Governing.com ran a story titled “Why’s the SEC’s New Municipal Advisor Rule So Confusing?” Actually the new rule, although not yet finalized, is not confusing. There are resources for muniland participants to understand how it will be implemented and what responsibilities muni advisors have towards their clients. In fact, I have never seen a better rollout for a new regulatory effort.
Here is a roadmap:
As directed by Congress in the 2010 Dodd Frank legislation, the SEC published the definition of a municipal adviser last September. Over 1,100 municipal advisers have registered with the SEC and MSRB (registrations here including a downloadable list). Reuters detailed what happened last January:
After it was signed in 2010, the Dodd-Frank law ignited a fight over exactly who counts as a municipal adviser. The dispute lasted until the SEC approved a final definition in September, which allowed the MSRB to begin drafting regulations.
The code of conduct proposed on Thursday will serve as the nucleus of an extensive regulatory regimen encompassing the duties of solicitors, political contributions and examinations for advisers.
The proposal lays out advisers’ fiduciary duties and other responsibilities in representing clients’ interests. It suggests advisers have enough expertise to give advice, disclose conflicts of interest, document compensation and tell bond buyers about their affiliations.