On March 18th, the SEC warned firms that municipal securities rules prohibiting pay-to-play apply to affiliated financial professionals, not just a firm's employees. The pay-to-play rule, MSRB Rule G-37, generally prohibits firms from underwriting municipal bonds for an issuer for two years after a municipal finance professional ("MFP") involved with that firm makes a campaign contribution to an elected official of that municipality. In a Report of Investigation, the SEC makes clear that an executive who supervises the activities of a broker, dealer, or municipal securities dealer is not exempt from the MSRB's pay-to-play rule just because he or she may be outside the firm's corporate governance structure. The executive may be deemed an MFP even if he or she is not part of a broker-dealer, but oversees the broker-dealer from a position within the holding company. SEC Press Release.