Three years after passage of the Dodd-Frank Act, the Municipal Securities Rulemaking Board is still waiting for the Securities and Exchange Commission to issue its final rule defining who is a municipal advisor.
While SEC Chairwoman Mary Jo White has said that finishing the agency’s municipal advisor rule is a “priority,” said Lynnette Kelly, executive director of MSRB at a Wednesday briefing at The National Press Club in Washington, “she has a lot of priorities,” so timing of such a rulemaking is unclear.
Dodd-Frank gave the MSRB the authority to regulate municipal advisors, who, as Kelly explained, must act as fiduciaries. But MSRB can’t write its own rules for municipal advisors until the SEC finalizes its rule, which was mandated under Section 975 of Dodd-Frank.
An SEC spokesman told AdvisorOne that the municipal advisor registration rulemaking is a “high priority,” but a date for Commission consideration has not yet been set.
The SEC released its first draft of its municipal advisor rule in December 2010, but MSRB as well as lawmakers complained the SEC’s definition was too broad.
Kelly also noted that MSRB would continue this year its “long-term project to enhance” its Electronic Municipal Market Access (EMMA) web site. EMMA, which launched via a pilot program in 2008 and officially went live in 2009, is a centralized online database that provides the public with free access to official disclosure documents for most municipal bonds issued in the U.S.
On Monday, MSRB announced that EMMA will now display both the initial offering dollar price and yield for a bond, when available. These changes, MSRB said, “provide more meaningful primary market information to market participants about the initial offering price and facilitate comparisons to trade data, which is normally displayed with both a dollar price and yield.”