Posted by Michael Heaton on 05/06/2016

In 2016, many of the Municipal Securities Regulatory Board’s (MSRB) new standards of conduct for Municipal Advisors go into effect. In addition to complying with these new standards, municipal advisors must continue to obtain professional qualifications in order to advise state and local governments on public finance decisions. The Dodd-Frank Wall Street Reform and Consumer Protection Act established the framework for these new initiatives.

Fiduciary Duty

MSRB Rule G-42 establishes the duties of non-solicitor advisors and takes effect June 23, 2016. The Dodd-Frank Act established the federal fiduciary duty for municipal advisors who work with municipal clients, and G-42 addresses the specific duty of care and loyalty requirements that are components of their fiduciary obligation.

Pay to Play & Political Contributions

Amendments to MSRB Rule G-37 go into effect on August 17, 2016. These amendments will subject municipal advisors to the Rule’s guidelines and restrictions on political contributions and municipal securities dealer pay-to-play rules. This will include those advisors acting as third-party solicitors.

Effective May 6, 2016, amendments to MSRB Rule G-20 limit the size and nature of gifts that municipal advisors may give in their professional capacity advising state and local governments. The changes address conflicts of interest that may arise from gift-giving in connection with municipal advisory activities.

Training & Education

The MSRB has provided online resources to assist firms as they develop their municipal advisory compliance program. The MSRB has added to its library of online resources, and webinars to help municipal advisors understand their regulatory obligations.

Resources include a recording of a live compliance outreach program for municipal advisors recently co-hosted by the MSRB, Securities and Exchange Commission and Financial Industry Regulatory Authority (FINRA). 

For more information on registering as a municipal advisor, contact Michael Heaton at (877) 394-9471, ext. 704.