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SIFMA today released the following statement from Randy Snook, executive vice president, business policies and practices, after the Securities and Exchange Commission (SEC) voted on final rules governing municipal advisor registration:
“SIFMA supports the goals of the Dodd Frank municipal advisor legislation to bring previously unregulated municipal advisors under supervision and further protect municipalities. The SEC’s municipal advisor definition is a vital component of this reform and will enable the MSRB to move forward with rules on several important issues, such as conflicts of interest, political contributions and professional qualifications.
“SIFMA believes that regulating municipal advisors will further enhance the resiliency of the municipal market and protect investors. While we will review the final rules in detail with our members, we are encouraged to hear that the SEC seems to have tailored its municipal advisor definition to more closely align with Congressional intent. The establishment of clear and workable regulation will enhance investor confidence in municipal products and help ensure communities across America can access the capital they need for critical infrastructure projects that create jobs.
“Specifically, we are encouraged to hear that the SEC has expanded the underwriter exemption, though we will need to further review if this exemption is broad enough so as not to restrict traditional public finance investment banking activity. We also support the SEC’s effort to narrow its definition of investment strategies with regard to the investment of funds other than bond proceeds, and to exempt registered investment advisers and certain bank products and services. SIFMA commends the SEC for providing a phase-in period that will give firms the time they need to build out necessary processes and systems and allow the industry to ask for further guidance as needed.
“We look forward to reviewing the rules in more detail with our members, as they could have a significant effect on how communities across the U.S. access capital to build roads, schools, hospitals, and other critical infrastructure and investors’ ability to access a relatively safe investment option.”
