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Zorluk: OrtaRegulatory Entities and Self-Regulatory Organizations (SROs)

A retail investor notices that the Municipal Securities Rulemaking Board (MSRB) establishes regulations for securities firms engaging in municipal trading. If a non-bank broker-dealer violates an MSRB rule during a municipal bond underwriting, which entity is authorized to examine the firm and enforce compliance?

  1. Financial Industry Regulatory Authority (FINRA)Cevap
  2. B
    Municipal Securities Rulemaking Board (MSRB)
  3. C
    Federal Reserve Board (FRB)
  4. D
    Depository Trust & Clearing Corporation (DTCC)

Cevap

Financial Industry Regulatory Authority (FINRA)
Financial Industry Regulatory Authority (FINRA) is responsible for examining member broker-dealers and enforcing compliance with both FINRA rules and MSRB rules. The MSRB creates rules for municipal securities market participants but lacks statutory authority to conduct compliance examinations or issue disciplinary fines.

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1
Identify the rulemaking authority for municipal securities
The Municipal Securities Rulemaking Board (MSRB) creates rules governing municipal market broker-dealers and advisors.
Understanding regulatory framework boundaries.
2
Determine which entity enforces MSRB rules for non-bank broker-dealers
The MSRB has no statutory authority to inspect member firms or enforce its rules. Enforcement authority over non-bank broker-dealers is delegated to FINRA and the SEC.
Rulemaking and enforcement functions are divided between the MSRB and FINRA/SEC/bank regulators.

Anahtar Kavram

Division of Rulemaking and Enforcement Authority for Municipal Securities
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Konular

Regulatory Entities and Self-Regulatory Organizations (SROs)

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