There is a new category of registration, “Municipal Securities Sales Limited Representative,” and new exam requirements for Municipal Securities Representatives. They say this is in response to changes in the Series 7. MSRB believes there is no longer enough material on that test to qualify reps to do more than buy/sell m...unis. Any more complicated business must be done by a Municipal Securities Representative and MSRB has a new exam for that registration. Those who took the 7 before Nov. 1, 2011, are grandfathered in to that category.

In summary, anyone who had his Series 7 prior to 11-7-11 may continue doing what he’d doing without any action (however, see the reminder below for something you as compliance officer should consider). Folks who want to do muni business but who are not now 7-licensed will decide which category they fit into, and will have to take the new 52 if their muni activities are more complicated than just sales.

As of 11-7-11:

1. To be a Municipal Securities Sales Limited Representative, you have to take or already have the Series 7. This means the only muni business you can do is affecting sales to and purchases from customers of municipal securities. You may not perform other functions related to activities such as underwriting, trading, research or investment advice unless you qualify as an MSR—see below.

2. To be a Municipal Securities Representative (MSR), you have to pass the new Municipal Securities Representative Qualification Examination (Series 52)—UNLESS you had your Series 7 before 11-7-11. As an MSR, you may do more than just sales/purchases of muni securities. P.S. If you let your Series 7 lapse, you will have to take the Series 52 in the future to qualify as an MSR.

3. If the only muni securities you transact in are Municipal Fund Securities, and you hold a Series 6, no change. You are considered a Municipal Securities Representative qualified by virtue of being a Limited Representative – Investment Company and Variable Contracts Products.

Excerpts from MSRB Notice 2011-62:

While the MSRB views the Series 7 examination as an acceptable qualification exam for professionals whose activities are limited to purchases and sales to customers of a range of securities products, including municipal securities, dealers should consider whether passage of the Series 52 examination might be more appropriate for persons engaged predominantly or exclusively in municipal securities activities (including municipal securities sales activities), or who engage in sales of more complex municipal securities, given the Series 52 examination’s more comprehensive coverage of municipal securities as compared to the Series 7 examination.

Supervision: Transaction activities of Municipal Securities Sales Limited Representatives may be supervised by a Municipal Securities Principal, Municipal Securities Sales Principal, or, as long as the supervision pertains only to transactions in municipal fund securities, a Municipal Fund Securities Limited Principal. A General Securities Principal may not take responsibility for conducting supervisory activities such as the daily review and approval of Municipal Securities Sales Limited Representatives’ customer transactions.

Please read MSRB Notice 2011-62 for more important details on this topic, including supervision.