Permanent SEC Registration Now Required for Municipal Advisors

In yet another move to pass a series of regulations required under the 2010 Dodd-Frank Act, the Securities and Exchange Commission (SEC) recently adopted a rule mandating permanent registration of municipal advisors with the agency. Shortly after the passage of the Dodd-Frank Act, the SEC had initiated a temporary rule requiring municipal advisors to register utilizing a new Form M-AT, which facilitated the registration process in order for such advisors to meet the deadline required under Dodd-Frank.

The general role of a municipal advisor is to provide advice to state and local governments, who regularly issue municipal bonds, on “how and when” to issue such bonds and how to invest proceeds from their sales. This new SEC regulation has been implemented to solidify the temporary registration rule and to address and mitigate through required disclosures, a number of conflicts of interest surrounding the activities of municipal advisors. The definition of a “municipal advisor” is also carefully considered under this new rule, which gives exemptions to certain municipal members engaged in financial activities under certain circumstances. This includes public officials and employees, as well as underwriters, registered investment advisers who provide advice for municipal investment proceeds, registered commodity trading advisers, attorneys, engineers, accountants, independent registered municipal advisers, swap dealers, and banks, under certain conditions. The rule will take effect 60 days from its publication in the Federal Register.

For more information on this topic, or for assistance on other compliance topics, please contact us at (619) 278-0020, or email us at info@corecls.com.