule G-20(d)(vi). 
NAMA noted that gifts that constitute normal business dealings within 
proposed amended Rule G-20(d)(i) require recordkeeping to comply with 
certain requirements of the Internal Revenue Service and of various 
municipalities, such as in California. Therefore, according to NAMA, 
imposing a recordkeeping requirement would not be an entirely new 
burden, would provide protection against pay-to-play activities and 
would provide a means to determine whether such gifts give rise to 
questions of impropriety or conflicts of interest. NAMA also commented 
that, to afford meaningful enforcement, the MSRB should require a 
regulated entity to keep records of any personal gifts given pursuant 
to proposed amended Rule G-20(d)(iv) that were paid for, directly or 
indirectly, by the regulated entity.
    After carefully considering the comments, the MSRB continues to 
believe that the recordkeeping requirements of Rule G-8(h) that relate 
to Rule G-20 should be limited to items that are subject to the $100 
limit. The MSRB believes this approach to recordkeeping under Rule G-20 
will continue to harmonize with existing FINRA recordkeeping 
requirements for dealers. Moreover, significant safeguards that are 
provided by other MSRB rules, including Rules G-27, G-44, and G-17, 
weigh against imposing the additional recordkeeping burdens on 
regulated entities suggested by NAMA. As the MSRB reminded dealers in 
its 2007 MSRB Gifts Notice on Rule G-20, dealers are required to have 
supervisory policies and procedures in place under Rule G-27 that are 
reasonably designed to prevent and detect violations of Rule G-20 (and 
of other applicable securities laws).\48\ Recently adopted Rule G-44, 
on supervision and compliance obligations of municipal advisors, 
imposes similar supervisory requirements on municipal advisors. 
Further, and also as the MSRB reminded dealers in 2007 in particular 
contexts, the making of payments that might not otherwise be subject to 
Rule G-20 could constitute separate violations of Rule G-17, which 
currently applies to municipal advisors and dealers.\49\
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    \48\ 2007 MSRB Gifts Notice.
    \49\ Id.
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(ii) Recordkeeping of Services Agreements
    PFM objected to the draft amendment to Rule G-8(h)(ii)(B) that 
would require municipal advisors to keep all agreements referred to in 
draft amended G-20(f), on compensation for services. PFM stated that 
this requirement would be a substantial and unjustified burden on 
municipal advisors due to the large number of transactions for which, 
it believed, they would need to maintain records. Furthermore, PFM 
believed that the MSRB does not have statutory authority to require 
recordkeeping of contracts for services of a non-securities related 
nature and stated that it believed that Rule G-8(h)(ii)(B) would 
require such recordkeeping. PFM suggested that draft amended Rule G-
8(h)(ii)(B) be revised to limit the required agreements to those 
``relied upon by the registrant pursuant to Rule G-20(c)'' rather than 
those ``referred to in Rule G-20(f).'' FCS requested clarification as 
to whether Rule G-8(h)(ii)(B) would require a municipal advisor to keep 
a record of every contract the municipal advisor enters into ``for 
municipal advisory services whether or not any gifts [were] given.''
    The comments from PFM and FCS appear to be predicated on a 
misunderstanding of the types of agreements that are referred to in 
proposed section (f). The proposed section provides that the $100 limit 
does not apply to compensation for services that are rendered pursuant 
to a prior written agreement meeting certain content requirements. 
Thus, the agreements referred to in proposed section (f) are those 
under which compensation would otherwise be subject to the $100 limit 
(i.e., compensation in relation to the municipal securities or 
municipal advisory activities of the employer of the recipient). As 
such, agreements of a non-securities related nature, about which PFM 
expressed concern, would not be required to be kept by proposed amended 
Rule G-8(h)(ii)(B).
(iii) Recordkeeping by Registered Investment Advisers
    Anonymous commented that it believed that while the draft 
recordkeeping requirements were relevant, such requirements were 
unnecessary for municipal advisors/investment advisers because, 
according to Anonymous, RIAs are required to keep such records under 
the Advisers Act Rule 206(4)-3.\50\ Anonymous suggested that the MSRB 
consider exempting municipal advisors/investment advisers from the 
recordkeeping requirements associated with Rule G-20.
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    \50\ 17 CFR 275.206(4)-3.
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    To help ensure a level playing field as well as to enhance 
compliance and enforcement, the MSRB believes that all regulated 
entities, including municipal advisors/investment advisers, should be 
subject to substantially identical recordkeeping requirements 
associated with Rule G-20. Therefore, regardless of whether a regulated 
entity also may be subject to a comparable requirement under other 
federal securities laws, that regulated entity would be required to 
comply with Rule G-20's associated recordkeeping requirements.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period of

[[Page 57251]]

up to 90 days (i) as the Commission may designate if it finds such 
longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (A) by order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MSRB-2015-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549.

All submissions should refer to File Number SR-MSRB-2015-09. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the MSRB. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-MSRB-2015-09 and should be 
submitted on or before October 13, 2015.
    For the Commission, pursuant to delegated authority.\51\
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    \51\ 17 CFR 200.30-3(a)(12).

Brent J. Fields,
Secretary.
[FR Doc. 2015-23975 Filed 9-21-15; 8:45 am]
BILLING CODE 8011-01P