SEC Requires “Municipal Advisors” to Register by October 1, 2010

September 20, 2010

In our prior alert on the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act), we reported that the Act requires the regulation of certain previously unregulated participants in the municipal securities market, which the Act calls “municipal advisors.” The Securities and Exchange Commission (SEC) has adopted a temporary rule requiring municipal advisors to register with the SEC. Specifically, any person or entity whose activities bring them within the definition of a municipal advisor must complete the Municipal Advisor Temporary Registration Form (Form MA-T).

What is a municipal advisor?

  • A person (who is not a municipal entity or an employee of a municipal entity) 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.
  • Includes financial advisors, guaranteed investment contract brokers, third-party marketers, placement agents, solicitors, finders, and swap advisors, if such persons are described in any of clauses (i) through (ii) above.
  • Does not include a broker, dealer, or municipal securities dealer serving as an underwriter (as defined in section 2(a)(11) of the Securities Act of 1933) (15 U.S.C. 77b(a)(11)), any investment adviser registered under the Investment Advisers Act of 1940, or persons associated with such investment advisers who are providing investment advice, any commodity trading advisor registered under the Commodity Exchange Act or persons associated with a commodity trading advisor who are providing advice related to swaps, attorneys offering legal advice or providing services that are of a traditional legal nature, or engineers providing engineering advice.

Terms used in the definition, including “municipal entity,” “obligated person,” and others, are also set forth in the instructions to the form.

How does a municipal advisor register?

Form MA-T may be filed only through the SEC’s website. It may not be filed in paper form.

When is the registration deadline?

Current municipal advisors must file Form MA-T by Oct. 1, 2010. The SEC has indicated that municipal advisors should allow enough time to establish an account and obtain access credentials (user name and password) and complete the online version of Form MA-T by Oct. 1, 2010. Any person who desires to become a municipal advisor after Oct. 1, 2010, should file Form MA-T before providing advice to a municipal entity or obligated person.

In the coming months, we will continue to monitor rules and regulations promulgated by the SEC and other federal agencies pursuant to the Act and any other related guidance from federal agencies. If you have any questions regarding the municipal securities provisions of the Act or other recent changes to the municipal securities regulatory framework, please contact the authors or visit McGuireWoods’ Public Finance  practice. Prior legal updates are available in our news archive.