MSRB Links Effective Date for Best-Execution
Rule to Publication of Guidance
Date: September 3, 2015
Contact: Jennifer A. Galloway, Chief Communications Officer
(703) 797-6600
jgalloway@msrb.org
MSRB LINKS EFFECTIVE DATE FOR BEST-EXECUTION RULE TO PUBLICATION OF GUIDANCE
Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) announced today it is linking the effective date
of its new “best-execution” rule for retail investor transactions to the publication of implementation guidance so that
municipal securities dealers will have sufficient time to review the forthcoming guidance. The MSRB filed documents
with the Securities and Exchange Commission (SEC) to establish the effective date of the new rule four months from
the publication date of the MSRB’s implementation guidance. MSRB Rule G-18, on best execution, with related
amendments to MSRB Rules G-48 and D-15, requires dealers to seek the most favorable terms reasonably available
for their retail customers’ transactions.
The MSRB is coordinating with the SEC and the Financial Industry Regulatory Authority (FINRA) to achieve
substantive consistency, as appropriate, in the guidance on best execution for the municipal and corporate bond
markets, with the goal of promoting regulatory efficiency across the fixed income markets. Linking the effective date of
the best-execution rule to the publication of the guidance will establish a clear implementation period and ensure that
dealers have adequate time to review and make use of the guidance as they continue to prepare to comply with the
new rule. The MSRB will announce the specific effective date of the rule upon publication of the implementation
guidance.
“The MSRB is continuing to coordinate with the SEC and FINRA with the goal of publishing best-ex implementation
guidance in short order,” said MSRB Executive Director Lynnette Kelly. “Facilitating dealers’ compliance with their new
obligations and ensuring that retail investors consistently receive the benefit of fair handling of their orders to buy or
sell municipal securities is a top priority for the MSRB.”
The MSRB’s adoption of the best-execution rule—a key investor protection provision—supports existing MSRB fairpricing rules, promotes fair competition among dealers and aligns with a recommendation in the SEC’s 2012 Report
on the Municipal Securities Market. The SEC report also recommended that the MSRB provide guidance on how bestexecution concepts would be applied to municipal securities transactions.
The MSRB protects investors, state and local governments and other municipal entities, and the public interest by
promoting a fair and efficient municipal securities market. The MSRB fulfills this mission by regulating the municipal
securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. To further
protect market participants, the MSRB provides market transparency through its Electronic Municipal Market Access
(EMMA®) website, the official repository for information on all municipal bonds. The MSRB also serves as an objective
resource on the municipal market, conducts extensive education and outreach to market stakeholders, and provides
market leadership on key issues. The MSRB is a Congressionally-chartered, self-regulatory organization governed by
a 21-member board of directors that has a majority of public members, in addition to representatives of regulated
entities. The MSRB is subject to oversight by the Securities and Exchange Commission.