Municipal Securities Regulation and Enforcement: 2024 Mid-Year Review

In the first half of 2024, the Financial Industry Regulatory Authority (FINRA) issued several fines and suspensions against participants in the municipal market, including for violations of its registration, reporting, disclosure, and testing requirements. The Securities and Exchange Commission (SEC) moved forward with litigation against municipal advisors for breaching their fiduciary duties and other federal securities law violations, including failure to register with the SEC and Municipal Securities Rulemaking Board (MSRB).

For its part, the MSRB continued to aim for more consistency in dealer regulations, amending MSRB Rule G-27 to harmonize certain supervision requirements with FINRA rules. The MSRB also amended Rule G-12 to facilitate the move for municipal securities transactions to a one-day settlement cycle, commonly referred to as “T+1,” and proposed shortening the reporting time for dealer transactions to the MSRB from 15 minutes to one minute.

At the end of June, the U.S. Supreme Court issued two important opinions. One eliminated the deference given to the SEC’s interpretations of federal securities laws, including possibly the SEC’s authority to adopt Rule 15c2-12. The second opinion requires the SEC to file its enforcement actions seeking civil penalties in federal court.

Read the Newsletter