The Dodd-Frank financial reform act should not extend requirements for municipal advisor registration to people who work with governmental retirement and savings plans, the American Society of Pension Professionals & Actuaries (ASPPA) told the Securities and Exchange Commission on Thursday.

ASPPA’s comments came in response to the SECs request for comments on the proposed registration, Release No. 34-63576 for Registration of Municipal Advisors. Joining with the ASPPA in its response was the National Tax Sheltered Accounts Association (NTSAA).

The two groups are concerned about how the application of proposed new rules 15Ba1-1 through 15Ba1-7 under the Securities Exchange Act of 1934 will impact retirement plan professionals who work with governmental sponsored retirement plans.

“We believe that the Dodd-Frank Wall Street Reform and Consumer Protection Actwas not intended to extend the municipal advisor registration requirements to those who work with governmental retirement and savings plans,” wrote ASPPA General Counsel and Regulatory Affairs Director Craig Hoffman in a statement.

“This is particularly true for governmental retirement savings plans funded exclusively with employee contributions. Similarly, providers of advice and information to the participants in governmental retirement and savings plans should not be subject to registration as municipal advisors,” Hoffman said.

Many professionals who work with participants in governmental defined contribution 403(b), 401(a), 457 and traditional retirement plans are not engaging in municipal advisory activities, according to Hoffman. For example, he argued, many ASPPA members work with teachers in public schools who participate in a 403(b) savings plan sponsored by their school district.

If the act’s registration requirements were to be applied in this context, it would have “a severe chilling effect on the availability of this much needed service, and may cause a market disruption in favor of larger, SEC-registered investment advisors by subjecting only smaller, local investment advisors to the municipal advisor registration requirements” and associated Municipal Securities Rulemaking Board (MSRB) rules, he said.

Read “At ASPPA 401(k) Summit, IRON Financial’s Friedman Mitigates Fiduciary Risk” at AdvisorOne.com.