Pay-to-Play: Proposed MSRB Guidance Regarding PACs Under Rule G-37

September 20, 2010
The Municipal Securities Rulemaking Board (“MSRB”) recently filed with the Securities and Exchange Commission proposed guidance regarding affiliated Political Action Committees for purposes of the pay-to-play limitations imposed on municipal securities dealers under MSRB rule G-37. While the proposed guidance is aimed at municipal securities dealers, if approved by the SEC it will likely serve as precedent for similar limitations imposed on investment advisers by Rule 206(4)-5 under the Investment Advisers Act of 1940. This update summarizes the proposed guidance.