Which statement is true about MSRB enforcement in general?

• A. The MSRB enforces all rules for bank dealers
• B. The MSRB enforces rules for broker-dealers
• C. The MSRB writes rules but cannot enforce them; enforcement is by other regulators
• D. The MSRB enforces rules for municipal issuers

Answer: (C)

The main idea is that MSRB acts as a rulemaker, not an enforcer. The Municipal Securities Rulemaking Board writes rules that govern broker-dealers and banks involved in municipal securities, but it does not have the power to bring enforcement actions itself. When a rule is violated, enforcement comes from regulators such as the Securities and Exchange Commission and other self-regulatory organizations (like FINRA) or state securities regulators. The MSRB does not regulate municipal issuers, and it does not enforce all rules for banks or broker-dealers itself. That combination—rulemaking without direct enforcement authority—is why the statement that MSRB writes rules but cannot enforce them, with enforcement by other regulators, is the correct one.