SEC Delays Municipal Advisor Registration and Record-Keeping Obligations

The SEC has stayed the implementation date of its final rules establishing a permanent registration and record-keeping regime for municipal advisors until July 1, 2014. The new rules are required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Securities and Exchange Commission (the “SEC” or Commission”) adopted on September 20, 2013. The new rules should be examined closely by those who work with governmental entities in capacities that might touch upon providing financial advice to a municipality in order to determine if the new registration and record-keeping requirements apply.

The SEC also issued updated guidance for the new rules on January 10, 2014. The updated guidance includes important clarifications, including an explanation that registered investment advisors need not register when providing advice concerning municipal derivatives (including swaps) not connected with the issuance of municipal securities. The SEC guidance is available here.

On January 9, 2014, the Municipal Securities Rulemaking Board also released a draft Rule G-42, elaborating on the duties of a municipal advisor, including the fiduciary duties of a municipal advisor towards its municipal entity clients. The draft Rule G-42 is available here.

To review our prior alert discussing the new SEC rules, click here.

To read the full updated alert please click the PDF link above.

Understanding the requirements and impact of the new rules is an ongoing task; please contact us if you would like to discuss your concerns and whether the new requirements apply.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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