SEC Approves Amendments to MSRB Rule G-26 on Customer Account Transfers

The Municipal Securities Rulemaking Board (MSRB) received approval from the Securities and Exchange Commission (SEC) on July 27, 2017, to amend MSRB G-26, on customer account transfers, to modernize the rule and promote a uniform customer account transfer standard for all brokers, dealers, municipal securities brokers and municipal securities dealers (collectively, “dealers”).

The amendments will be effective on January 29, 2018.

The MSRB began an initiative to consider revisions to Rule G-26 as a result of a broader retrospective review of its uniform practice rules.

 Rule G-26 requires dealers to cooperate in the transfer of customer accounts and specifies procedures for carrying out the transfer process. The MSRB adopted Rule G-26 in 1986 as part of an industry-wide initiative to create a uniform customer account transfer standard by applying a customer account transfer procedure to all dealers that are engaged in municipal securities activities.

The uniform standard for all customer account transfers is largely driven by the National Securities Clearing Corporation’s (NSCC) Automated Customer Account Transfer Service (ACATS).

The amendments to Rule G-26 will modernize the rule and promote a uniform customer account transfer standard for all dealers. By including certain provisions parallel to the customer account transfer rules of other SROs in amended Rule G-26, the transfer of customer securities account assets will be more flexible, less burdensome, and more efficient, while reducing confusion and risk to investors and allowing them to better move their municipal securities to their dealer of choice.

Additional background material on, and a detailed description of the amendments to, Rule G-26 are included in the following:

• • SEC Approval Order (July 27, 2017)
• • MSRB Response to Comments (July 20, 2017)
• • MSRB Filing of Proposed Rule Change (May 26, 2017)