SEC Approves Supervision & Compliance Rule for Municipal Advisors
The SEC last week approved new MSRB Rule G-44 implementing supervision and compliance requirements for municipal advisors. The MSRB touted the Rule as "its first dedicated rule for municipal advisors" under the Dodd-Frank mandate for greater regulation of the nation's municipal-securities markets. See MSRB Reg. Not. 2014-19, here. New Rule G-44 requires Municipal Advisors to follow the same supervision and compliance regime otherwise applicable to registered broker-dealers under FINRA Rules 3110- 3130. It requires, among others: - Written supervisory procedures ("WSPs") tailored each Municipal Advisor's business model; - Registered Municipal-Advisory-Principals supervising the business - although the examination and registration process for that won't be available until late 2015 at the earliest; - Established processes to test and assure compliance with the WSPs; - A designated Chief Compliance Officer; - Annual review and certification processes; and, - Accompanying books and records requirements. The Rule becomes effective April 23, 2015, with the annual certification requirement in G-44(d) effective the following year, April 23, 2016. In a related comment on MSRB's strategic priorities, SIFMA urged the regulator to move forward with FINRA Series 52 and 53 (municipal securities) examinations for all registered Municipal Advisors now, rather than awaiting MSRB's new proposed separate examinations. You can download SIFMA's Oct. 23 comment letter here. The SEC's approval order, SEC Rel. No. 34-73415, is here. Thomas K. Potter, III ( is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Managing Partner of the Nashville office, Tom is licensed in Tennessee, Texas and Louisiana. He has over 28 years' experience representing financial institutions in litigation, regulatory and compliance matters. © 2014 by Thomas K. Potter, III (all rights reserved)
Posted in: Dodd-Frank, SEC
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