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Federal Register / Vol. 86, No. 159 / Friday, August 20, 2021 / Notices entering into an agreement to undertake a solicitation and annually thereafter during the course of the agreement. BDA
asserts that municipal advisors are already providing such notifications as part of the municipal advisor engagement letter. While this comment is outside the scope of the current proposal, MSRB notes the MSRBs municipal advisory client brochure summarizes key principles of the MSRB
rules designed to protect municipal advisory clients as well as information on how on how to file a complaint against a municipal advisor with the appropriate federal regulatory authorityinformation that is not customarily provided as part of the municipal advisor engagement letter.
The MSRB continues to believe that requiring municipal advisors to provide the Rule G10 notifications to municipal advisory clients creates an awareness of the protections afforded by the regulatory framework governing municipal advisory activities.

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Exclusion of SMMPs The MSRB sought comment on whether to exclude SMMPs from receiving the required notifications, so long as dealers provide such notifications on their websites website-only notifications. Both ASA and SIFMA specifically expressed support for the draft amendments, indicating that the placement of the notifications on dealers websites is also in keeping with the modern approach to seek and find electronic resources on dealers websites, and provides adequate notice to SMMPs. SIFMA
remarked that SMMPs are, by definition, sophisticated investors that should not require hand-holding in order to find information on the investor brochure on the dealers website, or elsewhere, or to otherwise require guidance as to how to file a complaint with the appropriate regulatory authority. SIFMA also noted that placement of the customer notifications on dealers websites provides adequate notice to SMMPs that have engaged in a municipal securities transaction or that maintain a municipal securities position.
The MSRB has had the opportunity to evaluate the implementation of the requirement to provide notifications once every calendar year, which was adopted in 2017,21 has considered these comments as well as recent stakeholder comments,22 and has determined that allowing dealers to make the required 21 See 22 See
supra note 4.
supra note 7.

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notifications available on their websites is appropriate for SMMP customers.

Website-Only Notifications for All Customers
Dealer Notifications to Issuer Clients Who Are Not Represented by Municipal Advisors
The proposed amendments to Rule G
10 exclude the required notifications to customers that have not, and may never, engage in municipal securities transactions, so long as the dealer has the notifications available to such customers on its website. Szaro and ASA suggested removing the requirement for the notifications to be remitted to customers of the dealer who effected a transaction in municipal securities or who held a municipal securities position in favor of making such notifications available to all customers by having the notifications available only on the dealers website.
Szaro and ASA stated that customers today prefer to review information about dealers from dealers websites and that individualized annual notifications could be eliminated without threatening investor protections.
The MSRB believes that the proposed rule change strikes the correct balance by requiring the notifications only to those customers who would most benefit by their receipt i.e., customers of the dealer who effected a transaction in municipal securities or who hold a municipal securities position and permitting the notifications to be available to all customers on a dealers website. Moreover, the MSRB believes that receipt of such push notifications is in furtherance of investor protection, and that such information would not be as easily ascertained by a customer having to undergo a search for the information on a dealers website.23

The MSRB sought comment on whether an issuer in transactions involving the sale by the issuer of a new issue of its securities who are not otherwise represented by a municipal advisor should receive the required notifications from dealers. BDA and SIFMA commented, arguing strongly against providing such notifications to such issuers, noting that dealer disclosures to issuers in transactions involving the sale by the issuer of a new issue of its securities are made in the Bond Purchase Agreement and engagement letters and that requiring the annual notifications will add to the complexity of dealer compliance without greater benefit to such issuer.
SIFMA further opined that any such required notifications should be made in the context of underwriter disclosures, under Rule G17. After review of the comments, the MSRB has determined not to place the additional requirement on dealers to provide the required notifications to such issuers who are not otherwise represented by municipal advisors.
529 Plan Customers The MSRB sought comment on whether to provide an exception to the notifications requirement that excludes investors in 529 savings plans from receipt of ongoing notifications after their initial purchase of units in a 529
savings plan. SIFMA indicated support for the draft amendments to exclude ongoing notifications to investors of 529
savings plan. The Szaro letter noted that providing the required notifications to such customers entails dealer work and expenses that are not balanced proportionately to the benefit to a customer in receiving the information.
SIFMA and Szaro both favored websiteonly notifications as a sensible and reasonable option for dealers who have websites. Given that 529 savings plans and other municipal fund securities are offered and serviced as a benefit to customers that typically hold other securities in their brokerage accounts, unintended operational challenges may be introduced by establishing a different requirement for the delivery of the required notifications for municipal fund securities. In reviewing the comments received, the MSRB does not believe there is compelling information to warrant a change from the current requirements under Rule G10.

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Clarify Timeframe for Delivery of Notifications SIFMA and BDA stated that the MSRB
should clarify the timeframe for delivery of the annual notifications by modifying the draft proposed rule language from once every calendar year to prescribe that delivery of such notifications should be made at least annually or at least once a year. BDA noted that the change in the delivery timeframe would reduce dealer printing burdens as they may couple these notifications with other required disclosures.
The MSRB acknowledges that it has previously indicated in the form of FAQs 24 that the obligation to provide 23 SIFMA suggested extending website-only notifications delivery to municipal advisory clients.
As previously mentioned, the MSRB limited the scope of the RFC to dealer obligations to their customers and is not modifying municipal advisors obligations under the Rule G10.
24 See FAQs on MSRB Rules on Investor and Municipal Advisory Client Education and Protection September 2017.

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