SIE practice questionhardMSRB Enforcement
The MSRB has rulemaking authority for municipal securities but does NOT have enforcement authority. Who enforces MSRB rules for bank dealers?
- AState securities administrators
- BThe Municipal Securities Rulemaking Board itself through its compliance division
- CThe SEC and banking regulators (OCC, FDIC, Federal Reserve)✓ Correct answer
- DFINRA
Explanation
Why C — The SEC and banking regulators (OCC, FDIC, Federal Reserve)
The MSRB writes rules but cannot enforce them. Enforcement of MSRB rules is split: FINRA enforces rules for broker-dealers that deal in municipal securities, while the SEC and federal banking regulators (OCC, FDIC, Federal Reserve) enforce rules for bank dealers. This separation of rulemaking and enforcement is unique to the MSRB and is a frequently tested concept on the SIE exam.
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