S. 3935 — Municipal Securities Rulemaking Board Reform Act of 2026

This section revises the composition and governance of the Municipal Securities Rulemaking Board (MSRB), which develops rules for municipal securities brokers, dealers, and advisors under SEC oversight, by replacing subsection (b) of Section 15B of the Securities Exchange Act of 1934. The revised subsection (1) sets the board at 15 members (from 21), an odd number alterable by the SEC; (2) requires a majority to be regulated representatives associated with brokers, dealers, municipal securities dealers, or municipal advisors—including not fewer than 2 broker-dealer representatives (non-bank), 1 bank representative, and 2 advisor representatives—with the remainder public representatives (not associated with such entities in the prior 5 years), including not less than 1 investor representative, 1 municipal entity representative, and 1 general public representative, divided as evenly as possible while maintaining a regulated majority; (3) directs the SEC to appoint an initial board (and chairperson) within 180 days of enactment of the Municipal Securities Rulemaking Board Reform Act of 2026, with staggered initial terms of 1, 2, or 3 years and all subsequent 3-year terms; and (4) authorizes an interim board of up to 3 members prior to initial appointments and provides for SEC filling of vacancies.