The Municipal Securities Rulemaking Board
Paul S. Maco Partner Vinson & Elkins LLP
Jennifer Webster Taffe Associate Vinson & Elkins LLP
he Municipal Securities Rulemaking Board (MSRB) was established in 1975 pursuant to a Congressional directive contained in the Securities Act Amendments of 1975 (the 1975 Amendments).376
Prior to that time, the municipal securities market was substantially unregulated. The Securities Act of 1933 (the Securities Act) and the Securities Exchange Act of 1934 (the Exchange Act) governed the regulation of the corporate securities markets but generally contained exemptions for municipal securities for reasons that included the local nature of markets, a perceived absence of abusive practices, the predominance of institutional investors, and federal-state comity. Both securities acts, however, contain general prohibitions against fraud.377
These antifraud provisions prohibit fraudulent or deceptive practices in the offer and sale of all securities, including municipal securities, regardless of whether the securities are required to be registered with the Securities and Exchange Commission (SEC) under the Securities Act. Antifraud provisions served as the basis for regulation of the municipal market until market abuses prompted the addition of statutory provisions regulating municipal securities dealers in 1975.
Note: This chapter is intended for educational and informational purposes only and does not constitute legal advice or services. ...