BDA today filed comments with the MSRB on their proposal to amend Rule G-27 related to supervision. BDA generally supported the proposal with additional suggestions.
The MSRB has proposed to clarify the definition of “structuring of public offerings or private placements” for the purpose of Rule G-27 and has proposed to lengthen the time certain employees can work remotely from locations other than their primary residences from 30 to 60 days.
The MSRB’s proposal seeks “to distinguish the function of final approval, commitment or other formal action on behalf of the dealer regarding the structuring of a municipal public or private offering (i.e., issuance of municipal securities), which generally would be deemed structuring activities, from certain functional work (e.g., performing debt modeling, financial analysis and numbers running)” according to the release.
Regarding remote supervision, “the Draft Amendments would extend the exclusion from less than 30 business days per calendar year to 60 business days or fewer per calendar year that associated persons would be able to work at locations, other than their primary residence, without subjecting such locations to the municipal branch office registration,” according to the release.
On the structuring proposal, BDA told the Board “we welcome the Board’s proposed definition of Structuring to provide clarity and consistency around the issue.” On the 60-day remote supervision proposal, we told the MSRB “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 location other than primary residence.”
FINRA has also indicated they are preparing amendments to their supervision rule, and we expect FINRA and the MSRB to coordinate additional changes to both rules. The current MSRB proposal is available here. BDA’s letter is available here.