Like the Financial Industry Regulatory Authority (FINRA), the MSRB is a self-regulatory organization that is subject to oversight by the Securities and Exchange Commission (SEC).

[3] The MSRB is authorized to create rules designed "to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, and processing information with respect to, and facilitating transactions in municipal securities, to remove impediments to and perfect the mechanism of a free and open market in municipal securities, and, in general, to protect investors and the public interest.

The MSRB's investor protection rules also apply to state-operated 529 plans marketed by broker-dealers, as well as to the underwriting, sales and trading of Build America Bonds and other taxable municipal obligations.

In addition, the MSRB operates the Electronic Municipal Market Access (EMMA) system, which provides free on-line access to comprehensive municipal securities disclosure documents, trade prices, interest rate information, and market statistics.

Beginning on October 1, 2010, the MSRB will be recomposed to consist of a majority of independent public members and to include representatives of municipal advisors.