Appeal body upholds decision to deny exemptive relief under Municipal Securities Rulemaking Board (MSRB) Rule G-37 because the firm failed to implement compliance procedures sufficient to educate its municipal finance professionals (MFPs) regarding the provisions of the Rule and an MFP’s lack of understanding of the Rule is not a sufficient basis to grant an exemption.


February 28, 1997

 

A
Counsel for Firm X
Address

 

RE: Firm X MSRB Rule G-37 Exemption Request

 

Dear A:

 

The Fixed Income Committee of NASD Regulation, Inc. has reviewed your client’s appeal for exemptive relief and has determined to deny the request. The Committee found that the firm failed to implement compliance procedures sufficient to educate its municipal finance professionals regarding the particular provisions of the Rule, or otherwise prevent the occurrence of the contributions. The Committee also noted the MSRB’s guidance that a situation involving a lack of understanding by a municipal finance professional of Rule G-37 or any of its particular provisions is not sufficient to justify the granting of an exemption.

 

Very Truly Yours,

 

 

Alden S. Adkins
General Counsel

 

cc: Christopher A. Taylor, MSRB