Municipal Securities Rulemaking Board

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EXHIBIT 2c

March 16, 2026

Ronald W. Smith

Corporate Secretary

Municipal Securities Rulemaking Board

1300 I Street, NW

Washington, DC 20005.

Re: Request for Comment on Draft Amendments to MSRB Rule G-27, Dealer

Supervision (MSRB Notice 2026-01)

Dear Mr. Smith,

The American Securities Association1 (ASA) appreciates the opportunity to comment on the

Municipal Securities Rulemaking Board’s (MSRB) request for comment on amendments to Rule

G-27 (Dealer Supervision). The ASA represents Main Street broker-dealers that serve retail

investors, municipalities, and other local institutions across the country. Our members support the

MSRB’s retrospective rule review and efforts to modernize Rule G-27 in light of current business

practices.

I. Support for Proposal and Structuring Clarification

ASA supports the MSRB’s proposal to clarify “structuring of public offerings or private

placements” in the definition of an office of municipal supervisory jurisdiction (OMSJ). This

clarification should reduce uncertainty about which public finance activities trigger OMSJ

designation.

We request confirmation that the following support activities, standing alone, do not require

OMSJ designation: preliminary data analysis and modeling; drafting presentations and materials

for issuer meetings; routine data gathering and document coordination; and running standard

debt capacity or sensitivity analyses using established firm models controlled by senior

personnel.

II. Modernizing Supervision for Hybrid Work Environments

ASA urges the MSRB to modernize Rule G-27 so that supervision is not anchored primarily to

physical locations. Firms now use technology-enabled tools—trade surveillance systems,

1 ASA is a trade association that represents the retail and institutional capital markets interests of regional financial services firms

who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth.

ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and

competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases

prosperity. ASA has a geographically diverse membership base that spans the Heartland, Southwest, Southeast, Atlantic, and

Pacific Northwest regions of the United States.

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electronic communications monitoring, workflow approvals, and video collaboration—to

supervise activities regardless of where personnel are physically located.

A.

One-Person Offices. The current framework creates unnecessary compliance

burdens by requiring OMSJ designation (and principal licenses) for one-person offices engaged

in underwriting, trading, or public finance activities. An individual cannot supervise themselves

yet must hold supervisory credentials merely to satisfy location-based registration requirements.

These offices typically operate under centralized oversight, including commitment committee

review, automated surveillance, and multilayered approval workflows that provide effective

supervision regardless of physical location.

B. ASA recommends that the MSRB:

• Acknowledge technology-enabled, virtual supervision within Rule G-27 or its

supplementary material;

• Clarify that effective supervision may be achieved through centralized electronic

controls rather than on-site presence;

• Tie OMSJ designation to actual supervisory responsibility, not office headcount or

activity type; and

• Create a carve-out for one-person offices engaged solely in trading or production

activities where the individual has no supervisory responsibilities.

III. Branch Office Framework and 60-Business-Day Extension

ASA supports extending the exclusion for non-primary residential locations from 30 to 60

business days. This change better aligns with hybrid work patterns and eases administrative

tracking of occasional remote work. We encourage the MSRB to consider additional flexibility

tied to supervisory risk rather than fixed day counts, and to explicitly recognize that firms may

rely on centralized electronic surveillance to manage remote work.

IV. Coordination with FINRA on Remote Supervision

ASA encourages close coordination with FINRA on office definitions, residential supervisory

locations, and remote inspections to avoid duplicative frameworks. Firms participating in

FINRA’s Remote Inspections Pilot Program report that remote inspections, when paired with risk

assessments and clear written procedures, have enabled more frequent, targeted reviews focused

on higher-risk activities while materially reducing travel costs. Remote access to electronic

records, exception reports, and digital workpapers often produces a more complete picture of

activity than traditional on-site inspections.

We encourage the MSRB to allow remote inspections under Rule G-27 where a firm’s risk

assessment, technology, and written procedures support this approach, and to ensure municipal

supervisory expectations remain aligned with FINRA’s evolving framework.

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V. Trading and Remote Work

As part of its supervisory review, ASA encourages the MSRB to confirm that traders and

market-makers need not be located in an OMSJ solely due to their activity type when appropriate

systems and controls are in place. Traders in remote locations operate under strict desk limits,

real-time electronic monitoring, multilayered trade approvals, and exception reporting systems.

Transaction-based oversight through centralized surveillance provides more effective supervision

than location-centric designations.

We emphasize that location-based supervisory frameworks are increasingly misaligned with

institutional municipal securities activities performed across varied locations. Transaction-based

oversight—through automated surveillance, workflow approvals, and committee reviews—

provides more effective supervision than physical presence requirements.

ASA recommends a principles-based framework recognizing that:

• Supervisory licenses should be tied to supervisory responsibility, not office designation or

physical presence

• Firms’ existing multilayered supervisory systems—including desk oversight,

commitment committees, and electronic monitoring—constitute effective supervision

regardless of personnel location

• One-person offices should not require principal licenses absent actual supervisory

responsibilities

VI. Implementation

ASA recommends a 12- to 18-month implementation period after SEC approval to allow firms to

update policies, procedures, location designations, and surveillance tools. A phased or risk-based

implementation would be particularly helpful for smaller and mid-sized Main Street firms with

limited compliance staff.

VII. Conclusion

ASA appreciates the MSRB’s efforts here and we encourage the MSRB to continue its

retrospective review with a focus on risk-based, technology-neutral supervision that eliminates

redundant location-based requirements and works effectively for hybrid work environments.

Sincerely,

Jessica Giroux

Jessica R. Giroux

Chief Legal Officer

American Securities Association

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601 Pennsylvania Ave NW

South Building Suite 900

Washington, DC 20004

www.bdamerica.org

Ronald W. Smith

Corporate Secretary

Municipal Securities Rulemaking Board

1300 I Street NW

Washington DC 20005

Transmitted via Web site

March 16, 2026

Dear Mr. Smith,

The Bond Dealers of America welcomes the opportunity to provide comments on MSRB Notice

26-01, “Request for Comment on MSRB Rule G-27 on Dealer Supervision” (the “Proposal”). BDA

is the only DC-based group exclusively representing the interests of securities dealers and banks

focused on the US fixed income markets.

The Proposal seeks to provide a definition for “structuring of public offerings or private

placements” in the context of Rule G-27 and proposes to increase the 30-business-day

exception from branch office registration for locations other than primary residences. BDA

generally supports both proposals with additional recommendations. In addition, we urge the

Board to consider additional amendments to Rule G-27 to provide more flexibility to supervise

all categories of employees remotely, including traders.

As the industry has demonstrated for the last six years since the first pandemic lockdowns, it is

possible to effectively supervise employees remotely, and MSRB rules should reflect this reality

in general. Rule G-27 requires each MSRB dealer to “establish and maintain a system to

supervise the municipal securities activities of each registered representative, registered

principal, and other associated person that is reasonably designed to achieve compliance with

applicable securities laws and regulations, and with applicable Board rules.”

Rule G-27 is largely location-based. The Rule specifies generally that certain outward-facing

activities a municipal securities firm engages in, such as order execution or market making or

structuring of public offerings or private placements, among others, must be conducted in an

office of municipal supervisory jurisdiction (OMSJ) or a branch office. OMSJs and branch offices

must be designated, registered and have a properly licensed on-site principal.

In 2023 the SEC approved amendments to Rule G-27 that allow a firm to designate certain

primary residences as Residential Supervisory Locations (RSL) where certain supervisory

activities may take place without the location being designated as a branch office or OMSJ. The

Board also initiated a 3-year remote inspection pilot program for RSLs. Notably, two key

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activities are not permitted to be conducted in a RSL and must be conducted on an OMSJ: order

execution or market making and structuring of public offerings or private placements

(“Structuring”).

The MSRB’s location-based supervision model is antiquated and obsolete. Principals no longer

supervise their employees through physical proximity. They use technology which is not

location-dependent whatsoever. The idea that certain activities can only be performed in

certain offices with certain designations is not consistent with how modern broker-dealers are

managed and operated. We welcome the Board’s openness to addressing these issues.

Structuring of public offerings or private placements

Rule G-27 does not currently define Structuring. Various BDA member firms have interpreted

that provision differently, and the confusion has led to a lack of consistency in how this element

of Rule G-27 is complied with. That is why we welcome the Board’s proposed definition of

Structuring to provide clarity and consistency around the issue.

The Proposal would clarify that structuring is “final approval of any bespoke recommendation,

commitment of dealer capital or other formal action with respect to a public offering or private

placement conducted by the dealer.” It would explicitly exclude from the definition “debt

modeling, financial analysis, number running and solicitation of issuers or obligated persons for

the dealer’s investment banking services in connection with municipal securities.”

We generally agree with the proposed clarification. We point out that every firm is different

with respect to internal processes that lead to final approval. In some cases an internal

committee makes the final decision to approve a transaction. In some cases it may be an

investment banking lead banker, supervisor, or underwriter. As is typical with respect to

compliance implementation, we expect each firm will include in their written supervisory

procedures their own specific process around final approval. We urge the Board to provide as

much flexibility as possible around the specifics each firm might identify as their own process

for final approval.

For the sake of clarity, we ask that the clarification of Structuring be exclusive, meaning that it

defines examples of what may be included in the definition and types of activities not in the

definition which would be outside the scope of this provision of the Rule. The Rule clarification

would specify that any activity which is not final approval would not be Structuring. A bespoke

recommendation by itself, without final approval of the transaction, for example, would not be

Structuring, and an exclusive definition would make that clear. It is important that the Rule

interpretation allow firms to define a single, clear moment or event that meets the criteria for

Structuring and not lead to a misinterpretation that multiple events within a transaction would

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be Structuring, requiring principal approval and OMSJ registration of any location from which a

particular associate performs any of those events at any given moment.

30-business day exclusion

The Proposal would amend Rule G-27(g)(ii)(3), the provision of the Rule that governs

supervision of employees at remote locations other than primary residences. Under the current

Rule, the definitions of RSL, branch office, and OMSJ exclude locations other than primary

residences where employees who engage in OMSJ activities work for less than 30 business days

per year. The Proposal would extend that provision to 60 days.

We appreciate the MSRB’s desire to provide more flexibility around supervising associates

remotely. And we recognize that the Board limited itself in the Proposal to initiatives that would

not cause Rule G-27 to deviate from the FINRA supervision regime. As we have argued to the

Board many times, coordination between the MSRB and FINRA should be a top priority for both

agencies.

However, under the proposal, the unjustified distinction between a primary residence and other

locations would remain in place. There is no functional or qualitative difference between

supervising an employee when they are at their primary residence and when they are at a

vacation home or other residential location other than primary residence. The Board has

offered no reasoning why this distinction must remain in the Rule. We urge the MSRB to use this

rulemaking process to specify that employees subject to supervision can work and be

supervised remotely for up to 60 business days per year regardless whether those days are

spent at a primary residence or other location.

The means many firms have adopted to provide work flexibility to associates who engage in

OMSJ activities is to designate associates’ homes as OMSJs and for associates to obtain a Series

53 Principal licenses even though they are the only ones working in their homes and are not

supervising anybody. It also means homes must be physically inspected annually. OMSJs do not

qualify for the remote inspection pilot program. One-person, home-based OMSJs are not what

the Board had in mind when the current supervision scheme was devised.

In fact, this one-person OMSJ problem has always existed within the Rule for non-residential

locations—the “onesie” office location where a single associate works, for which (if a registered

person is engaging in OMSJ activities) it is somehow required that that sole associate be the onsite principal for the purpose presumably of supervising themselves. The BDA again asks the

MSRB to consider this fact pattern and amend its Rule interpretation to remove not only the

antiquated concept of physical supervision requirements but also the unintended burden of

technical Rule compliance with no possible substantive benefit.

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Traders

While the BDA applauds the effort to address Structuring for municipal investment bankers, the

MSRB has yet to consider associates who “effect transactions in, or induce or attempt to induce

the purchase or sale of any municipal security” (“Traders”). We recognize the Board’s desire to

take a measured approach to amending Rule G-27 so as not to cause the Rule to deviate from

FINRA’s supervision regulations. However, the means dealers use to supervise Traders’ activity is

not location based but technological. Supervisors are able to monitor in real time all the

activities of the traders they oversee using software and connectivity. Supervisors can monitor

transactions, risk positions, hedges, communications with customers and trading

counterparties, and virtually any element of a Trader’s activities. And these processes work the

same whether the trader is sitting at the next desk or 1,000 miles away.

Location is no longer relevant to broker-dealer supervision. During the pandemic, most traders

were working remotely on a daily basis for months, and there were no systemic lapses in

supervision across the industry. Even FINRA and SEC examinations of dealers took place

remotely and largely still do. The days of a principal supervising a trader by standing over her

shoulder watching her work are long past. Supervisory requirements that restrict the location

where certain activities can be performed are obsolete. We urge the MSRB and FINRA to work

together going forward to make more fundamental changes to both supervision regimes so that

regulations better reflect the realities of the business.

Broader considerations

The Proposal states “The MSRB does not believe that the Draft Amendments described herein

would impose any burden on competition that is not necessary or appropriate in furtherance of

the purposes of the Exchange Act.” While we generally agree that the Proposal would not

impose any greater burdens on competition than the current Rule, we also believe the MSRB

should, when possible, structure its rules to maximize efficiency without sacrificing investor or

issuer protection.

We expect the Board to identify inefficiencies in the regulatory environment (including the

current supervision rules) that become unnecessary and obsolete as the financial industry

adapts to changes in technology and moves toward a digital and increasingly remote

environment. The effects on competition should not be viewed solely in terms of one product or

one market or one rule provision but holistically across the entire landscape of the financial

markets and the technological advances that affect competition across the industry. The current

location-based supervision regime results in the kinds of across-the-industry inefficiencies that

make every firm less competitive.

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These inefficiencies and lack of flexibility are affecting the ability to attract talent to the

municipal business. Non-dealer Municipal Advisors compete directly for talent with municipal

Broker-Dealers, and MAs have no restrictions at all on work locations. The “buy side” and

emerging financial industries like cryptocurrencies and tokenization also recruit from the same

talent pool and also are not burdened by location-based supervision. The obsolescence of the

MSRB’s supervision regime will continue to make the industry less competitive without more

flexibility around remote supervision.

Firms have been successfully supervising all categories of employees remotely for years.

Reasonable changes like the Proposal’s definition of Structuring and a more flexible remote

supervision regime for Traders would ensure implementation costs to firms are minimal in the

short-term because those remote supervision systems are already in place, but would result in

significant long-term efficiencies and cost reductions.

Training and standards of conduct have been in place since the pandemic and easily could be

enhanced with minimal cost. Firms are already using e-delivery, e-signatures, etc. (no in-person,

physical requirements for signing or delivering important documents). Firms’ IT systems are

geared toward remote work, including centralized email review and retention, centralized

trading platforms, centralized supervisory reporting lines, etc. And firms are already successfully

remotely supervising outsourced jobs and third-party vendors. FINRA, the SEC, and other

financial regulators have embraced remote work, remote supervision, and remote inspections

for their own needs.

Conclusion

The BDA appreciates the MSRB’s efforts to modernize Rule G-27 through the proposed

definition of "Structuring" and the extension of the business-day exclusion for remote locations.

However, we urge the Board to recognize that technology has fundamentally decoupled

supervision from physical geography. By adopting a more flexible, technology-centered

approach—particularly for the supervision of Traders—the Board can eliminate antiquated

inefficiencies while maintaining the high standards of compliance and protection that the

market requires. We look forward to continuing this dialogue as the Board adapts its regulatory

framework to the digital age.

Sincerely,

Michael Decker

Senior Vice President, Research and Public Policy

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March 16, 2026

VIA ELECTRONIC SUBMISSION

Ronald W. Smith

Corporate Secretary

Municipal Securities Rulemaking Board

1300 I Street NW, Suite 1000

Washington, DC 20005

Re:

MSRB Notice 2026-01 – Request for Comment on MSRB Rule G-27 on

Dealer Supervision

Dear Mr. Smith,

SIFMA1 appreciates this opportunity to provide input on MSRB Notice 2026-012, and applauds

the MSRB’s forward-thinking efforts to modernize its rules to reduce undue compliance burdens

on regulated entities while continuing to provide appropriate investor and issuer protections. In

furtherance of this goal the MSRB should:

•

•

eliminate all location-based concepts of supervision, recognizing that functional-based

supervision comports with how business and supervision is conducted today and how

regulators operate in the current electronic workplace;

if that is not possible at this time,

o approve the draft amendments that increase the length of the exclusion from the

municipal branch office registration for locations other than a primary residence

from 30 business days to 60 business days; and

o approve, with our suggested edits, the draft amendments which clarify that the

term “structuring” in the definition of “office of municipal supervisory

jurisdiction” does not include “public finance activities.”

1

SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the

U.S. and global capital markets. On behalf of our industry's nearly 1 million employees, we advocate for legislation,

regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and

related products and services. We serve as an industry coordinating body to promote fair and orderly markets,

informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for

industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S.

regional member of the Global Financial Markets Association (GFMA).

2

MSRB Notice 2026-01 (Jan. 14, 2026).

New York 140 Broadway, 35th Floor | New York, NY 10005

Washington 1099 New York Avenue, NW, 6th Floor | Washington, DC 20001

www.sifma.org

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I.

The MSRB Should Eliminate All Location-Based Concepts of Supervision,

Recognizing that Functional-Based Supervision Comports with How

Business and Supervision is Conducted Today and how Regulators Operate

in the Current Electronic Workplace

SIFMA is very pleased the MSRB has taken the opportunity to review MSRB Rule G-27, on

dealer supervision, considering the changes to the modern workplace.3 SIFMA appreciates that

the MSRB has begun to address some of the longstanding issues with Rule G-27. SIFMA thanks

the MSRB for its creativity and feels strongly that this is a unique opportunity for the MSRB to

make additional amendments to Rule G-27 so that the rule not only reflects how business and

supervision is conducted today and how regulators operate in the current electronic workplace,

but also positions the rule to cover inevitable future developments, including paperless

workflows, around the clock trading cycles, and tokenized securities.

Rule G-27 was originally adopted when business was conducted in person, with paper

documents, in offices that custodied cash and/or securities. All documents and processes are

now electronic and moving to or have moved to cloud storage where they are not even stored in

computer hardware at a work location. Physical securities no longer exist, and funds are moved

electronically. The current supervision rule creates unwitting challenges, including requirements

for there to be a supervisor in a “onesie” one-person office even though that supervisor has no

supervisory capabilities because they cannot supervise themselves.

It is not lost on the industry that despite Rule G-27 having requirements for location-based

supervisions, virtually all SEC and FINRA examinations since 2020 have been conducted in an

effective manner either largely or completely electronically. If the regulators are able to

effectively conduct remote examinations of broker-dealers and carry out other statutory

obligations via fully remote or hybrid work arrangements, then broker-dealers should be able to

effectively conduct remote supervision themselves.

Comparatively, MSRB Rule G-44, on supervisory and compliance obligations of municipal

advisors, has no location-based supervision requirements. Municipal advisors have been able to

effectively supervise their compliance with MSRB rules without location-based requirements

since the adoption of Rule G-44. Further, if the SEC and FINRA can conduct effective

examinations on municipal advisors who operate without regulatory burdens mandating locationbased supervision, as they have for the past six years, then the SEC and FINRA should similarly

be able to conduct effective examinations of broker-dealers without location-based supervision

requirements.

SIFMA advocates for the elimination of the definition of an office of municipal supervisory

jurisdiction (“OMSJ”). The OMSJ designation was originally intended for physical offices that

3

SIFMA also appreciates that FINRA is reviewing its rules on supervision in the modern workplace. See also,

SIFMA letter on FINRA Regulatory Notice 25-07 (Jul. 14, 2025),

https://www.finra.org/sites/default/files/NoticeComment/SIFMA%20Comment%20on%20FINRA%20RN%202507%20%28July%2014%202025%29.pdf.

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maintained hard copy books and records and carried out supervisory functions through line-ofsight practices, relying on direct, over-the-shoulder oversight to detect potential violations or

exceptions. At the time of the OMSJ implementation over 40 years ago, supervisors needed to be

physically present in a shared work location to conduct effective supervision. This is no longer

the case. Today, technology has removed the need for in-person supervision; rather, supervision

is now primarily, and oftentimes exclusively, conducted through firm-wide, centralized,

electronic networks that can be accessed by authorized employees with supervisory

responsibilities and which provide real-time data regarding employee business activities. In

today’s workplace, it is not physical presence that enables effective supervision, it is authorized

access to the systems which enable effective supervision, and that access is independent of

physical location. As a result, the OMSJ designation is outdated. Further, maintaining the OMSJ

designation is burdensome without contributing to the quality of overall supervision because it

requires firms to devote significant resources to determine whether each remote work location

constitutes an OMSJ.4

If the municipal securities broker-dealers are to remain competitive in the marketplace relating to

the hiring and retaining of highly qualified employees, then we urge the MSRB to eliminate the

OMSJ definition. Employers in many sectors of the economy, and other areas of financial

services outside of municipal securities broker-dealers, now offer employment opportunities that

are partially or completely remote, and that flexibility is very attractive to employees. For

municipal securities broker-dealers to be able to attract and retain highly qualified employees,

they need flexibility that the current rules do not permit.

If the MSRB does not entirely eliminate the OMSJ designation, in addition to the amendments

addressing the definition of “structuring”, we ask the MSRB to specifically consider that “order

execution” and “market making” are typically conducted through centralized electronic systems

and can be effectively surveilled and supervised from any location. At a minimum, the MSRB

should allow individuals working from a non-branch office (including remote supervisory

locations) to engage in order execution and market making, including order execution that occurs

outside of business hours.

Eliminating location-based supervision or, at a minimum, approving the draft amendments,

would create minimal burden for the broker-dealer community with the potential for significant

operating efficiency. The MSRB’s amendments would add needed clarity and create further

opportunity for reductions in location-based rule burdens across the regulatory regime applicable

to broker-dealers.

II.

The MSRB Should Approve the Draft Amendments if it Feels it Cannot

Provide Additional Relief at this Time

Although this is a unique opportunity for the MSRB to make additional amendments to Rule G27, SIFMA appreciates that it may not be possible at this time. Absent the ability to make

4

Id. These arguments follow those already made to FINRA.

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further amendments at this time, the proposed amendments should be adopted taking into

account the suggested amendments below.

a. The MSRB Should Approve the Draft Amendments that Increase Length

of the Exclusion from the Municipal Branch Office Registration for

Locations Other than a Primary Residence from 30-Business Days to 60

Business Days.

Barring further amendments, the MSRB should approve the draft amendments that increase the

30-business day exclusion from the municipal branch office registration for locations other than

a primary residence to 60 days.5 As stated above, SIFMA believes that Rule G-27 should not be

location-based at all, but expanding this exclusion in any way is helpful to those that work

remotely from locations other than their primary residence. The Notice puts forth that the MSRB

considered a 120-day exclusion, and SIFMA members believe that is even more helpful than the

increase to 60 days. For the reasons discussed above, SIFMA does not agree with the MSRB that

such an additional expansion of the exclusion would reduce issuer and investor protections.

b. The MSRB Should Approve the Draft Amendments Which Clarify that

the Term “Structuring” in the Definition of “Office of Municipal

Supervisory Jurisdiction” Does Not Include "Public Finance Activities.”

The draft amendments clarify that the term “structuring of public offerings or private

placements” in the definition of “office of municipal supervisory jurisdiction” does not include

“public finance activities.” SIFMA believes that this amendment is a significant positive

development which creates necessary added clarity and recognizes that public finance activities

commonly occur at a client site, while traveling, or otherwise away from an OMSJ.

It is important for the MSRB rules to be neutral as to business model or structure. Broker-dealers

operate under a variety of business models, structures and processes, many of which impact what

is deemed “final approval” of a transaction by a broker-dealer. Proposed Supplementary

Material .07 includes language that is unnecessarily prescriptive or potentially confusing.

Therefore, SIFMA proposes the following simplifications to the MSRB’s proposed language for

Supplementary Material .07:

. 07 Excluded Public Finance Activities. Notwithstanding paragraph (g)(i)(B) of

Rule G27, the term “excluded public finance activities” is defined as activities

that are associated with the structuring of public offerings or private placements,

including but not limited to debt modeling, financial analysis, number running

5

If the MSRB cannot eliminate the OMSJ definition, Rule G-27 should treat a primary residence (or preferably, any

private residence) the same as a location with a 30/60/120-day exclusion from municipal branch office registration,

with the only difference being that a residence should not be time-limited (i.e., an associated person can perform

covered activities every day of the year in his or her residence and the residence would not be considered a

municipal branch office).

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and solicitation of issuers or obligated persons for the dealer’s investment banking

services in connection with municipal securities (i.e., public finance banking

services), but does not include final approval of a transaction. of any bespoke

recommendation, commitment of dealer capital or other formal action with

respect to a public offering or private placement conducted by the dealer. The

aforementioned activities do not serve as an exhaustive list of activities that would

be deemed excluded public finance activities, and other activities in furtherance of

a public offering or private placement could be deemed excluded public finance

activities if the dealer can demonstrate that such other activities do not include

final approval of any bespoke recommendations or commitment of dealer capital

on behalf of the dealer with respect to a public offering or private placement, or

the solicitation of issuers or obligated persons for the dealer’s investment banking

services in connection with municipal securities (i.e., public finance banking

services).

.

*

*

*

Thank you for considering SIFMA’s comments, and for being a thought-leader among regulatory

bodies by envisioning rulemaking that reflects the modern workplace. If a fuller discussion of

our comments would be helpful, I can be reached at (212) 313-1130 or lnorwood@sifma.org.

Sincerely,

Leslie M. Norwood

Managing Director and Associate General Counsel

Head of Municipal Securities

cc: Municipal Securities Rulemaking Board

Ernie Lanza, Chief Regulatory and Policy Officer

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APPENDIX A

QUESTIONS

Structuring of Public Offerings or Private Placements

1. What public finance functions should fall under the category of “structuring of public

offerings or private placements”?

SIFMA members believe that the final approval of a transaction by the broker-dealer is

“structuring”.

2. What public finance functions should not fall under the category of “structuring of public

offerings or private placements”?

SIFMA members believe that any activity related to a new issuance of municipal securities

should fall not under the category of “structuring of public

offerings or private placements,” except for the final approval of the transaction by the brokerdealer.

3. How should Rule G-27 differentiate between public finance functions that must be

conducted at an OMSJ and those that could be conducted at other offices?

Rule G-27 should not differentiate functions based on locations.

4. Is the industry clear on the definition of “structuring of public offerings or private

placements”?

SIFMA members feel that the final approval of a transaction by a broker-dealer is the

“structuring of public offerings or private placements.” Different broker-dealers may have

different views and policies on what is deemed “final approval.”

5. Do firms define the function of structuring as a combination of public finance banking

activities and underwriting activities? If so, which tasks are considered public finance

banking activities and which are underwriting activities.

SIFMA members feel that the final approval of a transaction by a broker-dealer is the

“structuring of public offerings or private placements”. Different broker-dealers may have

different views and policies on what is deemed “final approval.

6. If there is a clear distinction between public finance banking activities and underwriting

activities, should the MSRB clarify which of those distinct functions would be deemed to

take place at an OMSJ? If, in contrast, there is a lack of clarity on this distinction, should

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the MSRB avoid using the public finance banking and underwriting activities

terminology?

The MSRB should eliminate any location-based supervision from Rule G-27 and avoid using the

public finance banking and underwriting activities terminology. Firms generally understand

what “final approval” means in their business model, and different firms have different internal

processes for “final approval.”

30-Business Day Exclusion

7. Should the 30-business day exclusion from the branch office definition under Rule G27(g)(ii)(A)(3) be extended to 60 business days per calendar year?

Yes, if the MSRB cannot eliminate location-based supervision, the 30-business day exclusion

from the branch office definition under Rule G-27(g)(ii)(A)(3) should be extended to 60 business

days per calendar year.

8. Should the MSRB consider a number other than 60 business days per calendar year for

the exclusion under Rule G-27(g)(ii)(A)(3)?

Yes, if the MSRB cannot eliminate location-based supervision, the 30-business day exclusion

from the branch office definition under Rule G-27(g)(ii)(A)(3) should be extended to 120

business days per calendar year.

9. Pursuant to Rule G-27(g)(ii)(C), a "business day" does not include any partial business

day, as long as the associated person spends at least four hours at their designated

municipal branch office during normal business hours. Should the MSRB consider

allowing dealers to define what constitutes a "business day," for purposes of greater

operational efficiencies in tracking associated persons’ compliance with the rule?

Yes, the MSRB should allow dealers to define what constitutes a "business day," for purposes of

greater operational efficiencies in tracking associated persons’ compliance with the rule.

10. Are there any other suggestions regarding the 30-business day exclusion from the branch

office definition under Rule G-27(g)(ii)(A)(3)?

SIFMA believes that the MSRB should eliminate location-based supervision.

Rule G-27

11. Given modern communication technology is allowing for transactions in municipal

securities to be effected anywhere, does the definition of municipal branch office need to

be updated in some respects? Rule G-27(g)(ii)(A) defines a municipal branch office as

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any location where one or more associated persons of a dealer regularly conducts the

business of effecting any transactions in, or inducing or attempting to induce the purchase

or sale of any municipal security, or is held out as such. Should the MSRB define

regularly for purposes of aiding a dealer’s understanding of whether to classify a location

as a municipal branch office? If the MSRB were to define regularly as three or more days

per week would dealers find this brightline test helpful?

Yes, the definition of municipal branch office needs to be updated or, more appropriately,

eliminated. If the MSRB feels the need to retain the definition of municipal branch office, then

the MSRB should refrain from defining “regularly” to provide flexibility for dealers

implementing the rule. It would not be helpful for the MSRB to define regularly as three or

more days per week.

12. The primary residence exception by and large tracks the limitations on the use of a

private residence under the Commission’s records preservation rule, Exchange Act Rule

17a-4. Should the primary residence exception be changed to a private residence

exception for regulatory consistency, and the permitted activities at these locations be

broadened beyond those covered by the RSL classification, such as allowing for the

structuring of public offerings or private placements and order execution/market making,

if certain conditions are met?

As described above, SIFMA believes that MSRB should take this opportunity to eliminate

location-based supervision from Rule G-27. If the MSRB cannot eliminate the definition of

OMSJ at this time, it should change the primary residence exception to a private residence

exception and broaden as much as possible the permitted activities at these locations beyond

those covered by the RSL-exception.6 The MSRB rules should eliminate restrictions on

employee work locations. Decisions regarding employee work locations should be determined

by the broker-dealer employer, considering their business model and any reasonable supervisory

policies and procedures.

13. In addition to the Draft Amendments, what other areas of Rule G-27 should the MSRB

consider reviewing as part of the Rule G-27 retrospective rule review?

The Notice “seeks comments more broadly on additional areas of Rule G-27 that should be

included in the MSRB’s retrospective rule review.” An area that is overdue for review and

revision is G-27(f), which has highly prescriptive provisions regarding firms’ testing of written

supervisory procedures and verifying that the procedures are effective. Among these provisions

are detailed requirements for supervision of “producing managers.” These requirements were

6

As set forth in footnote 5, if the MSRB cannot eliminate the municipal office of supervisory jurisdiction definition,

a primary (or preferably, private) residence and a location with a 30/60/120-day exclusion from municipal branch

office registration should have the same status under the Rule, with the only difference being that a primary (private)

residence is not time-limited (i.e., a {representative} can perform {municipal functions} every day of the year in his

or her primary (private) residence and the primary (private) residence would not be considered a municipal branch

office).

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modeled on requirements in FINRA’s supervision rule, yet FINRA recognized the benefits of a

more flexible approach regarding supervision of managers and eliminated these requirements

over ten years ago.7 FINRA Rules 3110 and 3120 now have far less detail yet still address the

need to properly supervise managers by requiring that procedures prohibit, for example,

supervisors from supervising their own activities or reporting to or having their compensation

determined by an individual that they supervise.8 The MSRB should similarly adopt a more

flexible approach to supervision of managers as well as the review and testing of procedures.

Also, as described above, SIFMA believes that MSRB should take this opportunity to eliminate

location-based supervision from Rule G-27.

14. Should the MSRB consider retiring any current Rule G-27 interpretive guidance? Please

be specific.

SIFMA members believe that the MSRB should consider updating or retiring a number of pieces

of Rule G-27 interpretive guidance, including on the approval of transactions

(https://www.msrb.org/Review-and-Approval-Transactions-0 and https://www.msrb.org/Reviewand-Approval-Transactions), municipal securities sales activities in branch affiliate and

correspondent banks which are Municipal Securities Dealers (https://www.msrb.org/MunicipalSecurities-Sales-Activities-Branch-Affiliate-and-Correspondent-Banks-Which-Are-Municipal),

and the supervisory responsibility of Municipal Securities Principals and Municipal Securities

Sales Principals (https://www.msrb.org/Supervisory-Responsibility-Municipal-SecuritiesPrincipals-and-Municipal-Securities-Sales).

Other

15. Would the Draft Amendments result in a disproportionate and/or undue burden for small

dealers?

No, the Draft Amendments would not result in a disproportionate and/or undue burden for small

dealers.

16. Would the Draft Amendments negatively impact small dealers’ access to business

opportunities?

No, the Draft Amendments would not negatively impact small dealers’ access to business

opportunities.

7

See, FINRA Regulatory Notice 14-10 (Mar. 2014).

8

See, FINRA Rule 3110(b)(6).

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17. Could the Draft Amendments result in any inadvertent negative implications for dealers,

investors or issuers, or marketplace fairness and efficiency more generally?

No, the Draft Amendments would not result in any inadvertent negative implications for dealers,

investors or issuers, or marketplace fairness and efficiency more generally. On the contrary, the

Draft Amendments would open up the possibility of other regulators harmonizing with more

workable rules from the MSRB.

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