09.05.2012The Securities and Exchange Commission's Office of Compliance Inspections and Examinations recently issued a National Examination Risk Alert on MSRB Rules G-37 and G-38. The Alert summarizes the observations of National Examination Program examiners, which have revealed a number of weaknesses regarding the supervision of MSRB pay-to-play prohibitions. Some of these issues include:
- Firms engaging in municipal securities business despite making prohibited contributions;
- Lack of required recordkeeping;
- Failure to file accurate Form G-37s; and
- Failure to establish or implement adequate supervisory procedures.