---
kind: "section"
citation: "15 U.S.C. § 78o–4"
title: "15"
title_heading: "Commerce and Trade"
number: "78o–4"
heading: "Municipal securities"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78o-4"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78o–4. Municipal securities

- (a) **Registration of municipal securities dealers—**
  - (1)
    - (A) It shall be unlawful for any [municipal securities dealer](/usc/15/78c.md?p=a-30) (other than one registered as a [broker or dealer](/usc/15/78c.md?p=h-2) under [section 78o](/usc/15/78o.md) of this title) to make use of the mails or any means or instrumentality of [interstate commerce](/usc/15/78c.md?p=a-17) to effect any transaction in, or to induce or attempt to induce the [purchase](/usc/15/78c.md?p=a-13) or sale of, any municipal [security](/usc/15/78c.md?p=a-10) unless such [municipal securities dealer](/usc/15/78c.md?p=a-30) is registered in accordance with this subsection.
    - (B) It shall be unlawful for a municipal advisor to provide advice to or on behalf of a municipal entity or obligated [person](/usc/15/78c.md?p=a-9) with respect to municipal financial products or the issuance of [municipal securities](/usc/15/78c.md?p=a-29), or to undertake a solicitation of a municipal entity or obligated [person](/usc/15/78c.md?p=a-9), unless the municipal advisor is registered in accordance with this subsection.
  - (2) A [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor may be registered by filing with the [Commission](/usc/15/78c.md?p=a-15) an application for registration in such form and containing such information and documents concerning such [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor and any [persons](/usc/15/78c.md?p=a-9) associated with such [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor as the [Commission](/usc/15/78c.md?p=a-15), by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. Within forty-five days of the date of the filing of such application (or within such longer period as to which the [applicant](/usc/15/7a.md?p=3) consents), the [Commission](/usc/15/78c.md?p=a-15) shall—
    - (A) by order grant registration, or
    - (B) institute proceedings to determine whether registration should be denied. Such proceedings shall include notice of the grounds for denial under consideration and opportunity for hearing and shall be concluded within one hundred twenty days of the date of the filing of the application for registration. At the conclusion of such proceedings the [Commission](/usc/15/78c.md?p=a-15), by order, shall grant or deny such registration. The [Commission](/usc/15/78c.md?p=a-15) may extend the time for the conclusion of such proceedings for up to ninety days if it finds good cause for such extension and publishes its reasons for so finding or for such longer period as to which the [applicant](/usc/15/7a.md?p=3) consents.

    The [Commission](/usc/15/78c.md?p=a-15) shall grant the registration of a [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor if the [Commission](/usc/15/78c.md?p=a-15) finds that the requirements of this section are satisfied. The [Commission](/usc/15/78c.md?p=a-15) shall deny such registration if it does not make such a finding or if it finds that if the [applicant](/usc/15/7a.md?p=3) were so registered, its registration would be subject to suspension or revocation under [subsection (c)](#c) of this section.

  - (3) Any provision of this chapter (other than [section 78e of this title](/usc/15/78e.md) or paragraph (1) of this subsection) which prohibits any act, practice, or course of business if the mails or any means or instrumentality of [interstate commerce](/usc/15/78c.md?p=a-17) is used in connection therewith shall also prohibit any such act, practice, or course of business by any registered [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor or any [person](/usc/15/78c.md?p=a-9) acting on behalf of such [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor, irrespective of any use of the mails or any means or instrumentality of [interstate commerce](/usc/15/78c.md?p=a-17) in connection therewith.
  - (4) The [Commission](/usc/15/78c.md?p=a-15), by rule or order, upon its own motion or upon application, may conditionally or unconditionally exempt any [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), [municipal securities dealer](/usc/15/78c.md?p=a-30), or municipal advisor, or class of [brokers](/usc/15/78c.md?p=a-4-A), [dealers](/usc/15/78c.md?p=a-5-A), [municipal securities dealers](/usc/15/78c.md?p=a-30), or municipal advisors from any provision of this section or the rules or regulations thereunder, if the [Commission](/usc/15/78c.md?p=a-15) finds that such exemption is consistent with the public interest, the protection of investors, and the purposes of this section.
  - (5) No municipal advisor shall make use of the mails or any means or instrumentality of [interstate commerce](/usc/15/78c.md?p=a-17) to provide advice to or on behalf of a municipal entity or obligated [person](/usc/15/78c.md?p=a-9) with respect to municipal financial products, the issuance of [municipal securities](/usc/15/78c.md?p=a-29), or to undertake a solicitation of a municipal entity or obligated [person](/usc/15/78c.md?p=a-9), in connection with which such municipal advisor engages in any fraudulent, deceptive, or manipulative act or practice.
- (b) **Municipal Securities Rulemaking Board; rules and regulations—**
  - (1) The [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73) shall be composed of 15 [members](/usc/15/78c.md?p=a-3-A), or such other number of [members](/usc/15/78c.md?p=a-3-A) as specified by rules of the [Board](/usc/15/78c.md?p=a-73) pursuant to [paragraph (2)(B)](#b-2-B),,[^1] which shall perform the duties set forth in this section. The [members](/usc/15/78c.md?p=a-3-A) of the [Board](/usc/15/78c.md?p=a-73) shall serve as [members](/usc/15/78c.md?p=a-3-A) for a term of 3 years or for such other terms as specified by rules of the [Board](/usc/15/78c.md?p=a-73) pursuant to [paragraph (2)(B)](#b-2-B), and shall consist of (A) 8 individuals who are independent of any [municipal securities broker](/usc/15/78c.md?p=a-31), [municipal securities dealer](/usc/15/78c.md?p=a-30), or municipal advisor, at least 1 of whom shall be representative of institutional or retail investors in [municipal securities](/usc/15/78c.md?p=a-29), at least 1 of whom shall be representative of municipal entities, and at least 1 of whom shall be a [member](/usc/15/78c.md?p=a-3-A) of the public with knowledge of or experience in the municipal industry (which [members](/usc/15/78c.md?p=a-3-A) are hereinafter referred to as “public representatives”); and (B) 7 individuals who are associated with a [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), [municipal securities dealer](/usc/15/78c.md?p=a-30), or municipal advisor, including at least 1 individual who is associated with and representative of [brokers](/usc/15/78c.md?p=a-4-A), [dealers](/usc/15/78c.md?p=a-5-A), or [municipal securities dealers](/usc/15/78c.md?p=a-30) that are not [banks](/usc/15/78c.md?p=a-6) or subsidiaries or departments or divisions of [banks](/usc/15/78c.md?p=a-6) (which [members](/usc/15/78c.md?p=a-3-A) are hereinafter referred to as “[broker](/usc/15/78c.md?p=a-4-A)-[dealer](/usc/15/78c.md?p=a-5-A) representatives”), at least 1 individual who is associated with and representative of [municipal securities dealers](/usc/15/78c.md?p=a-30) which are [banks](/usc/15/78c.md?p=a-6) or subsidiaries or departments or divisions of [banks](/usc/15/78c.md?p=a-6) (which [members](/usc/15/78c.md?p=a-3-A) are hereinafter referred to as “[bank](/usc/15/78c.md?p=a-6) representatives”), and at least 1 individual who is associated with a municipal advisor (which [members](/usc/15/78c.md?p=a-3-A) are hereinafter referred to as “advisor representatives” and, together with the [broker](/usc/15/78c.md?p=a-4-A)-[dealer](/usc/15/78c.md?p=a-5-A) representatives and the [bank](/usc/15/78c.md?p=a-6) representatives, are referred to as “regulated representatives”). Each [member](/usc/15/78c.md?p=a-3-A) of the [board](/usc/15/78c.md?p=a-73) shall be knowledgeable of matters related to the [municipal securities](/usc/15/78c.md?p=a-29) markets. Prior to the expiration of the terms of office of the [members](/usc/15/78c.md?p=a-3-A) of the [Board](/usc/15/78c.md?p=a-73), an election shall be held under rules adopted by the [Board](/usc/15/78c.md?p=a-73) (pursuant to [subsection (b)(2)(B)](#b-2-B) of this section) of the [members](/usc/15/78c.md?p=a-3-A) to succeed such [members](/usc/15/78c.md?p=a-3-A).
  - (2) The [Board](/usc/15/78c.md?p=a-73) shall propose and adopt rules to effect the purposes of this chapter with respect to transactions in [municipal securities](/usc/15/78c.md?p=a-29) effected by [brokers](/usc/15/78c.md?p=a-4-A), [dealers](/usc/15/78c.md?p=a-5-A), and [municipal securities dealers](/usc/15/78c.md?p=a-30) and advice provided to or on behalf of municipal entities or obligated [persons](/usc/15/78c.md?p=a-9) by [brokers](/usc/15/78c.md?p=a-4-A), [dealers](/usc/15/78c.md?p=a-5-A), [municipal securities dealers](/usc/15/78c.md?p=a-30), and municipal advisors with respect to municipal financial products, the issuance of [municipal securities](/usc/15/78c.md?p=a-29), and solicitations of municipal entities or obligated [persons](/usc/15/78c.md?p=a-9) undertaken by [brokers](/usc/15/78c.md?p=a-4-A), [dealers](/usc/15/78c.md?p=a-5-A), [municipal securities dealers](/usc/15/78c.md?p=a-30), and municipal advisors. The rules of the [Board](/usc/15/78c.md?p=a-73), as a minimum, shall:
    - (A) provide that no [municipal securities broker](/usc/15/78c.md?p=a-31) or [municipal securities dealer](/usc/15/78c.md?p=a-30) shall effect any transaction in, or induce or attempt to induce the [purchase](/usc/15/78c.md?p=a-13) or sale of, any municipal [security](/usc/15/78c.md?p=a-10), and no [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), [municipal securities dealer](/usc/15/78c.md?p=a-30), or municipal advisor shall provide advice to or on behalf of a municipal entity or obligated [person](/usc/15/78c.md?p=a-9) with respect to municipal financial products or the issuance of [municipal securities](/usc/15/78c.md?p=a-29), unless such [municipal securities broker](/usc/15/78c.md?p=a-31) or [municipal securities dealer](/usc/15/78c.md?p=a-30) meets such standards of operational capability and such [municipal securities broker](/usc/15/78c.md?p=a-31) or [municipal securities dealer](/usc/15/78c.md?p=a-30) and every natural [person associated with](/usc/15/78c.md?p=a-63) such [municipal securities broker](/usc/15/78c.md?p=a-31) or [municipal securities dealer](/usc/15/78c.md?p=a-30) meet such standards of training, experience, competence, and such other qualifications as the [Board](/usc/15/78c.md?p=a-73) finds necessary or appropriate in the public interest or for the protection of investors and municipal entities or obligated [persons](/usc/15/78c.md?p=a-9). In connection with the definition and application of such standards the [Board](/usc/15/78c.md?p=a-73) may—
      - (i) appropriately classify [municipal securities brokers](/usc/15/78c.md?p=a-31), [municipal securities dealers](/usc/15/78c.md?p=a-30), and municipal advisors (taking into account relevant matters, including types of business done, nature of [securities](/usc/15/78c.md?p=a-10) other than [municipal securities](/usc/15/78c.md?p=a-29) sold, and character of business organization), and [persons](/usc/15/78c.md?p=a-9) associated with [municipal securities brokers](/usc/15/78c.md?p=a-31), [municipal securities dealers](/usc/15/78c.md?p=a-30), and municipal advisors;
      - (ii) specify that all or any portion of such standards shall be applicable to any such class; and
      - (iii) require [persons](/usc/15/78c.md?p=a-9) in any such class to pass tests administered in accordance with [subsection (c)(7)](#c-7) of this section.
    - (B) establish fair procedures for the nomination and election of [members](/usc/15/78c.md?p=a-3-A) of the [Board](/usc/15/78c.md?p=a-73) and assure fair representation in such nominations and elections of public representatives, [broker](/usc/15/78c.md?p=a-4-A) [dealer](/usc/15/78c.md?p=a-5-A) representatives, [bank](/usc/15/78c.md?p=a-6) representatives, and advisor representatives. Such rules—
      - (i) shall provide that the number of public representatives of the [Board](/usc/15/78c.md?p=a-73) shall at all times exceed the total number of regulated representatives and that the membership shall at all times be as evenly divided in number as possible between public representatives and regulated representatives;
      - (ii) shall specify the length or lengths of terms [members](/usc/15/78c.md?p=a-3-A) shall serve;
      - (iii) may increase the number of [members](/usc/15/78c.md?p=a-3-A) which shall constitute the whole [Board](/usc/15/78c.md?p=a-73), provided that such number is an odd number; and
      - (iv) shall establish requirements regarding the independence of public representatives.
    - (C) be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with [persons](/usc/15/78c.md?p=a-9) engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in [municipal securities](/usc/15/78c.md?p=a-29) and municipal financial products, to remove impediments to and perfect the mechanism of a free and open market in [municipal securities](/usc/15/78c.md?p=a-29) and municipal financial products, and, in general, to protect investors, municipal entities, obligated [persons](/usc/15/78c.md?p=a-9), and the public interest; and not be designed to permit unfair discrimination among customers, municipal entities, obligated [persons](/usc/15/78c.md?p=a-9), [municipal securities brokers](/usc/15/78c.md?p=a-31), [municipal securities dealers](/usc/15/78c.md?p=a-30), or municipal advisors, to fix minimum profits, to impose any schedule or fix rates of [commissions](/usc/15/78c.md?p=a-15), allowances, discounts, or other fees to be charged by [municipal securities brokers](/usc/15/78c.md?p=a-31), [municipal securities dealers](/usc/15/78c.md?p=a-30), or municipal advisors, to regulate by virtue of any authority conferred by this chapter matters not related to the purposes of this chapter or the [administration](/usc/15/636e.md?p=1) of the [Board](/usc/15/78c.md?p=a-73), or to impose any burden on competition not necessary or appropriate in furtherance of the purposes of this chapter.
    - (D) if the [Board](/usc/15/78c.md?p=a-73) deems appropriate, provide for the arbitration of claims, disputes, and controversies relating to transactions in [municipal securities](/usc/15/78c.md?p=a-29) and advice concerning municipal financial products: Provided, however, that no [person](/usc/15/78c.md?p=a-9) other than a [municipal securities broker](/usc/15/78c.md?p=a-31), [municipal securities dealer](/usc/15/78c.md?p=a-30), municipal advisor, or [person associated with](/usc/15/78c.md?p=a-63) such a [municipal securities broker](/usc/15/78c.md?p=a-31), [municipal securities dealer](/usc/15/78c.md?p=a-30), or municipal advisor may be compelled to submit to such arbitration except at his instance and in accordance with [section 78cc of this title](/usc/15/78cc.md).
    - (E) provide for the periodic examination in accordance with [subsection (c)(7)](#c-7) of this section of [municipal securities brokers](/usc/15/78c.md?p=a-31), [municipal securities dealers](/usc/15/78c.md?p=a-30), and municipal advisors to determine compliance with applicable provisions of this chapter, the rules and regulations thereunder, and the rules of the [Board](/usc/15/78c.md?p=a-73). Such rules shall specify the minimum scope and frequency of such examinations and shall be designed to avoid unnecessary regulatory duplication or undue regulatory burdens for any such [municipal securities broker](/usc/15/78c.md?p=a-31), [municipal securities dealer](/usc/15/78c.md?p=a-30), or municipal advisor.
    - (F) include provisions governing the form and content of quotations relating to [municipal securities](/usc/15/78c.md?p=a-29) which may be distributed or published by any [municipal securities broker](/usc/15/78c.md?p=a-31), [municipal securities dealer](/usc/15/78c.md?p=a-30), or [person associated with](/usc/15/78c.md?p=a-63) such a [municipal securities broker](/usc/15/78c.md?p=a-31) or [municipal securities dealer](/usc/15/78c.md?p=a-30), and the [persons](/usc/15/78c.md?p=a-9) to whom such quotations may be supplied. Such rules relating to quotations shall be designed to produce fair and informative quotations, to prevent fictitious or misleading quotations, and to promote orderly procedures for collecting, distributing, and publishing quotations.
    - (G) prescribe [records](/usc/15/78c.md?p=a-37) to be made and kept by [municipal securities brokers](/usc/15/78c.md?p=a-31), [municipal securities dealers](/usc/15/78c.md?p=a-30), and municipal advisors and the periods for which such [records](/usc/15/78c.md?p=a-37) shall be preserved.
    - (H) define the term “separately identifiable department or division”, as that term is used in [section 78c(a)(30) of this title](/usc/15/78c.md?p=a-30), in accordance with specified and appropriate standards to assure that a [bank](/usc/15/78c.md?p=a-6) is not deemed to be engaged in the business of buying and selling [municipal securities](/usc/15/78c.md?p=a-29) through a separately identifiable department or division unless such department or division is organized and administered so as to permit independent examination and enforcement of applicable provisions of this chapter, the rules and regulations thereunder, and the rules of the [Board](/usc/15/78c.md?p=a-73). A separately identifiable department or division of a [bank](/usc/15/78c.md?p=a-6) may be engaged in activities other than those relating to [municipal securities](/usc/15/78c.md?p=a-29).
    - (I) provide for the operation and [administration](/usc/15/636e.md?p=1) of the [Board](/usc/15/78c.md?p=a-73), including the selection of a Chairman from among the [members](/usc/15/78c.md?p=a-3-A) of the [Board](/usc/15/78c.md?p=a-73), the compensation of the [members](/usc/15/78c.md?p=a-3-A) of the [Board](/usc/15/78c.md?p=a-73), and the appointment and compensation of such employees, attorneys, and consultants as may be necessary or appropriate to carry out the [Board](/usc/15/78c.md?p=a-73)’s functions under this section.
    - (J) provide that each [municipal securities broker](/usc/15/78c.md?p=a-31), [municipal securities dealer](/usc/15/78c.md?p=a-30), and municipal advisor shall pay to the [Board](/usc/15/78c.md?p=a-73) such reasonable fees and charges as may be necessary or appropriate to defray the costs and expenses of operating and administering the [Board](/usc/15/78c.md?p=a-73). Such rules shall specify the amount of such fees and charges, which may include charges for failure to submit to the [Board](/usc/15/78c.md?p=a-73), or to any information system operated by the [Board](/usc/15/78c.md?p=a-73), within the prescribed timeframes, any items of information or documents required to be submitted under any rule issued by the [Board](/usc/15/78c.md?p=a-73).
    - (K) establish the terms and conditions under which any [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), or [municipal securities dealer](/usc/15/78c.md?p=a-30) may [sell](/usc/15/78c.md?p=a-14), or prohibit any [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), or [municipal securities dealer](/usc/15/78c.md?p=a-30) from selling, any part of a new issue of [municipal securities](/usc/15/78c.md?p=a-29) to a related account of a [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), or [municipal securities dealer](/usc/15/78c.md?p=a-30) during the underwriting period.
    - (L) with respect to municipal advisors—
      - (i) prescribe means reasonably designed to prevent acts, practices, and courses of business as are not consistent with a municipal advisor’s fiduciary duty to its clients;
      - (ii) provide continuing education requirements for municipal advisors;
      - (iii) provide professional standards; and
      - (iv) not impose a regulatory burden on small municipal advisors that is not necessary or appropriate in the public interest and for the protection of investors, municipal entities, and obligated [persons](/usc/15/78c.md?p=a-9), provided that there is robust protection of investors against fraud.
  - (3) The [Board](/usc/15/78c.md?p=a-73), in conjunction with or on behalf of any Federal financial regulator or [self-regulatory organization](/usc/15/78c.md?p=a-26), may—
    - (A) establish information systems; and
    - (B) assess such reasonable fees and charges for the submission of information to, or the receipt of information from, such systems from any [persons](/usc/15/78c.md?p=a-9) which systems may be developed for the purposes of serving as a repository of information from municipal market [participants](/usc/15/78c.md?p=a-24) or otherwise in furtherance of the purposes of the [Board](/usc/15/78c.md?p=a-73), a Federal financial regulator, or a [self-regulatory organization](/usc/15/78c.md?p=a-26), except that the [Board](/usc/15/78c.md?p=a-73)—
      - (i) may not charge a fee to municipal entities or obligated [persons](/usc/15/78c.md?p=a-9) to submit documents or other information to the [Board](/usc/15/78c.md?p=a-73) or charge a fee to any [person](/usc/15/78c.md?p=a-9) to obtain, directly from the Internet site of the [Board](/usc/15/78c.md?p=a-73), documents or information submitted by municipal entities, obligated [persons](/usc/15/78c.md?p=a-9), [brokers](/usc/15/78c.md?p=a-4-A), [dealers](/usc/15/78c.md?p=a-5-A), [municipal securities dealers](/usc/15/78c.md?p=a-30), or municipal advisors, including documents submitted under the rules of the [Board](/usc/15/78c.md?p=a-73) or the [Commission](/usc/15/78c.md?p=a-15); and
      - (ii) shall not be prohibited from charging commercially reasonable fees for automated subscription-based feeds or similar services, or for charging for other data or document-based services customized upon request of any [person](/usc/15/78c.md?p=a-9), made available to commercial enterprises, [municipal securities](/usc/15/78c.md?p=a-29) market professionals, or the general public, whether delivered through the Internet or any other means, that contain all or part of the documents or information, subject to approval of the fees by the [Commission](/usc/15/78c.md?p=a-15) under [section 78s(b) of this title](/usc/15/78s.md?p=b).
  - (4) The [Board](/usc/15/78c.md?p=a-73) may provide guidance and assistance in the enforcement of, and examination for, compliance with the rules of the [Board](/usc/15/78c.md?p=a-73) to the [Commission](/usc/15/78c.md?p=a-15), a registered [securities](/usc/15/78c.md?p=a-10) association under [section 78o–3](/usc/15/78o–3.md) of this title, or any other [appropriate regulatory agency](/usc/15/78c.md?p=a-34), as applicable.
  - (5) The [Board](/usc/15/78c.md?p=a-73), the [Commission](/usc/15/78c.md?p=a-15), and a registered [securities](/usc/15/78c.md?p=a-10) association under [section 78o–3](/usc/15/78o–3.md) of this title, or the designees of the [Board](/usc/15/78c.md?p=a-73), the [Commission](/usc/15/78c.md?p=a-15), or such association, shall meet not less frequently than 2 times a year—
    - (A) to describe the work of the [Board](/usc/15/78c.md?p=a-73), the [Commission](/usc/15/78c.md?p=a-15), and the registered [securities](/usc/15/78c.md?p=a-10) association involving the regulation of [municipal securities](/usc/15/78c.md?p=a-29); and
    - (B) to share information about—
      - (i) the interpretation of the [Board](/usc/15/78c.md?p=a-73), the [Commission](/usc/15/78c.md?p=a-15), and the registered [securities](/usc/15/78c.md?p=a-10) association of [Board](/usc/15/78c.md?p=a-73) rules; and
      - (ii) examination and enforcement of compliance with [Board](/usc/15/78c.md?p=a-73) rules.
  - (7) [^2] Nothing in this section shall be construed to impair or limit the power of the [Commission](/usc/15/78c.md?p=a-15) under this chapter.
  - (8)
    - (A) The [Commission](/usc/15/78c.md?p=a-15) shall adopt data standards for information submitted to the [Board](/usc/15/78c.md?p=a-73).
    - (B) Any data standards adopted under [subparagraph (A)](#b-8-A) shall incorporate, and ensure compatibility with (to the extent feasible), all applicable data standards established in the rules promulgated under [section 5334 of title 12](/usc/12/5334.md), including, to the extent practicable, by having the characteristics described in clauses (i) through (vi) of subsection (c)(1)(B) of such section 5334.
    - (C) The [Commission](/usc/15/78c.md?p=a-15) shall consult market [participants](/usc/15/78c.md?p=a-24) in establishing data standards under [subparagraph (A)](#b-8-A).
    - (D) Nothing in this paragraph may be construed to affect the operation of paragraph [(1)](#d-1) or [(2)](#d-2) of subsection (d).
- (c) **Discipline of municipal securities dealers; censure; suspension or revocation of registration; other sanctions; investigations—**
  - (1) No [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), or [municipal securities dealer](/usc/15/78c.md?p=a-30) shall make use of the mails or any means or instrumentality of [interstate commerce](/usc/15/78c.md?p=a-17) to effect any transaction in, or to induce or attempt to induce the [purchase](/usc/15/78c.md?p=a-13) or sale of, any municipal [security](/usc/15/78c.md?p=a-10), and no [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), [municipal securities dealer](/usc/15/78c.md?p=a-30), or municipal advisor shall make use of the mails or any means or instrumentality of [interstate commerce](/usc/15/78c.md?p=a-17) to provide advice to or on behalf of a municipal entity or obligated [person](/usc/15/78c.md?p=a-9) with respect to municipal financial products, the issuance of [municipal securities](/usc/15/78c.md?p=a-29), or to undertake a solicitation of a municipal entity or obligated [person](/usc/15/78c.md?p=a-9), in contravention of any rule of the [Board](/usc/15/78c.md?p=a-73). A municipal advisor and any [person associated with](/usc/15/78c.md?p=a-63) such municipal advisor shall be deemed to have a fiduciary duty to any municipal entity for whom such municipal advisor acts as a municipal advisor, and no municipal advisor may engage in any act, practice, or course of business which is not consistent with a municipal advisor’s fiduciary duty or that is in contravention of any rule of the [Board](/usc/15/78c.md?p=a-73).
  - (2) The [Commission](/usc/15/78c.md?p=a-15), by order, shall censure, place limitations on the activities, functions, or operations, suspend for a period not exceeding twelve months, or revoke the registration of any [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor, if it finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, denial, suspension, or revocation, is in the public interest and that such [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor has committed or omitted any act, or is subject to an order or finding, enumerated in subparagraph (A), (D), (E), (H), or (G) of paragraph (4) of [section 78o(b)](/usc/15/78o.md?p=b) of this title, has been convicted of any offense specified in subparagraph (B) of such [paragraph (4)](#c-4) within ten years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of such [paragraph (4)](#c-4).
  - (3) Pending [final determination](/usc/15/37a.md?p=4) whether any registration under this section shall be revoked, the [Commission](/usc/15/78c.md?p=a-15), by order, may suspend such registration, if such suspension appears to the [Commission](/usc/15/78c.md?p=a-15), after notice and opportunity for hearing, to be necessary or appropriate in the public interest or for the protection of investors or municipal entities or obligated [person](/usc/15/78c.md?p=a-9).[^3] Any registered [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor may, upon such terms and conditions as the [Commission](/usc/15/78c.md?p=a-15) may deem necessary in the public interest or for the protection of investors or municipal entities or obligated [person](/usc/15/78c.md?p=a-9),[^3] withdraw from registration by filing a written notice of withdrawal with the [Commission](/usc/15/78c.md?p=a-15). If the [Commission](/usc/15/78c.md?p=a-15) finds that any registered [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor is no longer in existence or has ceased to do business as a [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor, the [Commission](/usc/15/78c.md?p=a-15), by order, shall cancel the registration of such [municipal securities dealer](/usc/15/78c.md?p=a-30) or municipal advisor.
  - (4) The [Commission](/usc/15/78c.md?p=a-15), by order, shall censure or place limitations on the activities or functions of any [person](/usc/15/78c.md?p=a-9) associated, seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated with a [municipal securities dealer](/usc/15/78c.md?p=a-30), or suspend for a period not exceeding 12 months or bar any such [person](/usc/15/78c.md?p=a-9) from being associated with a [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), [investment adviser](/usc/15/78c.md?p=a-20), [municipal securities dealer](/usc/15/78c.md?p=a-30), municipal advisor, [transfer agent](/usc/15/78c.md?p=a-25), or [nationally recognized statistical rating organization](/usc/15/78c.md?p=a-62), if the [Commission](/usc/15/78c.md?p=a-15) finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or bar is in the public interest and that such [person](/usc/15/78c.md?p=a-9) has committed any act, or is subject to an order or finding, enumerated in subparagraph (A), (D), (E), (H), or (G) of paragraph (4) of [section 78o(b)](/usc/15/78o.md?p=b) of this title, has been convicted of any offense specified in subparagraph (B) of such [paragraph (4)](#c-4) within 10 years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of such [paragraph (4)](#c-4). It shall be unlawful for any [person](/usc/15/78c.md?p=a-9) as to whom an order entered pursuant to this paragraph or paragraph (5) of this subsection suspending or barring him from being associated with a [municipal securities dealer](/usc/15/78c.md?p=a-30) is in effect willfully to become, or to be, associated with a [municipal securities dealer](/usc/15/78c.md?p=a-30) without the consent of the [Commission](/usc/15/78c.md?p=a-15), and it shall be unlawful for any [municipal securities dealer](/usc/15/78c.md?p=a-30) to permit such a [person](/usc/15/78c.md?p=a-9) to become, or remain, a [person associated with](/usc/15/78c.md?p=a-63) him without the consent of the [Commission](/usc/15/78c.md?p=a-15), if such [municipal securities dealer](/usc/15/78c.md?p=a-30) knew, or, in the exercise of reasonable care should have known, of such order.
  - (5) With respect to any [municipal securities dealer](/usc/15/78c.md?p=a-30) for which the [Commission](/usc/15/78c.md?p=a-15) is not the [appropriate regulatory agency](/usc/15/78c.md?p=a-34), the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [municipal securities dealer](/usc/15/78c.md?p=a-30) may sanction any such [municipal securities dealer](/usc/15/78c.md?p=a-30) in the manner and for the reasons specified in paragraph (2) of this subsection and any [person associated with](/usc/15/78c.md?p=a-63) such [municipal securities dealer](/usc/15/78c.md?p=a-30) in the manner and for the reasons specified in paragraph (4) of this subsection. In addition, such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) may, in accordance with [section 1818 of title 12](/usc/12/1818.md), enforce compliance by such [municipal securities dealer](/usc/15/78c.md?p=a-30) or any [person associated with](/usc/15/78c.md?p=a-63) such [municipal securities dealer](/usc/15/78c.md?p=a-30) with the provisions of this section, [section 78q of this title](/usc/15/78q.md), the rules of the [Board](/usc/15/78c.md?p=a-73), and the rules of the [Commission](/usc/15/78c.md?p=a-15) pertaining to [municipal securities dealers](/usc/15/78c.md?p=a-30), [persons](/usc/15/78c.md?p=a-9) associated with [municipal securities dealers](/usc/15/78c.md?p=a-30), and transactions in [municipal securities](/usc/15/78c.md?p=a-29). For purposes of the preceding sentence, any violation of any such provision shall constitute adequate basis for the issuance of any order under section [1818(b)](/usc/12/1818.md?p=b) or [1818(c)](/usc/12/1818.md?p=c) of title 12, and the customers of any such [municipal securities dealer](/usc/15/78c.md?p=a-30) shall be deemed to be “depositors” as that term is used in [section 1818(c) of title 12](/usc/12/1818.md?p=c). Nothing in this paragraph shall be construed to affect in any way the powers of such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) to proceed against such [municipal securities dealer](/usc/15/78c.md?p=a-30) under any other provision of law.
  - (6)
    - (A) The [Commission](/usc/15/78c.md?p=a-15), prior to the entry of an order of investigation, or commencement of any proceedings, against any [municipal securities dealer](/usc/15/78c.md?p=a-30), or [person associated with](/usc/15/78c.md?p=a-63) any [municipal securities dealer](/usc/15/78c.md?p=a-30), for which the [Commission](/usc/15/78c.md?p=a-15) is not the [appropriate regulatory agency](/usc/15/78c.md?p=a-34), for violation of any provision of this section, section [78o(c)(1)](/usc/15/78o.md?p=c-1) or [78o(c)(2)](/usc/15/78o.md?p=c-2) of this title, any rule or regulation under any such section, or any rule of the [Board](/usc/15/78c.md?p=a-73), shall (i) give notice to the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for such [municipal securities dealer](/usc/15/78c.md?p=a-30) of the identity of such [municipal securities dealer](/usc/15/78c.md?p=a-30) or [person associated with](/usc/15/78c.md?p=a-63) such [municipal securities dealer](/usc/15/78c.md?p=a-30), the nature of and basis for such proposed action, and whether the [Commission](/usc/15/78c.md?p=a-15) is seeking a monetary penalty against such [municipal securities dealer](/usc/15/78c.md?p=a-30) or such associated [person](/usc/15/78c.md?p=a-9) pursuant to [section 78u–2 of this title](/usc/15/78u–2.md); and (ii) consult with such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) concerning the effect of such proposed action on sound banking practices and the feasibility and desirability of coordinating such action with any proceeding or proposed proceeding by such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) against such [municipal securities dealer](/usc/15/78c.md?p=a-30) or associated [person](/usc/15/78c.md?p=a-9).
    - (B) The [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for a [municipal securities dealer](/usc/15/78c.md?p=a-30) (if other than the [Commission](/usc/15/78c.md?p=a-15)), prior to the entry of an order of investigation, or commencement of any proceedings, against such [municipal securities dealer](/usc/15/78c.md?p=a-30) or [person associated with](/usc/15/78c.md?p=a-63) such [municipal securities dealer](/usc/15/78c.md?p=a-30), for violation of any provision of this section, the rules of the [Board](/usc/15/78c.md?p=a-73), or the rules or regulations of the [Commission](/usc/15/78c.md?p=a-15) pertaining to [municipal securities dealers](/usc/15/78c.md?p=a-30), [persons](/usc/15/78c.md?p=a-9) associated with [municipal securities dealers](/usc/15/78c.md?p=a-30), or transactions in [municipal securities](/usc/15/78c.md?p=a-29) shall (i) give notice to the [Commission](/usc/15/78c.md?p=a-15) of the identity of such [municipal securities dealer](/usc/15/78c.md?p=a-30) or [person associated with](/usc/15/78c.md?p=a-63) such [municipal securities dealer](/usc/15/78c.md?p=a-30) and the nature of and basis for such proposed action and (ii) consult with the [Commission](/usc/15/78c.md?p=a-15) concerning the effect of such proposed action on the protection of investors or municipal entities or obligated [person](/usc/15/78c.md?p=a-9)[^3] and the feasibility and desirability of coordinating such action with any proceeding or proposed proceeding by the [Commission](/usc/15/78c.md?p=a-15) against such [municipal securities dealer](/usc/15/78c.md?p=a-30) or associated [person](/usc/15/78c.md?p=a-9).
    - (C) Nothing in this paragraph shall be construed to impair or limit (other than by the requirement of prior consultation) the power of the [Commission](/usc/15/78c.md?p=a-15) or the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for a [municipal securities dealer](/usc/15/78c.md?p=a-30) to initiate any action of a class described in this paragraph or to affect in any way the power of the [Commission](/usc/15/78c.md?p=a-15) or such [appropriate regulatory agency](/usc/15/78c.md?p=a-34) to initiate any other action pursuant to this chapter or any other provision of law.
  - (7)
    - (A) Tests required pursuant to [subsection (b)(2)(A)(iii)](#b-2-A-iii) of this section shall be administered by or on behalf of and periodic examinations pursuant to [subsection (b)(2)(E)](#b-2-E) of this section shall be conducted by—
      - (i) a registered [securities](/usc/15/78c.md?p=a-10) association, in the case of [municipal securities brokers](/usc/15/78c.md?p=a-31) and [municipal securities dealers](/usc/15/78c.md?p=a-30) who are [members](/usc/15/78c.md?p=a-3-A) of such association;
      - (ii) the [appropriate regulatory agency](/usc/15/78c.md?p=a-34) for any [municipal securities broker](/usc/15/78c.md?p=a-31) or [municipal securities dealer](/usc/15/78c.md?p=a-30), in the case of all other [municipal securities brokers](/usc/15/78c.md?p=a-31) and [municipal securities dealers](/usc/15/78c.md?p=a-30); and
      - (iii) the [Commission](/usc/15/78c.md?p=a-15), or its designee, in the case of municipal advisors.
    - (B) A registered [securities](/usc/15/78c.md?p=a-10) association shall make a report of any examination conducted pursuant to [subsection (b)(2)(E)](#b-2-E) of this section and promptly furnish the [Commission](/usc/15/78c.md?p=a-15) a copy thereof and any data supplied to it in connection with such examination. Subject to such limitations as the [Commission](/usc/15/78c.md?p=a-15), by rule, determines to be necessary or appropriate in the public interest or for the protection of investors or municipal entities or obligated [person](/usc/15/78c.md?p=a-9),[^3] the [Commission](/usc/15/78c.md?p=a-15) shall, on request, make available to the [Board](/usc/15/78c.md?p=a-73) a copy of any report of an examination of a [municipal securities broker](/usc/15/78c.md?p=a-31) or [municipal securities dealer](/usc/15/78c.md?p=a-30) made by or furnished to the [Commission](/usc/15/78c.md?p=a-15) pursuant to this paragraph or [section 78q(c)(3) of this title](/usc/15/78q.md?p=c-3).
  - (8) The [Commission](/usc/15/78c.md?p=a-15) is authorized, by order, if in its opinion such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise, in furtherance of the purposes of this chapter, to remove from office or censure any [person](/usc/15/78c.md?p=a-9) who is, or at the time of the alleged violation or abuse was, a [member](/usc/15/78c.md?p=a-3-A) or employee of the [Board](/usc/15/78c.md?p=a-73), who, the [Commission](/usc/15/78c.md?p=a-15) finds, on the record after notice and opportunity for hearing, has willfully (A) violated any provision of this chapter, the rules and regulations thereunder, or the rules of the [Board](/usc/15/78c.md?p=a-73) or (B) abused his authority.
  - (9)
    - (A) Fines collected by the [Commission](/usc/15/78c.md?p=a-15) for violations of the rules of the [Board](/usc/15/78c.md?p=a-73) shall be equally divided between the [Commission](/usc/15/78c.md?p=a-15) and the [Board](/usc/15/78c.md?p=a-73).
    - (B) Fines collected by a registered [securities](/usc/15/78c.md?p=a-10) association under [section 78o–3(b)(7)](/usc/15/78o–3.md?p=b-7)[^4] of this title with respect to violations of the rules of the [Board](/usc/15/78c.md?p=a-73) shall be accounted for by such registered [securities](/usc/15/78c.md?p=a-10) association separately from other fines collected under [section 78o–3(b)(7)](/usc/15/78o–3.md?p=b-7)[^4] of this title and shall be allocated between such registered [securities](/usc/15/78c.md?p=a-10) association and the [Board](/usc/15/78c.md?p=a-73), and such allocation shall require the registered [securities](/usc/15/78c.md?p=a-10) association to pay to the [Board](/usc/15/78c.md?p=a-73) ⅓ of all fines collected by the registered [securities](/usc/15/78c.md?p=a-10) association reasonably allocable to violations of the rules of the [Board](/usc/15/78c.md?p=a-73), or such other portion of such fines as may be directed by the [Commission](/usc/15/78c.md?p=a-15) upon [agreement](/usc/15/7a.md?p=2) between the registered [securities](/usc/15/78c.md?p=a-10) association and the [Board](/usc/15/78c.md?p=a-73).
- (d) **Issuance of municipal securities—**
  - (1) Neither the [Commission](/usc/15/78c.md?p=a-15) nor the [Board](/usc/15/78c.md?p=a-73) is authorized under this chapter, by rule or regulation, to require any [issuer](/usc/15/78c.md?p=a-8) of [municipal securities](/usc/15/78c.md?p=a-29), directly or indirectly through a purchaser or prospective purchaser of [securities](/usc/15/78c.md?p=a-10) from the [issuer](/usc/15/78c.md?p=a-8), to file with the [Commission](/usc/15/78c.md?p=a-15) or the [Board](/usc/15/78c.md?p=a-73) prior to the sale of such [securities](/usc/15/78c.md?p=a-10) by the [issuer](/usc/15/78c.md?p=a-8) any application, report, or document in connection with the issuance, sale, or distribution of such [securities](/usc/15/78c.md?p=a-10).
  - (2) The [Board](/usc/15/78c.md?p=a-73) is not authorized under this chapter to require any [issuer](/usc/15/78c.md?p=a-8) of [municipal securities](/usc/15/78c.md?p=a-29), directly or indirectly through a [municipal securities broker](/usc/15/78c.md?p=a-31), [municipal securities dealer](/usc/15/78c.md?p=a-30), municipal advisor, or otherwise, to furnish to the [Board](/usc/15/78c.md?p=a-73) or to a purchaser or a prospective purchaser of such [securities](/usc/15/78c.md?p=a-10) any application, report, document, or information with respect to such [issuer](/usc/15/78c.md?p=a-8): Provided, however, That the [Board](/usc/15/78c.md?p=a-73) may require [municipal securities brokers](/usc/15/78c.md?p=a-31) and [municipal securities dealers](/usc/15/78c.md?p=a-30) or municipal advisors to furnish to the [Board](/usc/15/78c.md?p=a-73) or purchasers or prospective purchasers of [municipal securities](/usc/15/78c.md?p=a-29) applications, reports, documents, and information with respect to the [issuer](/usc/15/78c.md?p=a-8) thereof which is generally available from a source other than such [issuer](/usc/15/78c.md?p=a-8). Nothing in this paragraph shall be construed to impair or limit the power of the [Commission](/usc/15/78c.md?p=a-15) under any provision of this chapter.
- (e) **Definitions—** For purposes of this section—
  - (1) the term “[Board](/usc/15/78c.md?p=a-73)” means the [Municipal Securities](/usc/15/78c.md?p=a-29) Rulemaking [Board](/usc/15/78c.md?p=a-73) established under [subsection (b)(1)](#b-1);
  - (2) the term “guaranteed investment contract” includes any investment that has specified withdrawal or reinvestment provisions and a specifically negotiated or bid interest rate, and also includes any [agreement](/usc/15/7a.md?p=2) to supply investments on 2 or more future dates, such as a forward supply contract;
  - (3) the term “investment strategies” includes plans or programs for the investment of the proceeds of [municipal securities](/usc/15/78c.md?p=a-29) that are not municipal derivatives, guaranteed investment contracts, and the recommendation of and brokerage of municipal escrow investments;
  - (4) the term “municipal advisor”—
    - (A) means a [person](/usc/15/78c.md?p=a-9) (who is not a municipal entity or an employee of a municipal entity) that—
      - (i) provides advice to or on behalf of a municipal entity or obligated [person](/usc/15/78c.md?p=a-9) with respect to municipal financial products or the issuance of [municipal securities](/usc/15/78c.md?p=a-29), including advice with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues; or
      - (ii) undertakes a solicitation of a municipal entity;
    - (B) includes financial advisors, guaranteed investment contract [brokers](/usc/15/78c.md?p=a-4-A), third-party marketers, placement agents, solicitors, finders, and [swap](/usc/15/78c.md?p=a-69) advisors, if such [persons](/usc/15/78c.md?p=a-9) are described in any of clauses (i) through (iii)[^5] of [subparagraph (A)](#e-4-A); and
    - (C) does not include a [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), or [municipal securities dealer](/usc/15/78c.md?p=a-30) serving as an [underwriter](/usc/15/78c.md?p=a-20) (as defined in [section 77b(a)(11) of this title](/usc/15/77b.md?p=a-11)), any [investment adviser](/usc/15/78c.md?p=a-20) registered under the Investment Advisers Act of 1940 [[15 U.S.C. 80b–1](/usc/15/80b–1.md) et seq.], or [persons](/usc/15/78c.md?p=a-9) associated with such [investment advisers](/usc/15/78c.md?p=a-20) who are providing investment advice, any commodity trading advisor registered under the Commodity Exchange Act [[7 U.S.C. 1](/usc/7/1.md) et seq.] or [persons](/usc/15/78c.md?p=a-9) associated with a commodity trading advisor who are providing advice related to [swaps](/usc/15/78c.md?p=a-69), attorneys offering legal advice or providing services that are of a traditional legal nature, or engineers providing engineering advice;
  - (5) the term “municipal financial product” means municipal derivatives, guaranteed investment contracts, and investment strategies;
  - (6) the term “rules of the [Board](/usc/15/78c.md?p=a-73)” means the rules proposed and adopted by the [Board](/usc/15/78c.md?p=a-73) under [subsection (b)(2)](#b-2);
  - (7) the term “[person associated with](/usc/15/78c.md?p=a-63) a municipal advisor” or “associated [person](/usc/15/78c.md?p=a-9) of an advisor” means—
    - (A) any partner, officer, [director](/usc/15/78c.md?p=a-7), or branch manager of such municipal advisor (or any [person](/usc/15/78c.md?p=a-9) occupying a similar status or performing similar functions);
    - (B) any other employee of such municipal advisor who is engaged in the management, direction, supervision, or performance of any activities relating to the provision of advice to or on behalf of a municipal entity or obligated [person](/usc/15/78c.md?p=a-9) with respect to municipal financial products or the issuance of [municipal securities](/usc/15/78c.md?p=a-29); and
    - (C) any [person](/usc/15/78c.md?p=a-9) directly or indirectly controlling, controlled by, or under common control with such municipal advisor;
  - (8) the term “municipal entity” means any [State](/usc/15/78c.md?p=a-16), political subdivision of a [State](/usc/15/78c.md?p=a-16), or municipal corporate instrumentality of a [State](/usc/15/78c.md?p=a-16), including—
    - (A) any agency, authority, or instrumentality of the [State](/usc/15/78c.md?p=a-16), political subdivision, or municipal corporate instrumentality;
    - (B) any plan, program, or pool of assets sponsored or established by the [State](/usc/15/78c.md?p=a-16), political subdivision, or municipal corporate instrumentality or any agency, authority, or instrumentality thereof; and
    - (C) any other [issuer](/usc/15/78c.md?p=a-8) of [municipal securities](/usc/15/78c.md?p=a-29);
  - (9) the term “solicitation of a municipal entity or obligated [person](/usc/15/78c.md?p=a-9)” means a direct or indirect communication with a municipal entity or obligated [person](/usc/15/78c.md?p=a-9) made by a [person](/usc/15/78c.md?p=a-9), for direct or indirect compensation, on behalf of a [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), [municipal securities dealer](/usc/15/78c.md?p=a-30), municipal advisor, or [investment adviser](/usc/15/78c.md?p=a-20) (as defined in section 202 of the Investment Advisers Act of 1940 [[15 U.S.C. 80b–2](/usc/15/80b–2.md)]) that does not control, is not controlled by, or is not under common control with the [person](/usc/15/78c.md?p=a-9) undertaking such solicitation for the purpose of obtaining or retaining an engagement by a municipal entity or obligated [person](/usc/15/78c.md?p=a-9) of a [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), [municipal securities dealer](/usc/15/78c.md?p=a-30), or municipal advisor for or in connection with municipal financial products, the issuance of [municipal securities](/usc/15/78c.md?p=a-29), or of an [investment adviser](/usc/15/78c.md?p=a-20) to provide investment advisory services to or on behalf of a municipal entity; and
  - (10) the term “obligated [person](/usc/15/78c.md?p=a-9)” means any [person](/usc/15/78c.md?p=a-9), including an [issuer](/usc/15/78c.md?p=a-8) of [municipal securities](/usc/15/78c.md?p=a-29), who is either generally or through an enterprise, fund, or account of such [person](/usc/15/78c.md?p=a-9), committed by contract or other arrangement to support the payment of all or part of the obligations on the [municipal securities](/usc/15/78c.md?p=a-29) to be sold in an offering of [municipal securities](/usc/15/78c.md?p=a-29).

## Footnotes

[^1]: So in original.
[^2]: So in original. No par. (6) has been enacted.
[^3]: So in original. Person probably should be plural.
[^4]: See References in Text note below.
[^5]: So in original. Subpar. (A) does not contain a cl. (iii).

## Source credit

(June 6, 1934, ch. 404, title I, § 15B, as added Pub. L. 94–29, § 13, June 4, 1975, 89 Stat. 131; amended Pub. L. 98–38, § 4, June 6, 1983, 97 Stat. 207; Pub. L. 100–181, title III, §§ 318–320, Dec. 4, 1987, 101 Stat. 1256, 1257; Pub. L. 101–429, title II, § 205, Oct. 15, 1990, 104 Stat. 941; Pub. L. 101–550, title II, § 203(c)(1), Nov. 15, 1990, 104 Stat. 2718; Pub. L. 105–353, title III, § 301(b)(9), Nov. 3, 1998, 112 Stat. 3236; Pub. L. 107–204, title VI, § 604(c)(1)(B), July 30, 2002, 116 Stat. 796; Pub. L. 111–203, title IX, §§ 925(a)(2), 929F(a), 975(a)–(e), July 21, 2010, 124 Stat. 1850, 1853, 1915–1921; Pub. L. 117–263, div. E, title LVIII, § 5823(a), Dec. 23, 2022, 136 Stat. 3427.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsecs. (a)(3), (b)(2), (7), (c)(6)(C), (8), and (d), was in the original “this title”. See References in Text note set out under section 78a of this title.

Section 78o–3(b)(7) of this title, referred to in subsec. (c)(9)(B), was in the original “section 15A(7)”, and was translated as meaning section 15A(b)(7) of act June 6, 1934, to reflect the probable intent of Congress.

The Investment Advisers Act of 1940, referred to in subsec. (e)(4)(C), is title II of act Aug. 22, 1940, ch. 686, 54 Stat. 847, which is classified generally to subchapter II (§ 80b–1 et seq.) of chapter 2D of this title. For complete classification of this Act to the Code, see section 80b–20 of this title and Tables.

The Commodity Exchange Act, referred to in subsec. (e)(4)(C), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, which is classified generally to chapter 1 (§ 1 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see section 1 of Title 7 and Tables.

### Amendments

2022—Subsec. (b)(8). Pub. L. 117–263 added par. (8).

2010—Subsec. (a)(1). Pub. L. 111–203, § 975(a)(1), designated existing provisions as subpar. (A) and added subpar. (B).

Subsec. (a)(2), (3). Pub. L. 111–203, § 975(a)(2), (3), inserted “or municipal advisor” after “municipal securities dealer” wherever appearing.

Subsec. (a)(4). Pub. L. 111–203, § 975(a)(4), substituted “dealer, municipal securities dealer, or municipal advisor, or class of brokers, dealers, municipal securities dealers, or municipal advisors” for “dealer, or municipal securities dealer or class of brokers, dealers, or municipal securities dealers”.

Subsec. (a)(5). Pub. L. 111–203, § 975(a)(5), added par. (5).

Subsec. (b)(1). Pub. L. 111–203, § 975(b)(1)(C), which directed amendment of third sentence by striking out “initial”, was executed in fourth sentence by striking out “initial” after “office of the” and after “such”, to reflect the probable intent of Congress.

Pub. L. 111–203, § 975(b)(1)(B), added second and third sentences and struck out former second sentence which read as follows: “The initial members of the Board shall serve as members for a term of two years, and shall consist of (A) five individuals who are not associated with any broker, dealer, or municipal securities dealer (other than by reason of being under common control with, or indirectly controlling, any broker or dealer which is not a municipal securities broker or municipal securities dealer), at least one of whom shall be representative of investors in municipal securities, and at least one of whom shall be representative of issuers of municipal securities (which members are hereinafter referred to as ‘public representatives’); (B) five individuals who are associated with and representative of municipal securities brokers and municipal securities dealers which are not banks or subsidiaries or departments or divisions of banks (which members are hereinafter referred to as ‘broker-dealer representatives’); and (C) five individuals who are associated with and representative of municipal securities dealers which are banks or subsidiaries or departments or divisions of banks (which members are hereinafter referred to as ‘bank representatives’).”

Pub. L. 111–203, § 975(b)(1)(A), in first sentence, substituted “The Municipal Securities Rulemaking Board shall be composed of 15 members, or such other number of members as specified by rules of the Board pursuant to paragraph (2)(B),” for “Not later than one hundred twenty days after June 4, 1975, the Commission shall establish a Municipal Securities Rulemaking Board (hereinafter in this section referred to as the ‘Board’), to be composed initially of fifteen members appointed by the Commission”.

Subsec. (b)(2). Pub. L. 111–203, § 975(b)(2)(A), in introductory provisions, inserted “and advice provided to or on behalf of municipal entities or obligated persons by brokers, dealers, municipal securities dealers, and municipal advisors with respect to municipal financial products, the issuance of municipal securities, and solicitations of municipal entities or obligated persons undertaken by brokers, dealers, municipal securities dealers, and municipal advisors” before period at end of first sentence and struck out “(Such rules are hereinafter collectively referred to in this chapter as ‘rules of the Board’.)” before “The rules”.

Subsec. (b)(2)(A). Pub. L. 111–203, § 975(b)(2)(B), in introductory provisions, inserted “, and no broker, dealer, municipal securities dealer, or municipal advisor shall provide advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal securities,” after “sale of, any municipal security” and “and municipal entities or obligated persons” after “protection of investors”, in cl. (i), substituted “municipal securities brokers, municipal securities dealers, and municipal advisors” for “municipal securities brokers and municipal securities dealers” in two places, in cl. (ii), inserted “and” at end, in cl. (iii), substituted period for “; and” at end, and struck out cl. (iv) which read as follows: “provide that persons in any such class other than municipal securities brokers and municipal securities dealers and partners, officers, and supervisory employees of municipal securities brokers or municipal securities dealers, may be qualified solely on the basis of compliance with such standards of training and such other qualifications as the Board finds appropriate.”

Subsec. (b)(2)(B). Pub. L. 111–203, § 975(b)(2)(C), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “establish fair procedures for the nomination and election of members of the Board and assure fair representation in such nominations and elections of municipal securities brokers and municipal securities dealers. Such rules shall provide that the membership of the Board shall at all times be equally divided among public representatives, broker-dealer representatives, and bank representatives, and that the public representatives shall be subject to approval by the Commission to assure that no one of them is associated with any broker, dealer, or municipal securities dealer (other than by reason of being under common control with, or indirectly controlling, any broker or dealer which is not a municipal securities broker or municipal securities dealer) and that at least one is representative of investors in municipal securities and at least one is representative of issuers of municipal securities. Such rules shall also specify the term members shall serve and may increase the number of members which shall constitute the whole Board provided that such number is an odd number.”

Subsec. (b)(2)(C). Pub. L. 111–203, § 975(b)(2)(D), inserted “and municipal financial products” after “municipal securities” the first two places appearing and “, municipal entities, obligated persons,” after “to protect investors” and substituted “among customers, municipal entities, obligated persons, municipal securities brokers, municipal securities dealers, or municipal advisors,” for “between customers, issuers, municipal securities brokers, or municipal securities dealers,” and “brokers, municipal securities dealers, or municipal advisors, to regulate” for “brokers or municipal securities dealers, to regulate”.

Subsec. (b)(2)(D). Pub. L. 111–203, § 975(b)(2)(E), inserted “and advice concerning municipal financial products” after “transactions in municipal securities” and “municipal advisor,” before “or person associated” and substituted “that no” for “That no” and “a municipal securities broker, municipal securities dealer, or municipal advisor may be compelled” for “a municipal securities broker or municipal securities dealer may be compelled”.

Subsec. (b)(2)(E). Pub. L. 111–203, § 975(b)(2)(F), substituted “municipal securities brokers, municipal securities dealers, and municipal advisors” for “municipal securities brokers and municipal securities dealers” and “municipal securities broker, municipal securities dealer, or municipal advisor” for “municipal securities broker or municipal securities dealer”.

Subsec. (b)(2)(G). Pub. L. 111–203, § 975(b)(2)(G), substituted “municipal securities brokers, municipal securities dealers, and municipal advisors” for “municipal securities brokers and municipal securities dealers”.

Subsec. (b)(2)(J). Pub. L. 111–203, § 975(b)(2)(H), substituted “each municipal securities broker, municipal securities dealer, and municipal advisor” for “each municipal securities broker and each municipal securities dealer” and inserted “, which may include charges for failure to submit to the Board, or to any information system operated by the Board, within the prescribed timeframes, any items of information or documents required to be submitted under any rule issued by the Board” after “such fees and charges”.

Subsec. (b)(2)(K). Pub. L. 111–203, § 975(b)(2)(I), substituted “a related account of a broker, dealer, or municipal securities dealer” for “a municipal securities investment portfolio” and substituted “any broker, dealer, or municipal securities dealer” for “any municipal securities dealer” in two places.

Subsec. (b)(2)(L). Pub. L. 111–203, § 975(b)(2)(J), added subpar. (L).

Subsec. (b)(3) to (5), (7). Pub. L. 111–203, § 975(b)(3), (4), added pars. (3) to (5) and redesignated former par. (3) as (7).

Subsec. (c)(1). Pub. L. 111–203, § 975(c)(1), (2), inserted “, and no broker, dealer, municipal securities dealer, or municipal advisor shall make use of the mails or any means or instrumentality of interstate commerce to provide advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products, the issuance of municipal securities, or to undertake a solicitation of a municipal entity or obligated person,” after “any municipal security” and inserted at end “A municipal advisor and any person associated with such municipal advisor shall be deemed to have a fiduciary duty to any municipal entity for whom such municipal advisor acts as a municipal advisor, and no municipal advisor may engage in any act, practice, or course of business which is not consistent with a municipal advisor’s fiduciary duty or that is in contravention of any rule of the Board.”

Subsec. (c)(2). Pub. L. 111–203, § 975(c)(3), inserted “or municipal advisor” after “municipal securities dealer” in two places.

Subsec. (c)(3). Pub. L. 111–203, § 975(c)(4), inserted “or municipal entities or obligated person” after “protection of investors” in two places and “or municipal advisor” after “municipal securities dealer” wherever appearing.

Subsec. (c)(4). Pub. L. 111–203, § 975(c)(5), which directed amendment of par. (4) by inserting “or municipal advisor” after “municipal securities dealer or obligated person” each place that term appears, could not be executed because such term does not appear.

Pub. L. 111–203, § 925(a)(2), substituted “12 months or bar any such person from being associated with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization,” for “twelve months or bar any such person from being associated with a municipal securities dealer,”.

Subsec. (c)(6)(B). Pub. L. 111–203, § 975(c)(6), inserted “or municipal entities or obligated person” after “protection of investors”.

Subsec. (c)(7)(A)(iii). Pub. L. 111–203, § 975(c)(7)(A), added cl. (iii).

Subsec. (c)(7)(B). Pub. L. 111–203, § 975(c)(7)(B), inserted “or municipal entities or obligated person” after “protection of investors”.

Subsec. (c)(8). Pub. L. 111–203, § 929F(a), substituted “any person who is, or at the time of the alleged violation or abuse was, a member or employee” for “any member or employee”.

Subsec. (c)(9). Pub. L. 111–203, § 975(c)(8), added par. (9).

Subsec. (d)(2). Pub. L. 111–203, § 975(d)(2), which directed amendment of par. (2) by inserting “or municipal advisors” before “to furnish”, was executed by making the insertion before “to furnish” the second place appearing, to reflect the probable intent of Congress.

Pub. L. 111–203, § 975(d)(1), substituted “through a municipal securities broker, municipal securities dealer, municipal advisor, or otherwise” for “through a municipal securities broker or municipal securities dealer or otherwise”.

Subsec. (e). Pub. L. 111–203, § 975(e), added subsec. (e).

2002—Subsec. (c)(2), (4). Pub. L. 107–204 substituted “, or is subject to an order or finding,” for “or omission” and “(H), or (G)” for “or (G)”.

1998—Subsec. (c)(4). Pub. L. 105–353 substituted “convicted of any offense” for “convicted by any offense” in first sentence.

1990—Subsec. (c)(2), (4). Pub. L. 101–550 substituted “(A), (D), (E), or (G)” for “(A), (D), or (E)”.

Subsec. (c)(6)(A). Pub. L. 101–429 substituted “, the nature” for “and the nature” and “proposed action, and whether the Commission is seeking a monetary penalty against such municipal securities dealer or such associated person pursuant to section 78u–2 of this title; and” for “proposed action and”.

1987—Subsec. (b)(2)(C). Pub. L. 100–181, § 318, substituted “municipal securities dealers, to regulate” for “municipal security dealers, to regulate” “purposes of this chapter” for “purposes of this chapter or the securities”, and “burden on competition” for “burden or competition”.

Subsec. (c)(4). Pub. L. 100–181, § 319, substituted new first sentence for former first sentence which read as follows: “The Commission, by order, shall censure any person associated, or seeking to become associated with, a municipal securities dealer or suspend for a period not exceeding twelve months or bar any such person from being associated with a municipal securities dealer, if the Commission finds, on the record after notice and opportunity for hearing, that such censure, suspension, or bar is in the public interest and that such person has committed or omitted any act or omission enumerated in subparagraph (A), (D), or (E) of paragraph (4) of section 78o(b) of this title, has been convicted of any offense specified in subparagraph (B) of such paragraph (4) within ten years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4).”

Subsec. (c)(6)(A). Pub. L. 100–181, § 320, substituted “Board” for “board”.

1983—Subsec. (b)(1)(A). Pub. L. 98–38, § 4(a), inserted “(other than by reason of being under common control with, or indirectly controlling, any broker or dealer which is not a municipal securities broker or municipal securities dealer)” after “securities dealer”.

Subsec. (b)(2)(B). Pub. L. 98–38, § 4(b), inserted “(other than by reason of being under common control with, or indirectly controlling, any broker or dealer which is not a municipal securities broker or municipal securities dealer)” after “broker, dealer, or municipal securities dealer”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by sections 925(a)(2) and 929F(a) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.

Amendment by section 975(a)–(e) of Pub. L. 111–203 effective Oct. 1, 2010, see section 975(i) of Pub. L. 111–203, set out as a note under section 78o of this title.

### Effective Date of 1990 Amendment

Amendment by Pub. L. 101–429 effective Oct. 15, 1990, with provisions relating to civil penalties and accounting and disgorgement, see section 1(c)(1), (2) of Pub. L. 101–429, set out in a note under section 77g of this title.

### Effective Date

Section effective June 4, 1975, except for subsec. (a) which is effective 180 days after June 4, 1975, see section 31(a) of Pub. L. 94–29, set out as a note under section 78b of this title.

### Rulemaking

Pub. L. 117–263, div. E, title LVIII, § 5823(b), Dec. 23, 2022, 136 Stat. 3428, provided that: In general.—Not later than 2 years after the date on which final rules are promulgated under section 124(b)(2) of the Financial Stability Act of 2010 [12 U.S.C. 5334(b)(2)], as added by section 5811(a) of this title, the Securities and Exchange Commission shall issue rules to adopt the data standards required under paragraph (8) of section 15B(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–4(b)), as added by subsection (a) of this section. Scaling of regulatory requirements; minimizing disruption.—In issuing the rules described in paragraph (1) that adopt the data standards described in that paragraph, the Securities and Exchange Commission— may scale those data standards in order to reduce any unjustified burden on smaller regulated entities; and shall seek to minimize disruptive changes to the persons affected by those rules.”

### Rule of Construction—No New Disclosure Requirements

Amendment by Pub. L. 117–263 not to be construed to require certain additional information to be collected or disclosed, see section 5826 of Pub. L. 117–263, set out as a note under section 77g of this title.