Sponsor
John Neely Kennedy
Senator · R-LA
Senator · R-LA
Official title: Amend the Securities Exchange Act of 1934 to clarify the composition of the membership of the Municipal Securities Rulemaking Board, and for other purposes.
Introduced February 26, 2026 by John Neely Kennedy · Last progress February 26, 2026
The bill improves investor protections, municipal-advice quality, and public access to standardized municipal market data, but it raises compliance and data-access costs for financial firms (with disproportionate burden on small advisors) and creates risks to MSRB independence through changes in Board composition and SEC appointment power.
Investors, municipal issuers, and the public will gain more transparent, standardized, and accessible municipal market data because the MSRB can establish information repositories and the Commission will set data standards, reducing information asymmetries.
Municipal issuers, taxpayers, and investors will get stronger investor protections because the MSRB must adopt rules to prevent fraud and promote fair trading in the municipal market.
Municipal advisors (and therefore state and local governments that hire them) will face professional qualification and continuing education requirements, which should improve the quality of advice provided to municipal issuers.
Broker-dealers, banks, municipal advisors, and other financial firms will incur higher compliance costs (new qualifications, recordkeeping, exams, and fees), which could raise operating costs across the industry and ultimately be passed on to municipalities, investors, or taxpayers.
Shifting MSRB Board composition toward a regulated-industry majority and allowing the SEC to make interim appointments or removals could weaken Board independence and increase the risk of industry influence or politicized oversight of the municipal market.
Smaller municipal advisory firms are likely to be disproportionately burdened by new compliance requirements, risking reduced competition and loss of small-business advisors in the market.
Based on analysis of 4 sections of legislative text.
Rewrites MSRB statutory membership rules, setting Board size and precise minimums for regulated and public representatives and directing SEC appointments.
Rewrites the statutory rules that govern the Municipal Securities Rulemaking Board (MSRB), replacing the current Section 15B(b) of the Securities Exchange Act with a new, substantive membership and governance structure. It sets MSRB membership at 15 (or another odd number the SEC chooses), requires a majority of members be "regulated representatives" (people associated with broker‑dealers, municipal securities dealers, banks, or municipal advisors) with minimum counts for broker‑dealer, bank, and advisor representatives, and requires the remaining seats be "public representatives" with minimum investor, municipal entity, and public representation and five‑year affiliation limits. The SEC is directed to appoint an initial chair and members consistent with the new composition rules.