municipal advisors

MSRB Creates Supervision and Compliance Requirements for Municipal Advisors

On October 23, the Municipal Securities Rulemaking Board received approval from the SEC to create the first new rule for municipal advisors since the SEC released its final registration rule for these professionals in September 2013.

The new supervision requirements take effect April 23, 2015, providing firms six months to implement the required policies and procedures. By April 23, 2016, the chief executive officers (or the equivalent) of municipal advisor firms must make the first of their annual certifications in writing that the municipal advisor has in place processes to establish, maintain, review, test and modify written compliance procedures and written supervisory procedures reasonably designed to achieve compliance with applicable rules.  MSRB Rule.

SEC Approves Registration Rules for Municipal Advisors

On September 18, the SEC unanimously adopted permanent registration rules for municipal advisors as required by the Dodd-Frank Act.  The new rule requires an advisor to permanently register with the SEC if it provides advice to state and local governments on the issuance of municipal securities, about certain “investment strategies,” or on municipal derivatives.  The new rules will supersede current temporary registration rules and will become effective 60 days after they are published in the Federal Register.  Press Release.

MSRB Concept Release on Disclosure of Financial Incentives

On May 31, the MSRB published a concept release seeking comment on a possible proposal to require underwriters and municipal advisors to disclose whether they have made or received certain payments in connection with new issues of municipal securities. Comments must be submitted no later than July 31, 2012. MSRB Concept Release.

MSRB Proposed Rule on Municipal Advisor Supervision

On May 25, MSRB proposed Rule G-44 requiring municipal advisors to adopt internal supervisory systems to ensure compliance with applicable MSRB and SEC rules. The proposed rule would establish minimum requirements for such systems, including the manner in which municipal advisory activities will be monitored and supervised. Comments must be submitted by June 24. MSRB Release. Proposed Rule.

MSRB Municipal Advisor Rules

On February 14, the MSRB (i) filed with the SEC a proposal to require municipal advisors to notify the MSRB when the advisor ceases to engage in municipal advisory activities and (ii) issued proposals to establish a new municipal advisor fiduciary rule, and provide further guidance to municipal advisors, broker-dealers and banks on fair dealing obligations. Proposed Notification Rule Release. Proposed Fiduciary Duty Rule and Fair Dealing Obligations Release.