The Securities and Exchange Commission recently issued proposed rules (the Proposed Rules)* that define who must register as a “Municipal Advisor” under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), establish a permanent registration regime for Municipal Advisors and impose certain recordkeeping requirements on Municipal Advisors. Dodd-Frank also granted the Municipal Securities Rulemaking Board (MSRB) regulatory authority over Municipal Advisors and imposed upon Municipal Advisors a fiduciary duty when advising Municipal Entities (defined below). Registration requirements for the MSRB are in addition to registration requirements for the SEC.

The Proposed Rules broaden the definition of Municipal Advisor and the activities that constitute Municipal Advisory Activities (defined below). The Proposed Rules should be of particular interest to persons engaging in any activity with Municipal Entities because the broad definition of Municipal Advisory Activities may require registration with the SEC as a Municipal Advisor, both by entities currently registered with government regulators with respect to other activities (such as certain investment advisers that are registered with the SEC) and by entities currently not registered with any government regulators. Indeed, certain activities that previously were performed by registered investment advisers may now require such advisers to also register as Municipal Advisors.