Municipal advisors’ passing scores on a principal pilot exam were “far greater” than on past pilots, just as MAs are about to officially take the exams this fall.
MAs will begin taking their Series 54 tests in November after the pilot wrapped up in August, said Gail Marshall, MSRB chief compliance officer. Marshall announced the strong scores at a National Association of Municipal Advisors conference on Thursday. They will have until November 2020 to complete the exam, which is a requirement for any professional designated as a "principal" at his or her firm.
Nearly 600 people representing 250 firms took the pilot, Bri Joiner, MSRB’s director of professional qualifications told The Bond Buyer.
“The percent of people that passed our pilot is really a testament to this community because it is far greater than on other exams in the pilot program and just a testament to people really volunteering and studying and taking the pilot seriously,” Marshall said at the conference.
The MSRB will be submitting a rule filing and posting the content outline along with the required passing score next week. They will also be sending emails to the pilot examiners, letting them know who failed or passed.
Last year, the MSRB asked the SEC to approve a rule change to require MA principals to take the Series 54 exam. All MAs have to pass a Series 50 test. The ability of MAs to qualify as principals is important because the MSRB’s supervision rule for muni advisors requires that at least one person at a firm be designated a principal and be responsible for supervising the firm’s other professionals.
However, the number of principals qualified will not be posted on the MSRB’s website, Marshall told The Bond Buyer. Currently, the number of registered professional MA representatives is listed.
“Unless we hear strongly from the MA community, we feel, and we think people agree with us that it would be more prejudicial than informative,” Marshall said. “A small firm of 10 MAs could choose to have five people to take the 54 because they want to share responsibilities with supervising.”
Marshall said she wouldn’t want participants to make the wrong analysis that the more supervisors would make for a better firm. MSRB Rule G-44 requires MAs to maintain a supervisory system “reasonably designed” to achieve compliance.
MAs will pay $265 to take the exam, of which $150 will go to the MSRB.
At the NAMA conference panel, Marshall also answered questions about recent staff turnover at the MSRB.
Over the last couple of months its President and CEO Lynnette Kelly announced her retirement and General Counsel Michael Post, Chief Regulatory Officer Lanny Schwartz and Chief Communications Officer Jennifer Galloway left the MSRB.
Its new board chair Edward Sisk said he plans to focus on the governance of the board amid focuses on technology and a continued retrospective rule review.
“While we have staff turnover, it doesn’t stop all the staff that is there from keeping the lights on and working on that mission,” Marshall said.
Marshall added that there were no “gaps” in the MSRB staff.
