ICI Supports MSRB Advertising Rule Amendments

Washington, DC, September 22, 2006 - The Institute supports proposed amendments to the Municipal Securities Rulemaking Board's (MSRB) advertising rule, stating in a recent comment letter that the amendments strike the right balance by requiring advertisements about municipal fund securities, including 529 college savings plans, to include important information for investors, while providing flexibility to design advertisements in a way that effectively conveys this information.

Background

In 2005, MSRB adopted new advertising requirements that put into place standards for advertisements by brokers, dealers, and municipal securities dealers of municipal fund securities, including interests in 529 college savings plans. More recently, the MSRB sought comment on a series of amendments to Rule G-21 that would further harmonize the MSRB's advertising rule with the rules of the SEC and NASD. The draft amendments also would provide certain clarifications of and exceptions to existing standards that the MSRB believes would more closely tailor the provisions of the rule to the specific characteristics of the municipal fund securities market without reducing the investor protections afforded by the rule. 

ICI Position

In a recent comment letter, ICI applauds the MSRB for proposing amendments that make Rule G-21 more consistent with SEC and NASD advertising rules for mutual funds, stating that consistent regulation of advertising for similar investment products benefits investors because it avoids the potential for confusion that might result from viewing advertisements that differ in content due to differences in regulations.

The Institute particularly supports the proposed amendments that clarify the MSRB's intent to provide flexibility with respect to certain required basic disclosures and tax-related disclosures. ICI also supports the MSRB's proposal to permit generic advertisements and blind advertisements, but recommends certain clarifications to these provisions.

Related Links
A section of this website is devoted to disclosure requirements for advertisements.