Municipal Advisor Regulation
This page provides general guidance regarding municipal advisor regulation. Please refer to the SEC Office of Municipal Securities web page and the Municipal Securities Rulemaking Board website for complete information.
The SEC's final municipal advisor registration and recordkeeping Rules 15Ba1-1 through 15Ba1-8 and 15Bc4-1 were effective July 1, 2014. Firms that are engaged, or plan to engage, in municipal advisory activities must register with both the SEC and the Municipal Securities Rulemaking Board.
Municipal AdvisorSection 15B of the Securities Exchange Act defines the term "municipal advisor" to mean a person that (i) provides advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal securities, including advice with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues, or (ii) undertakes a solicitation of a municipal entity. The definition includes financial advisors, guaranteed investment contract brokers, third-party marketers, placement agents, solicitors, finders, and swap advisors that engage in municipal advisory activities.
Obligated PersonAn "obligated person" generally means any person, including an issuer of municipal securities, committed to support the payments on the municipal securities to be sold in an offering.
Municipal Financial Product"Municipal financial product" is defined to mean municipal derivatives, guaranteed investment contracts and investment strategies.
Investment Strategies"Investment strategies" is defined to include plans or programs for the investment of proceeds of municipal securities that are not municipal derivatives, guaranteed investment contracts, and the recommendation of and brokerage of municipal escrow investments.
Exclusions and Exemptions
The Exchange Act and the final SEC rules provide activity-based exclusions and exemptions from the definition of municipal advisor when certain criteria are met.
Important Considerations for FINRA-Regulated Firms
All firms that provide advice to or solicit municipal entities or obligated persons should carefully review the SEC's municipal advisor rules and related guidance to determine if they are required to register.
Any FINRA-regulated firm that recommends investments or investment strategies to customers should take particular care to determine if any of its customers are municipal entities or obligated persons, and, if so, whether the funds invested for those customers represent proceeds of municipal securities or municipal escrow investments.
FINRA's Fixed Income Regulation (FIR) staff provides broker-dealers, attorneys, registered representatives, investors and other interested parties with guidance relating to FINRA’s enforcement of MSRB rules.
- FINRA Fines UBS Financial Services Inc. $2 Million for Continued Failures Relating to Short Positions in Municipal SecuritiesOctober 02, 2019
- December 13, 2018
- September 11, 2017
- October 03, 2016