October 23, 2021

Volume XI, Number 296

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October 22, 2021

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October 21, 2021

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The House Cracks the Ice. Will the SEC Sail Through with Municipal Advisor Rules?

Just who is and is not regulated under changes made to federal securities law by the Dodd Frank Act as a "municipal advisor" and consequently a fiduciary to their clients has concerned many since the Securities and Exchange Commission released proposed rules employing an aggressively broad interpretation in December 2010. For those frozen in this grey zone of regulatory ambiguity, the ice may finally be cracking. Last night the House of Representatives passed H.R. 2827, a bill amending provisions of the Securities Exchange Act of 1934 to clarify the regulation of municipal advisors. Earlier last week the House Committee on Financial Services passed the same bill with bi-partisan unanimity in a 60-0 vote. Likelihood that the bill will become law in the brief time before the current Congress ends is slim, but not out of the question. Much more likely, the bipartisan nature of the House vote may encourage the Securities and Exchange Commission to move forward with its long-delayed final rules on municipal advisors.

Key features of H.R. 2827:

  • narrow the definition of municipal advisors to parties engaged for compensation;
  • restrict application of the existing fiduciary duty to activities pursuant to the engagement; and
  • clarify covered activity by exempting certain activities of nine different categories of professionals.

For a review of H.R. 2827, including a redline illustration of its statutory changes, click here.

© 2021 Bracewell LLPNational Law Review, Volume II, Number 265
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About this Author

Paul S. Maco, Bracewell Law Firm, Securities Attorney
Partner

Paul Maco practices in the areas of federal securities and commodities law, corporate governance, and public finance. A former senior official at the U.S. Securities and Exchange Commission (SEC), his transactional, regulatory, enforcement and enforcement defense experience brings a comprehensive perspective to the needs of his clients, whom he represents before the SEC, Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB) in enforcement, regulatory, and compliance matters.

Paul defends states,...

202-828-5821
Tim Deithloff, Finance, Bankruptcy, Attorney, Bracewell, law firm
Senior Counsel

Tim’s principal area of practice is public finance law. He has represented issuers, underwriters, borrowers, and credit providers in municipal finance transactions involving state agencies, university systems, private universities, cities, counties, federally recognized Indian Tribes, and other political subdivisions.

512-542-2102
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