SIFMA Supports MSRB Proposal to Ease Municipal Office Designation Requirements

SIFMA expressed support for an MSRB proposal that would let certain public finance activities be performed outside an Office of Municipal Supervisory Jurisdiction ("OMSJ") and extend the exclusion period for remote work locations.

The MSRB proposed to amend MSRB Rule G-27 ("Supervision") to define "excluded public finance activities" that do not count as structuring of public offerings or private placements. A location where associated persons perform only those activities would not have to be designated an OMSJ. The proposal would also extend from 30 to 90 business days per calendar year the exclusion from municipal branch office designation for locations other than an employee's primary residence. Final approval of a public offering or private placement transaction would still count as structuring and would still have to occur at an OMSJ.

In a comment letter to the SEC, SIFMA said the exclusion of certain structuring activities from the OMSJ registration requirement is a significant positive development. SIFMA argued that structuring commonly occurs at client sites, while traveling, or otherwise away from an OMSJ, making the current location-based requirement outdated.

SIFMA also supported the extension of the non-primary residence exclusion to 90 business days, stating it would benefit remote employees without reducing investor or issuer protections. The association said the MSRB's revisions appropriately reflect that broker-dealers operate under varying business models that affect what constitutes final approval of a transaction.

While supporting the proposal, SIFMA urged the MSRB to eventually eliminate location-based supervisory concepts entirely in favor of a functional approach. SIFMA also asked FINRA to pursue similar updates to its own supervisory rules.