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Guest Piece: Vetting the Public Finance Team, Has Your Municipal Advisor Passed the Test?

August 25, 2017
When managing their personal finances, many people turn to financial advisors to help them make informed decisions about complex financial products and investment options.
For state and local government officials responsible for managing the public’s finances, specialized financial advisors called municipal advisors may be hired to provide advice regarding the issuance of municipal bonds or use of municipal financial products.
If a municipal advisor is part of your public finance team, you should know that the Municipal Securities Rulemaking Board (MSRB) — the national regulator responsible for protecting the public interest by promoting a fair and efficient municipal securities market — has established baseline standards of professional qualification for municipal advisors. Municipal advisors must pass the MSRB’s Municipal Advisor Representative Qualification Examination, or Series 50 exam, no later than Sept. 12 to continue engaging in municipal advisor activities.
If you are currently working with a municipal advisor or planning to start a new engagement, it would be prudent to confirm that the municipal advisor has passed the Series 50 exam or is planning to do so by the Sept. 12 deadline. Municipal advisors were granted a grace period of one full year from the launch of the exam on Sept. 12, 2016 to prepare for and pass the exam. Yet with less than one month remaining until the deadline, more than 100 municipal advisor firms registered with MSRB did not have at least one person qualified with the Series 50 exam or enrolled to take the exam.
Find the names of individuals who have passed the Series 50 exam on the MSRB’s website. It is in your constituents’ best interest to make sure that all members of your public finance team are duly qualified in accordance with federal regulations. Doing this due diligence can help avoid a disruption in the municipal advisory services you receive, including preventing a negative impact to the bond issuance process.
MSRB creates and maintains rules for municipal advisors and municipal securities dealers that underwrite and trade municipal bonds. The Series 50 exam is one element of a comprehensive regulatory framework for municipal advisors that includes rules addressing core duties to clients, disclosures and conflicts of interest. Access more information about what to expect from your municipal advisor and how to research the background of your municipal finance professionals on the MSRB’s website.
About the MSRB

MSRB protects investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. 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, MSRB provides market transparency through its Electronic Municipal Market Access (EMMA®) website, the official repository for information on virtually all municipal bonds. 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. 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, and is subject to oversight by the Securities and Exchange Commission.
Erik Dolan is the director, Professional Qualifications, at the Municipal Securities Rulemaking Board, where he manages the development and maintenance of testing standards and educational programs for MSRB-regulated municipal advisors and municipal securities dealers.

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