The Securities and Exchange Commission’s exam division has released a report showing widespread compliance failures among municipal advisors.
In a Nov. 7 risk alert on observations from municipal exams, the agency’s Office of Compliance Inspections and Examinations said it had conducted more than 110 exams of municipal advisors and evaluated their compliance with registration, statutory fiduciary standard of care, fair dealing, recordkeeping and supervision.
Examiners most frequently observed “deficiencies in the areas of registration, books and records, and supervision,” the alert states, with some firms being referred to the enforcement division.
The report’s key takeaway: “Municipal advisors should take steps to educate themselves regarding their compliance obligations,” the SEC warned.
Lynnette Kelly, director of the Municipal Securities Rulemaking Board, which is overseen by the SEC, told ThinkAdvisor in an email message that MSRB “encourages the municipal advisory community to carefully consider the SEC’s examination feedback.”