Municipal Advisers Must Register With the SEC by October 1
The Securities and Exchange Commission announced on September 2, 2010, that it has adopted a temporary rule requiring municipal advisors to register with the SEC by October 1, a deadline established by the newly-enacted Dodd-Frank Wall Street Reform and Consumer Protection Act.
Municipal advisors provide advice to state and local governments and other borrowers involved in the issuance of municipal securities. The advice typically relates to municipal derivatives, guaranteed investment contracts, investment strategies or the issuance of municipal securities. Municipal advisors also solicit business from a state or local government for a third party.
Municipal advisors can now access and complete the new registration form (Form MA-T) on the SEC’s website. Municipal advisors are encouraged to begin the registration process as soon as possible because of the impending registration deadline and the requirement that applicants first obtain an ID and password.
The SEC implemented the registration provision on an interim basis in order for municipal advisors to meet the new law’s October 1 registration deadline. The SEC expects to propose a permanent rule later this year.
Information filed by municipal advisors will be made publicly available on the SEC’s website by the registration deadline.
Subject to certain exemptions, the definition of municipal advisor under the Dodd-Frank Act includes financial advisors, guaranteed investment contract brokers, third-party marketers, placement agents, solicitors, finders, and certain swap advisors that provide municipal advisory services.
Form MA-T requires municipal advisors to provide identifying and contact information, and select from a list of municipal advisory activities in which they engage. Municipal advisors also are required to provide disciplinary history information similar to what the SEC obtains from registered broker-dealers and investment advisers. Municipal advisors will be required to amend the form whenever any identifying and contact information or disciplinary information has become inaccurate in any way, and whenever a municipal advisor wishes to withdraw from temporary registration.
This regulation is the first adopted by the SEC to implement the requirements of the Dodd-Frank Act.
The Commission and its staff have already taken several other actions stemming from the new law, including seeking public comment regarding the ongoing study of the obligations of brokers, dealers, and investment advisers; issuing guidance interpreting how the “value of the primary residence” should be determined for purposes of calculating an investor’s net worth; seeking public comment about various definitions in connection with over-the-counter derivatives; holding a staff roundtable, jointly with the CFTC staff, regarding the governance of clearing facilities and conflicts; and posting job announcements for many new positions required by the legislation, including 25 positions related to the new Office of Credit Ratings.
Check dodd-frank.com frequently for updates on the Dodd-Frank Act.
Contact Steve Quinlivan for more information.