Rule on Gifts and Gratuities

The Municipal Securities Rulemaking Board (MSRB) has proposed to the SEC a rule to amend regulations regarding gifts and gratuities, with the goal of having them conform to the National Association of Securities Dealers standards. The MSRB rules are meant to prevent municipal securities dealers from inducing other organizations in the muni market to do business with them by offering gifts and gratuities over $100 a year per person to employees of those organizations. The amendment would also limit the circumstances under which dealers may pay for or reimburse costs of training or education. Such gifts cannot be contingent on prearranged costs.