SEC Adopts First Rule Under Dodd-Frank Act: Temporary Rule 15Ba2-6T Requiring Municipal Advisers to Register with the SEC

September 2, 2010

The SEC adopted a temporary rule, Rule 15Ba2-6T, requiring municipal advisors to register with the SEC by October 1, 2010.  This deadline was established by the newly-enacted Dodd-Frank Wall Street Reform and Consumer Protection Act.  This regulation is the first adopted by the SEC to implement the requirements of the Dodd-Frank Act.

The rule applies to municipal advisors that provide advice to state and local governments and other borrowers involved in the issuance of municipal securities. The advice typically relates to municipal derivatives, guaranteed investment contracts, investment strategies or the issuance of municipal securities. Municipal advisors also solicit business from a state or local government for a third party.  Subject to certain exemptions, the definition of municipal advisor under the Dodd-Frank Act includes financial advisors, guaranteed investment contract brokers, third-party marketers, placement agents, solicitors, finders, and certain swap advisors that provide municipal advisory services.

Form MA-T, the new registration form, requires municipal advisors to provide identifying and contact information, and select from a list of municipal advisory activities in which they engage. Municipal advisors also are required to provide disciplinary history information similar to what the SEC obtains from registered broker-dealers and investment advisers. Municipal advisors will be required to amend their Form MA-T whenever any identifying and contact information or disciplinary information has become inaccurate in any way, and whenever a municipal advisor wishes to withdraw from temporary registration.

Municipal advisers will have to access and complete Form MA-T on the SEC's website.  The SEC recommends that municipal advisers begin the registration process as soon as possible because of the impending registration deadline and the requirement that applicants first obtain an ID and password.

The SEC implemented the registration provision on an interim basis in order for municipal advisers to meet the new law's October 1st registration deadline. The SEC expects to propose a permanent rule later this year.

Information filed by municipal advisors will be made publicly available on the SEC's website. Click here to access the SEC press release about the new rule.