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MSRB Follows FINRA on Investment Suitability Rules

The Doss Firm

On March 11, 2013, the Municipal Securities Rulemaking Board (MSRB) asked for comments on its proposed changes to its suitability rule that would parallel the revisions FINRA made in its suitability rules in July 2012.

MSRB General Counsel Gary Goldsholle said “our goal is to align suitability jurisprudence as much as possible.”

Most notably, the MSRB wants to adopt FINRA’s broad definition of investment strategies, which includes recommendations to hold securities.

As with FINRA’s rule, the MSRB’s proposed revisions add specific factors that dealers must consider when recommending a transaction or investment strategy, such as the investor’s age, investment experience, time horizon, liquidity needs and risk tolerance.

The MSRB asks for comments to its proposal by May 6, 2013.

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