Glossary of Municipal Securities Terms

Introduction

The Municipal Securities Rulemaking Board was established by Congress in 1975 to develop rules governing the conduct of securities firms and banks involved in underwriting, trading and selling municipal securities. The Board, which is composed of members of the municipal securities industry and the public, is a self-regulatory body which sets standards for the industry-rules based on the expertise of industry members.

The Board is authorized by Congress to promulgate rules designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling and processing information with respect to, and facilitating transactions in municipal securities, to remove impediments to and perfect the mechanism of a free and open market in municipal securities, and, in general, to protect investors and the public interest.

In response to this and other aspects of its rulemaking mandate, the Board has adopted rules concerning:

	•	standards of professional qualification,
	•	rules of fair practice,
	•	recordkeeping,
	•	the scope and frequency of compliance examinations,
	•	the nature of securities quotations,
	•	the sale of new issue municipal securities, and
	•	the distribution of disclosure documents on new issues of municipal securities.

The Board has also adopted a code of procedure for the arbitration of disputes among industry members and between industry members and customers.

Responsibility for enforcement of the Board's rules is delegated to the Securities and Exchange Commission, the National Association of Securities Dealers, the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation, with each organization having enforcement responsibility for those industry members subject to its jurisdiction.

Further information about the Board can be obtained by calling or writing Municipal Securities Rulemaking Board, Suite 800, 1818 N Street, N.W., Washington, D.C. 20036-2491, telephone (202) 223-9347.

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