Ronald W. Smith
Corporate Secretary
Municipal Securities Rulemaking Board
1300 I Street NW
Suite 1000
Washington, DC 20005

Re: MSRB Notice 2018-19: Request for Comment on Draft Frequently Asked Questions Regarding Use of Social Media Under MSRB Advertising Rules

Dear Mr. Smith:

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates this opportunity to respond to Notice 2018-19 2 (the “Notice”) issued by the Municipal Securities Rulemaking Board (the “MSRB”) in which the MSRB requests comment on draft set of frequently asked questions (“FAQs”) regarding the use of social media by brokers, dealers or municipal securities dealers (collectively, “dealers”), as part of their municipal securities activities, or municipal advisors, as part of their municipal advisory activities. These draft FAQs seek to illustrate the application to social media of MSRB G-21, on advertising by dealers, and of MSRB Rule G-40, on advertising by municipal advisors (Rule G-21, together with Rule G40, the “advertising rules”). SIFMA and its members appreciate the MSRB’s efforts to provide further guidance on the advertising rules. SIFMA feels that guidance in the form of examples is generally helpful, and overall the guidance is generally clear. We do have comments and a few suggestions for further clarifications as set forth below.

I. Harmonization of MSRB Advertising Rules and Further Rulemaking

SIFMA feels that the proposed responses to the FAQs are generally helpful and are somewhat harmonized with the FINRA and SEC rules on social media. We do not have any suggestions at this time for additional questions that need to be addressed relating to a regulated entity’s use of social media under the MSRB’s advertising rules, however, we do have issues with the current FAQ as set forth below. We strongly feel that the rules and associated guidance need to be simple, and for that reason we do not support developing separate social medial guidance for dealers and municipal advisors. SIFMA and its members do not feel there are any distinctions in how dealers and municipal advisors use social media that may warrant deviating from the social media guidance that has been provided by the other financial regulators. Harmonization of the MSRB rules with those of the other financial regulators is critical to our members on a subject, such as advertising and social media, that is not product specific. SIFMA and its members do not believe that the MSRB should amend its rules to prescriptively address social media usage, rather than providing guidance in the form of FAQs. Further rule amendments are not necessary in this instance, as the general advertising rule is seen to sufficiently cover such matters as books and records. Finally, other than clarifying the points set forth below, SIFMA believes that the MSRB does not need to provide additional guidance or amend its rules to address the supervisory issues pertaining to social media at this time. Again, SIFMA and its members feel that the MSRB advertising rules sufficiently address this matter as they largely use the same analysis as FINRA, and our suggestions below request further harmonization. The most significant issue with the MSRB FAQs is that they fail to adopt the concepts of static content and interactive content or correspondence as described in FINRA 10-063. The current language of the MSRB FAQ could be interpreted to require pre-approval of almost any use of social media. Under the FINRA guidance, static content requires supervisor pre-approval, and interactive content does not require preapproval. Therefore, FAQ 1 should be amended and clarified to incorporate these concepts. “Chats” are interactive and should be treated like correspondence. “Posts” could be either static or interactive, and would need to be analyzed under this rubric. A distinction should be made, as in the FINRA guidance, between static content and interactive content, such as correspondence. In this MSRB FAQ, as in the FINRA guidance, MSRB should apply a risk based post-review approach similar to any correspondence, such as email.

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