The municipal advisor regulatory framework – where we are and where to next

• Published in: The journal of investment compliance 2017-05, Vol.18 (1), p.53-57
• Main Author: Lanza, Ernesto
• Format: Article
• Language: English
• Subjects: Advisors; Compliance; Municipal finance; Regulatory agencies; Wall Street Reform & Consumer Protection Act 2010-US
• ISSN: 1528-5812; 1758-7476
• DOI: 10.1108/JOIC-02-2017-0004

Purpose To describe the status of municipal advisor rulemaking by the US Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB), and regulatory compliance approaches, under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Design/methodology/approach Examines the posture of the SEC, MSRB and Financial Industry Regulatory Authority (FINRA) upon completion of the MSRB’s core regulatory framework for municipal advisors. Explores threshold issues in determining municipal advisor status, approaches for preparing for and responding to initial regulatory compliance examinations by the SEC and FINRA, and key considerations in reviewing municipal advisor policies, procedures and business practices in light of the evolving regulatory and marketplace landscape. Findings SEC and FINRA compliance examiner feedback points to the expectation that municipal advisor policies, procedures, processes and records must be fully consistent with the firm’s business activities and must address each material aspect of all applicable MSRB and SEC rules, as well as the fiduciary duty of municipal advisors to their municipal entity clients under the Securities Exchange Act of 1934. Originality/value Practical guidance from experienced securities and public finance attorney that provides a consolidated outline of key municipal advisor regulatory compliance obligations under the Dodd-Frank Act.