Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 54465 

1See Dodd-Frank Wall Street Reform and 

Consumer Protection Act, Pub. L. 111–203 (2010). 

2 17 CFR 240.15Ba2–6T. 

3 15 U.S.C. 78a et seq. 

4 15 U.S.C. 78o–4(a). All references in this Release 

to the Exchange Act refer to the Exchange Act as 

amended by the Dodd-Frank Act. 

5See infra Section II.A. 

6See Section 975(a)(1)(B) of the Dodd-Frank Act; 

15 U.S.C. 78o–4(a)(1)(B). 

7See Section 975(i) of the Dodd-Frank Act. 

8 17 CFR 240.15Ba2–6T. 

Text of Amendment 

■ For the reasons set out in the 

preamble, Title 17, Chapter II of the 

Code of Federal Regulations is amended 

as follows: 

PART 200—ORGANIZATION; 

CONDUCT AND ETHICS; AND 

INFORMATION AND REQUESTS 

■ 1. The authority citation for part 200, 

subpart A, continues to read in part as 

follows: 

Authority: 15 U.S.C. 77o, 77s, 77sss, 78d, 

78d–1, 78d–2, 78w, 78ll(d), 78mm, 80a–37, 

80b–11, and 7202, unless otherwise noted. 

* * * * * 

■ 2. Section 200.30–4 is amended by 

adding paragraph (a)(15) to read as 

follows: 

§ 200.30–4 Delegation of authority to 

Director of Division of Enforcement. 

* * * * * 

(a) * * * 

(15) With respect to debts arising from 

actions to enforce the federal securities 

laws, to terminate collection activity or 

discharge debts, to accept offers to 

compromise debts when the principal 

amount of the debt is $5 million or less, 

to reject offers to compromise debts, and 

to accept or reject offers to enter into 

payment plans. 

* * * * * 

By the Commission. 

Dated: September 1, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–22241 Filed 9–7–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Parts 240 and 249 

[Release No. 34–62824; File No. S7–19–10] 

RIN 3235–AK69 

Temporary Registration of Municipal 

Advisors 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Interim final temporary rule; 

Request for comments. 

SUMMARY: The Commission is adopting 

an interim final temporary rule that 

establishes a means for municipal 

advisors, as defined in the Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act 1 (‘‘Dodd-Frank Act’’), to 

satisfy temporarily the requirement that 

they register with the Commission by 

October 1, 2010. 

DATES: Effective Date: October 1, 2010 

through December 31, 2011. Comments 

should be received on or before October 

8, 2010. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/interim-final-temp.shtml); or 

• Send an e-mail to 

rule-comments@sec.gov. Please include 

File No. S7–19–10 on the subject line; 

or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File No. 

S7–19–10. This file number should be 

included on the subject line if e-mail is 

used. To help us process and review 

your comments more efficiently, please 

use only one method. The Commission 

will post all comments on the 

Commission’s Internet Web site (http:// 

www.sec.gov/rules/ 

interim-final-temp.shtml). Comments 

are also available for Web site viewing 

and printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549 on official 

business days between the hours of 

10 a.m. and 3 p.m. All comments 

received will be posted without change; 

we do not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. 

FOR FURTHER INFORMATION CONTACT: 

Martha Mahan Haines, Assistant 

Director and Chief, Office of Municipal 

Securities, at (202) 551–5681; Ira L. 

Brandriss, Special Counsel, Office of 

Market Supervision, at (202) 551–5651; 

Steve L. Kuan, Special Counsel, Office 

of Market Supervision, at (202) 551– 

5624; Rahman J. Harrison, Special 

Counsel, Office of Market Supervision, 

at (202) 551–5663; Steven Varholik, 

Special Counsel, Office of Market 

Supervision, at (202) 551–5615; Leigh 

W. Duffy, Attorney-Adviser, Office of 

Market Supervision, at (202) 551–2938; 

or any of the above at Division of 

Trading and Markets, Securities and 

Exchange Commission, 100 F Street, 

NE., Washington, DC 20549–6628. 

SUPPLEMENTARY INFORMATION: The 

Commission is adopting new Rule 

15Ba2–6T2 under the Securities 

Exchange Act of 1934 3 (the ‘‘Exchange 

Act’’) as an interim final temporary rule. 

The rule will expire at 11:59 p.m. 

Eastern Time on December 31, 2011. 

The Commission is soliciting comments 

on all aspects of the interim final 

temporary rule. The Commission will 

carefully consider any comments 

received and intends to respond as 

necessary or appropriate. The 

Commission expects to consider a 

proposal for a final permanent 

registration program, including detailed 

requirements for the registration of 

municipal advisors, and to seek public 

comment on the proposal before its 

adoption. Persons interested in 

commenting on the final permanent 

municipal advisor registration program 

should submit comments to the 

subsequent proposal. 

I. Introduction 

As part of the Dodd-Frank Act, signed 

into law by President Obama on July 21, 

2010, Congress amended Section 15B(a) 

of the Exchange Act 4 to, among other 

things, make it unlawful for municipal 

advisors, as defined below,5 to provide 

certain advice or solicit municipal 

entities or certain other persons without 

registering with the Commission.6 The 

registration requirement for municipal 

advisors becomes effective on October 1, 

2010, meaning that municipal advisors 

must be registered on that date in order 

to continue their municipal advisory 

services.7

The Commission is today adopting, 

on an interim final temporary basis, new 

Rule 15Ba2–6T8 under the Exchange 

Act, which will permit municipal 

advisors to temporarily satisfy the 

registration requirement. The adoption 

of Rule 15Ba2–6T serves as a 

transitional step to the implementation 

of a final permanent registration 

program, makes relevant information 

available to the public and municipal 

entities, and permits municipal advisors 

to continue their business after October 

1, 2010. A municipal advisor may 

temporarily satisfy the statutory 

registration requirement by submitting 

certain information electronically 

through the Commission’s public Web 

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54466 Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 

9 17 CFR 249.1300T. A municipal advisor that 

completes the temporary registration form and 

receives confirmation from the Commission that the 

form was filed will be temporarily registered for 

purposes of Section 15B. See also infra notes 47– 

48 and accompanying text. 

10 In order to establish an account and obtain 

access credentials with the temporary registration 

system for Form MA–T on the Commission’s secure 

Web site, a submitter will need to fill out general 

user information fields such as name, address, 

phone number, e-mail address, organization name 

and employer identification number, and user 

account information (i.e., username and password), 

and to select and answer a security question. Once 

accepted by the temporary registration system, the 

submitter will receive an e-mail notification that the 

account has been established and the submitter will 

be able to access and complete Form MA–T. The 

Commission staff anticipates that submitters will 

ordinarily obtain access credentials the same day 

that they are requested. However, to avoid the 

possibility of delay, all municipal advisors are 

encouraged to allow ample time to establish an 

account and obtain access credentials and complete 

Form MA–T by October 1, 2010. 

11For definitions of the terms ‘‘municipal entity,’’ 

‘‘obligated person,’’ ‘‘municipal financial product,’’ 

and ‘‘solicitation of a municipal entity or obligated 

person,’’ see infra, notes 13–17. 

12See Section 15B(a)(4) of the Exchange Act, as 

amended by Section 975(a)(4) of the Dodd-Frank 

Act. 

13 ‘‘Municipal entity’’ is defined to mean any 

State, political subdivision of a State, or municipal 

corporate instrumentality of a State, including: Any 

agency, authority, or instrumentality of the State, 

political subdivision, or municipal corporate 

instrumentality; any plan, program, or pool of assets 

sponsored or established by the State, political 

subdivision, or municipal corporate instrumentality 

or any agency, authority, or instrumentality thereof; 

and any other issuer of municipal securities. See 

Section 15B(e) of the Exchange Act, as amended by 

Section 975(e) of the Dodd-Frank Act. 

14 ‘‘Obligated person’’ is defined to mean any 

person, including an issuer of municipal securities, 

who is either generally or through an enterprise, 

fund, or account of such person, committed by 

contract or other arrangement to support the 

payment of all or part of the obligations on the 

municipal securities to be sold in an offering of 

municipal securities. See id. 

15 ‘‘Municipal financial product’’ is defined to 

mean municipal derivatives, guaranteed investment 

contracts, and investment strategies. ‘‘Investment 

strategies’’ includes plans or programs for the 

investment of the proceeds of municipal securities 

that are not municipal derivatives, guaranteed 

investment contracts, and the recommendation of 

and brokerage of municipal escrow investments. 

See id. 

16The statute specifically includes within the 

meaning of municipal advisor, someone who 

provides advice with respect to the structure, 

timing, terms, and other similar matters concerning 

municipal financial products or issues. See id. 

site on new Form MA–T, which is 

designed for this purpose.9

Because entry of information into 

Form MA–T will require establishing an 

account and securing access credentials 

(username and password) as explained 

in more detail below, municipal 

advisors are advised to allow ample 

time to establish an account and obtain 

such credentials and complete the form 

before October 1, 2010.10 The form and 

instructions for requesting access 

credentials will be accessible through a 

link located on the Commission’s Web 

site, http://www.sec.gov, beginning on 

or about September 1, 2010. 

II. Discussion 

Section 15B(a)(1) of the Exchange Act, 

as amended by Section 975(a)(1)(B) of 

the Dodd-Frank Act, makes it unlawful 

for a municipal advisor to provide 

advice to or on behalf of a municipal 

entity or obligated person with respect 

to municipal financial products or the 

issuance of municipal securities, or to 

undertake a solicitation of a municipal 

entity or obligated person, unless the 

municipal advisor is registered with the 

Commission.11 Section 15B(a)(2) of the 

Exchange Act, as amended by Section 

975(a)(2) of the Dodd-Frank Act, 

provides that a municipal advisor may 

be registered by filing with the 

Commission an application for 

registration in such form and containing 

such information and documents 

concerning the municipal advisor and 

any person associated with the 

municipal advisor as the Commission, 

by rule, may prescribe as necessary or 

appropriate in the public interest or for 

the protection of investors. 

The Commission is adopting an 

interim final temporary rule, Rule 

15Ba2–6T, in order to provide a method 

for municipal advisors to temporarily 

satisfy the statutory registration 

requirement of Section 15B(a)(1) of the 

Exchange Act (as amended by Section 

975(a)(1) of the Dodd-Frank Act) until 

the Commission has promulgated a final 

permanent registration program. The 

interim final temporary rule will expire 

on December 31, 2011. 

As described in detail below, Form 

MA–T will require a municipal advisor 

to indicate the purpose for which it is 

submitting the form (i.e., initial 

application for, or amendment or 

withdrawal of temporary registration), 

provide certain basic identifying and 

contact information concerning its 

business, indicate the nature of its 

municipal advisory activities, and 

supply information about its 

disciplinary history and the disciplinary 

history of its associated municipal 

advisor professionals. The Commission 

carefully considered alternatives to the 

adoption of an interim final temporary 

rule before deciding to adopt Rule 

15Ba2–6T. It considered, for example, 

whether it would be preferable to issue 

a broad-based exemption from the 

Dodd-Frank Act’s registration 

requirement 12 in order to allow the 

Commission time to consider a final 

permanent registration program before 

municipal advisors would be required 

to submit any registration form. In light 

of the October 1, 2010 effective date that 

Congress set for Section 975 of the 

Dodd-Frank Act, delaying 

implementation of any registration for 

municipal advisors and not 

accommodating temporary registration 

would not appear to achieve the 

purposes intended by Congress in 

selecting an October 1, 2010 registration 

date. 

The Commission also considered and 

weighed the relative costs and benefits 

of requiring disciplinary information in 

the context of the temporary registration 

contemplated by Form MA–T. The 

Commission has determined to require 

disclosure of disciplinary information 

on Form MA–T because of the value it 

will have for the Commission’s 

oversight of municipal advisors and 

their activities in the municipal 

securities market, and because of the 

importance of such disciplinary 

information to investors, issuers and 

others in choosing a municipal advisor, 

engaging in transactions with a 

municipal advisor, or participating in 

transactions in municipal securities 

issued in offerings for which a 

municipal advisor provided municipal 

advisory services. 

The Commission believes that 

providing a temporary registration 

process for municipal advisors, 

pursuant to an interim final temporary 

rule effective on October 1, 2010, is a 

necessary and appropriate way to 

proceed, is consistent with the intent of 

Congress in enacting Section 975, and is 

a tailored way to provide investors and 

municipal entities with basic and 

important information quickly while the 

Commission considers a permanent 

registration program. The Commission 

requests comment generally on the 

decision to require temporary 

registration on Form MA–T and the 

specific information required to be 

reported on the form. The Commission 

also requests comment on the 

Commission’s determinations discussed 

above and on whether there are 

alternatives not discussed above that the 

Commission should consider. 

A. Definition of Municipal Advisor 

Section 15B(e) of the Exchange Act, as 

amended by Section 975(e) of the DoddFrank Act, defines the term ‘‘municipal 

advisor’’ to mean a person (who is not 

a municipal entity or an employee of a 

municipal entity) (1) that provides 

advice to or on behalf of a municipal 

entity 13 or obligated person 14 with 

respect to municipal financial 

products 15 or the issuance of municipal 

securities,16 including advice with 

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Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 54467 

17 ‘‘Solicitation of a municipal entity or obligated 

person’’ is defined to mean a direct or indirect 

communication with a municipal entity or 

obligated person made by a person, for direct or 

indirect compensation, on behalf of a broker, dealer, 

municipal securities dealer, municipal advisor, or 

investment adviser (as defined in Section 202 of the 

Investment Advisers Act of 1940, 15 U.S.C. 80b–2) 

that does not control, is not controlled by, or is not 

under common control with the person undertaking 

such solicitation for the purpose of obtaining or 

retaining an engagement by a municipal entity or 

obligated person of a broker, dealer, municipal 

securities dealer, or municipal advisor for or in 

connection with municipal financial products, the 

issuance of municipal securities, or of an 

investment adviser to provide investment advisory 

services to or on behalf of a municipal entity. See 

id. 

18These entities, however, are only included if 

they provide 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 

undertake a solicitation of a municipal entity. See 

Section 975(e) of the Dodd-Frank Act. The term 

‘‘municipal advisory services’’ as used herein means 

advice with respect to municipal financial 

products, the issuance of municipal securities, and 

the solicitation of a municipal entity. 

19The term ‘‘underwriter’’ is defined in Section 

2(a)(11) of the Securities Act of 1933. 15 U.S.C. 

77b(a)(11). A broker, dealer or municipal securities 

dealer who provides municipal advisory services 

while acting in a capacity other than as an 

underwriter would, however, be a municipal 

advisor. 

20 Id. 

21See Section 975(e) of the Dodd-Frank Act. 

22The Commission believes that such 

interpretation is in furtherance of the goals of the 

Dodd-Frank Act to regulate municipal advisors, a 

category of persons previously unregulated. 

23Every temporary registration and each 

amendment to a temporary registration or 

withdrawal from temporary registration filed 

pursuant to the rule shall constitute a ‘‘report’’ 

within the meaning of Sections 15B(c), 17(a), 18(a) 

and 32(a) and other applicable provisions of the 

Exchange Act. See Rule 15Ba2–6T(c). As a 

consequence, it would be unlawful for a municipal 

advisor to willfully make or cause to be made, a 

false or misleading statement of a material fact or 

omit to State a material fact in the Form MA–T. 

respect to the structure, timing, terms, 

and other similar matters concerning 

such financial products or issues, or (2) 

that undertakes a solicitation 17 of a 

municipal entity. The definition 

specifically includes ‘‘financial advisors, 

guaranteed investment contract brokers, 

third-party marketers, placement agents, 

solicitors, finders, and swap advisors’’ 

that provide municipal advisory 

services.18 The definition of ‘‘municipal 

advisor’’ explicitly excludes a broker, 

dealer, or municipal securities dealer 

serving as an underwriter,19 as well as 

attorneys offering legal advice or 

providing services that are of a 

traditional legal nature and engineers 

providing engineering advice are also 

excluded.20

The Dodd-Frank Act also excludes 

from the definition ‘‘any investment 

adviser registered under the Investment 

Advisers Act of 1940, or persons 

associated with such investment 

advisers who are providing investment 

advice.’’ 21 The Commission interprets 

this exclusion to mean that a registered 

investment adviser or an associated 

person of a registered investment 

adviser is excluded from the definition 

of ‘‘municipal advisor’’ if the investment 

adviser or associated person of the 

adviser provides municipal advisory 

services, so long as those services are 

investment advice for purposes of the 

Investment Advisers Act. A registered 

investment adviser or an associated 

person of a registered investment 

adviser must register with the 

Commission as a municipal advisor if 

the adviser or associated person of an 

adviser provides any municipal 

advisory services other than investment 

advice within the meaning of the 

Investment Advisers Act.22

The Commission similarly interprets 

the exclusion in the Dodd-Frank Act of 

‘‘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.’’ 

Accordingly, a commodity trading 

advisor or any person associated with a 

commodity trading advisor is excluded 

from the definition of ‘‘municipal 

advisor’’ if the commodity trading 

advisor or associated person of the 

commodity trading advisor provides 

municipal advisory services, so long as 

those services are advice related to 

swaps. A commodity trading advisor or 

an associated person of a commodity 

trading advisor must register with the 

Commission as a municipal advisor if 

the commodity trading advisor or an 

associated person of a commodity 

trading advisor provides any municipal 

advisory services that are not advice 

related to swaps. 

B. Temporary Registration on Form

MA–T 

Pursuant to new Rule 15Ba2–6T, as of 

October 1, 2010, in order temporarily to 

satisfy the new registration requirement 

for municipal advisors, and thereby 

legally be permitted to perform, or 

continue to perform, municipal advisory 

services, a municipal advisor will need 

to have completed and submitted new 

Form MA–T through the Commission’s 

Web site at http://www.sec.gov by 

October 1, 2010. Because entry of 

information into Form MA–T will 

require the securing of access 

credentials, as explained in more detail 

below, municipal advisors are advised 

to allow ample time to establish an 

account and obtain access credentials 

(username and password) and complete 

the form by October 1, 2010. Form MA– 

T will require a municipal advisor to 

indicate the purpose for which it is 

submitting the form (i.e., initial 

temporary registration, amendment to 

temporary registration, or withdrawal 

from temporary registration), provide 

certain basic identifying and contact 

information concerning its business, 

indicate the nature of its municipal 

advisory activities, and supply 

information about its disciplinary 

history and the disciplinary history of 

its associated municipal advisor 

professionals.23

More specifically, the information to 

be supplied will include: 

Basic Information 

1. Purpose for submission of Form 

MA–T. A municipal advisor must 

indicate whether it is submitting the 

form for initial temporary registration as 

a municipal advisor, is submitting an 

amendment to a temporary registration 

as a municipal advisor, or is submitting 

a withdrawal from temporary 

registration as a municipal advisor. If 

the municipal advisor is submitting an 

amendment or withdrawing from 

temporary registration, it will also be 

necessary to provide the Municipal 

Advisor Registration Number assigned 

to the municipal advisor at the time of 

its initial temporary registration. This 

information is needed in order to 

determine the purpose for which Form 

MA–T is being submitted and to 

appropriately cross-reference 

amendments and withdrawals to the 

original temporary registration. The 

inclusion of these items will allow the 

same form, Form MA–T, to be used for 

multiple purposes: Initial temporary 

registration, amendments to temporary 

registrations and withdrawals from 

temporary registration. 

The Commission seeks comment on 

the use of Form MA–T for these three 

purposes, whether use of the same form 

for multiple purposes may be confusing 

for registrants, and whether it would be 

preferable to have a separate form for 

each of these purposes. Will these 

requirements be confusing or otherwise 

difficult for a municipal advisor to 

comply with? 

2. Identifying and contact 

information. A municipal advisor must 

indicate the full legal name of the 

municipal advisor and, if different, the 

name under which it conducts its 

business, the address of its principal 

office and place of business, the 

telephone number and the facsimile 

number, if any, at that location, and its 

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54468 Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 

24See 15 U.S.C. 78o–4(c)(7). 

25See Section 15B(e)(4) of the Exchange Act as 

added by Section 975(e)(4) of the Dodd-Frank Act. 

26See Section 17(a)(1) of the Exchange Act, as 

amended by Section 975(h) of the Dodd-Frank Act. 

27Such findings must be on the record after 

notice and opportunity for hearing and include a 

finding that the particular disciplinary action is in 

the public interest. See Section 15B(c)(2) of the 

Exchange Act, as amended by Section 975(c)(3) of 

the Dodd-Frank Act. See also 17 CFR 201. 

28See 15 U.S.C. 78o(b)(4)(A). 

29See 15 U.S.C. 78o(b)(4)(D). 

30See 15 U.S.C. 78o(b)(4)(E). 

31See 15 U.S.C. 78o(b)(4)(H). 

32See 15 U.S.C. 78o(b)(4)(G). 

33See 15 U.S.C. 78o(b)(4)(B). 

34See 15 U.S.C. 78o(b)(4)(C). 

35The Commission has the same authority with 

respect to municipal securities dealers. See 15 

U.S.C. 78o–4(c). 

general e-mail address and Web site, if 

any. In addition, the municipal advisor 

must supply its mailing address, if it is 

different from its principal office and 

place of business, as well as the name 

and title of a person whom the 

municipal advisor has authorized to 

receive information and respond to 

questions about the registration (the 

‘‘contact person’’) and the address, 

telephone number and facsimile 

number, if any, and e-mail address, if 

any, of the contact person. 

The Commission is requesting this 

identifying and contact information to 

determine whether a particular 

municipal advisor has submitted a 

temporary registration, to contact a 

person at the municipal advisor if 

Commission staff have any questions or 

wish to arrange for an inspection, and 

to send information to the municipal 

advisor. 

The Commission requests comment 

concerning the appropriateness of 

requiring this identifying and contact 

information, including whether 

additional information should be 

required or whether different 

information would be better suited for 

this purpose. In particular, might it be 

confusing or otherwise difficult for a 

municipal advisor to supply this 

information? 

3. Other regulatory identifying 

information. Form MA–T also requires a 

municipal advisor to provide its 

Employer Identification Number (used 

with respect to Internal Revenue Service 

matters), but not—in the case of a sole 

proprietor, for example—a Social 

Security Number. If the municipal 

advisor is also registered with the 

Commission as an investment adviser, 

broker, dealer, or municipal securities 

dealer, it will be required to provide its 

related SEC file number or numbers. In 

addition, if the municipal advisor has a 

number (a ‘‘CRD Number’’) assigned to it 

either under the Financial Industry 

Regulatory Authority’s (‘‘FINRA’’) 

Central Registration Depositary (‘‘CRD’’) 

system or the Investment Adviser 

Registration Depository (‘‘IARD’’) 

system, it will be required to provide its 

CRD Number. 

The Commission seeks this 

information to more effectively crossreference those entities registered as 

municipal advisors to those who are 

registered as brokers, dealers, municipal 

securities dealers or investment 

advisers. This ability to cross-reference 

will allow the Commission to assemble 

more complete information concerning 

a municipal advisor who is also 

registered as a broker, dealer, municipal 

securities dealer or investment adviser 

and to plan for and carry out efficient 

and effective examinations of such 

entities.24 In addition, by obtaining all 

of a registrant’s regulatory file numbers, 

the Commission will be able to crossreference disciplinary information that 

is submitted to the CRD or IARD 

systems with that submitted on Form 

MA–T. 

The Commission seeks comment 

concerning the requirement to supply 

SEC file numbers and CRD Numbers. 

Will this requirement be confusing or 

otherwise difficult for a municipal 

advisor to comply with? Would the use 

of other identifying numbers be more 

useful or appropriate or should no 

identifying numbers be required? 

Nature of Municipal Advisory Activities 

Form MA–T requires the municipal 

advisor to indicate the general types of 

municipal advisory services that it 

provides. The following eight activities 

are listed, together with a checkbox for 

each: (1) Advice concerning the 

issuance of municipal securities, (2) 

advice concerning the investment of the 

proceeds of municipal securities, (3) 

advice concerning guaranteed 

investment contracts, (4) 

recommendation and/or brokerage of 

municipal escrow investments, (5) 

advice concerning the use of municipal 

derivatives (e.g., swaps), (6) solicitation 

of business from a municipal entity or 

obligated person for an unaffiliated 

person or firm (e.g., third party 

marketers, placement agents, solicitors 

and finders), (7) preparation of 

feasibility studies, tax or revenue 

projections, or similar products in 

connection with offerings or potential 

offerings of municipal securities, and (8) 

other. Registrants who check ‘‘other’’ 

activities will be required to provide a 

narrative description of such activities. 

Activities one to six above are derived 

from the definition of municipal advisor 

in the Dodd-Frank Act.25 Activity 

number seven above (the preparation of 

feasibility studies, tax or revenue 

projections, or similar products in 

connection with offerings or potential 

offerings of municipal securities) was 

included because these services are 

sometimes provided by financial 

advisors (some of whom may be 

municipal advisors) to municipal 

entities. This information, together with 

information under item eight (other), 

will assist the Commission in 

understanding the scope of activities in 

which a municipal advisor engages. 

The Commission is seeking this 

information in order to better 

understand the activities of municipal 

advisors. This information is necessary 

to understand the basis for registration 

and will assist Commission staff to 

better plan and prepare for inspections 

and examinations 26 of municipal 

advisors. 

The Commission seeks comment 

concerning the requirement for a 

municipal advisor to supply 

information in Form MA–T concerning 

the general types of municipal advisory 

services it provides. In particular, will it 

be confusing or otherwise difficult for a 

municipal advisor to provide this 

information? Are the categories of 

municipal advisory services appropriate 

or should additional or other categories 

be included? Are there considerations 

relating to the business of municipal 

advisors, or of some types of municipal 

advisors, that the Commission may not 

have taken into account in connection 

with this list of municipal advisory 

services? 

Disciplinary Matters 

Section 975 of the Dodd-Frank Act 

amended section 15B of the Exchange 

Act to direct the Commission, by order, 

to censure, place limitations on the 

activities, functions, or operations, 

suspend for a period not exceeding 

twelve months, or revoke the 

registration of any municipal advisor, if 

it finds 27 that such municipal advisor 

has committed or omitted any act, or is 

subject to an order or finding, 

enumerated in subparagraph (A),28

(D),29 (E),30 (H),31 or (G) 32 of paragraph 

(4) of section 15(b) of the Exchange Act; 

has been convicted of any offense 

specified Section 15(b)(4)(B) 33 of the 

Exchange Act within ten years of the 

commencement of the proceedings 

under section 15(c); or is enjoined from 

any action, conduct, or practice 

specified in Section 15(b)(4)(C) 34 of the 

Exchange Act.35 Item 3 of Form MA–T 

includes questions intended to solicit 

information from a municipal advisor 

concerning any of its activities or 

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Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 54469 

36See id. 

37 17 CFR 249.501. 

38Section 15B(e)(7) of the Exchange Act, added 

by Section 975(e) of the Dodd-Frank Act, defines 

‘‘associated person of a municipal advisor’’ as any 

partner, officer, director, or branch manager of a 

municipal advisor (or any person occupying a 

similar status or performing similar functions); any 

other employee of a municipal advisor who is 

engaged in the management, direction, supervision, 

or performance of any activities relating to the 

provision of advice to or on behalf of a municipal 

entity or obligated person with respect to municipal 

financial products or the issuance of municipal 

securities; and any person directly or indirectly 

controlling, controlled by, or under common 

control with a municipal advisor, or an employee 

of a municipal advisor. 

39With regard to the orders entered by SEC and 

CFTC, no time limit is placed on disclosure. See 

infra Item 3(d). 

40See Section 15B(c)(2) of the Exchange Act. 

41The Commission notes that a municipal advisor 

only needs to report charges that are currently 

pending. 

activities of certain of its associated 

persons that could subject the 

municipal advisor to disciplinary 

actions by the Commission under such 

subparagraphs of Section 15(b)(4) of the 

Exchange Act. 

In addition to its value generally for 

the Commission’s oversight of the 

municipal securities markets, the 

Commission seeks this information 

because it may indicate that a municipal 

advisor could be statutorily disqualified 

from acting as a municipal advisor.36 In 

addition, the Commission wishes to 

make this important information 

available to municipal entities and 

obligated persons who engage 

municipal advisors and to investors 

who may purchase securities from 

offerings in which municipal advisors 

participated. 

The disciplinary information to be 

disclosed is substantially similar to the 

information required to be disclosed in 

Form BD for broker-dealers.37

Specifically, Form MA–T asks questions 

concerning the disciplinary history of 

the municipal advisor and of its 

associated municipal advisor 

professionals. The Commission defines 

the term ‘‘associated municipal advisor 

professional’’ in the glossary section of 

Form MA–T to mean: (A) Any 

associated person of a municipal 

advisor primarily engaged in municipal 

advisory activities; (B) any associated 

person of a municipal advisor who is 

engaged in the solicitation of municipal 

entities or obligated persons; (C) any 

associated person who is a supervisor of 

any persons described in subparagraphs 

(A) or (B); (D) any associated person 

who is a supervisor of any person 

described in subparagraph (C) up 

through and including, the Chief 

Executive Officer or similarly situated 

official designated as responsible for the 

day-to-day conduct of the municipal 

advisor’s municipal advisory activities; 

and (E) any associated person who is a 

member of the executive or management 

committee of the municipal advisor or 

a similarly situated official, if any; and 

excludes any associated person whose 

functions are solely clerical or 

ministerial. The definition of associated 

municipal finance professional is 

derived from the definition of 

‘‘municipal finance professional’’ set 

forth in Rule G–37 of the Municipal 

Securities Rulemaking Board. 

The Commission has chosen to limit 

this inquiry to a subgroup (associated 

municipal advisor professionals) for 

purposes of temporary registration in 

order to obtain information about those 

associated persons 38 who are closely 

associated with an advisor’s municipal 

advisory activities, i.e., those who are 

primarily engaged in an advisor’s 

municipal advisory activities, have 

supervisory responsibilities over those 

primarily engaged in municipal 

advisory activities, are engaged in dayto-day management of the conduct of an 

advisor’s municipal advisory activities, 

or are responsible for executive 

management of the advisor. The 

Commission believes this is an 

appropriate definition to use for 

purposes of temporary registration 

because it will allow the Commission to 

obtain, and municipal entities, obligated 

persons and investors to have access to, 

information about those persons who 

may be most relevant to an advisor’s 

municipal advisory services, while 

excluding information about persons at 

a firm whose activities may have less 

bearing on the provision of such 

services. 

The Commission seeks comment 

concerning whether this limitation is 

appropriate, whether it excludes 

persons whose disciplinary history may 

be relevant to a municipal advisor’s 

activities, or whether it includes 

persons whose disciplinary history is 

not sufficiently relevant to a municipal 

advisor’s activities to warrant 

disclosure. In addition, the Commission 

solicits specific suggestions as to how 

the disclosure regarding associated 

persons whose actions are covered by 

Item 3 of Form MA–T might be 

improved for purposes of a permanent 

registration program or whether the 

current limitation to associated 

municipal advisory professionals is 

suitable. 

In addition, the Commission notes 

that the time-period limits for disclosure 

on Form MA–T are consistent with the 

disclosure reporting requirements on 

Form BD, adopted pursuant to Section 

15(b)(4) of the Exchange Act. 

Specifically, with respect to felonies 

and misdemeanors involving 

investments or an investment-related 

business, Form MA–T requires 

disclosures of matters within the last ten 

years. With respect to whether the 

municipal advisor or any associated 

municipal advisor professional was 

enjoined by any domestic or foreign 

court in connection with any 

investment-related activity, Form MA–T 

similarly requires disclosures of matters 

within the last ten years. Disclosure is 

also required concerning any orders 

entered against the municipal advisor or 

any associated municipal advisor 

professional by any Federal or State 

regulatory agency other than the SEC 

and Commodity Futures Trading 

Commission (‘‘CFTC’’) 39 or by any 

foreign financial regulatory authority 

within the last ten years. 

With respect to all other matters 

identified on Form MA–T (including 

Federal, State, and foreign regulatory 

actions and actions taken by selfregulatory organizations), no time limit 

is placed on disclosure. The 

Commission believes that it is important 

to collect information about matters 

within these timeframes because, under 

the Exchange Act, the Commission 

could use such matters to form the basis 

for an action to suspend or revoke a 

municipal advisor’s registration.40

The Commission seeks comment 

concerning these timeframes in 

connection with temporary registration 

of municipal advisors. Would the public 

and municipal entities find the full 

history of disciplinary information 

important and useful? Are these 

timeframes too long, such that they 

require disclosure of information that is 

no longer useful, or such that they 

impose an undue burden on applicants 

for temporary registration? 

More specifically, Form MA–T asks 

the following, which are, in substance, 

the same as the disciplinary questions 

asked in Form BD: 

1. Whether, in the past ten years, the 

municipal advisor or any associated 

municipal advisor professional has been 

convicted of or pled guilty or nolo 

contendere (‘‘no contest’’) in a domestic, 

foreign, or military court to any felony 

or been charged 41 with any felony? 

2. Whether in the past ten years, the 

municipal advisor or any associated 

municipal advisor professional has been 

convicted of or pled guilty or nolo 

contendere (‘‘no contest’’) in a domestic, 

foreign, or military court to a 

misdemeanor involving: Investments or 

an investment-related business, or any 

fraud, false statements, or omissions, 

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54470 Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 

42The Commission notes that a municipal advisor 

only needs to report charges that are currently 

pending. 43 17 CFR 279.1. 

wrongful taking of property, bribery, 

perjury, forgery, counterfeiting, 

extortion, or a conspiracy to commit any 

of these offenses or has been charged 42

with a misdemeanor involving such 

actions? 

3. Whether the SEC or the CFTC has 

ever: (a) Found the municipal advisor or 

any associated municipal advisor 

professional to have made a false 

statement or omission, (b) found the 

municipal advisor or any associated 

municipal advisor professional to have 

been involved in a violation of its 

regulations or statutes, (c) found the 

municipal advisor or any associated 

municipal advisor professional to have 

been a cause of an investment-related 

business having its authorization to do 

business denied, suspended, revoked, or 

restricted, (d) entered an order against 

the municipal advisor or any associated 

municipal advisor professional in 

connection with investment-related 

activity, or (e) imposed a civil money 

penalty on the municipal advisor or any 

associated municipal advisor 

professional, or ordered the municipal 

advisor or any associated municipal 

advisor professional to cease and desist 

from any activity. 

4. Whether any other Federal 

regulatory agency, any State regulatory 

agency, or any foreign financial 

regulatory authority has (a) Ever found 

the municipal advisor or any associated 

municipal advisor professional to have 

made a false statement or omission, or 

been dishonest, unfair, or unethical, (b) 

ever found the municipal advisor or any 

associated municipal advisor 

professional to have been involved in a 

violation of investment-related 

regulations or statutes, (c) ever found 

the municipal advisor or any associated 

municipal advisor professional to have 

been a cause of an investment-related 

business having its authorization to do 

business denied, suspended, revoked, or 

restricted, (d) in the past ten years, 

entered an order against the municipal 

advisor or any associated municipal 

advisor professional in connection with 

an investment-related activity, or (e) 

ever denied, suspended, or revoked the 

municipal advisor’s or any associated 

municipal advisor professional’s 

registration or license, or otherwise 

prevented the municipal advisor or any 

associated municipal advisor 

professional, by order, from associating 

with an investment-related business or 

restricted the municipal advisor’s or any 

associated municipal advisor 

professional’s activity. 

5. Whether any self-regulatory 

organization or commodities exchange 

has ever (a) found the municipal advisor 

or any associated municipal advisor 

professional to have made a false 

statement or omission, (b) found the 

municipal advisor or any associated 

municipal advisor professional to have 

been involved in a violation of its rules 

(other than a violation designated as a 

‘‘minor rule violation’’ under a plan 

approved by the SEC), (c) found the 

municipal advisor or any associated 

municipal advisor professional to have 

been the cause of an investment-related 

business having its authorization to do 

business denied, suspended, revoked, or 

restricted, or (d) disciplined the 

municipal advisor or any associated 

municipal advisor professional by 

expelling or suspending it from 

membership, barring or suspending its 

association with other members, or 

otherwise restricting its activities. 

6. Whether the municipal advisor’s or 

any associated municipal advisor 

professional’s authorization to act as an 

attorney, accountant, or Federal 

contractor has ever been revoked or 

suspended. 

7. Whether the municipal advisor or 

any associated municipal advisor 

professional is now the subject of any 

regulatory proceeding that could result 

in a ‘‘yes’’ answer to any part of the 

questions described in 3, 4 or 5 above. 

8. Whether any domestic or foreign 

court has: (a) In the last ten years, 

enjoined the municipal advisor or any 

associated municipal advisor 

professional in connection with any 

investment-related activity, (b) ever 

found that the municipal advisor or any 

associated municipal advisor 

professional was involved in a violation 

of investment-related statutes or 

regulations, or (c) ever dismissed, 

pursuant to a settlement agreement, an 

investment-related civil action brought 

against the municipal advisor or any 

associated municipal advisor 

professional by a State or foreign 

financial regulatory authority? 

9. Whether the municipal advisor or 

any associated municipal advisor 

professional is now the subject of any 

civil proceeding that could result in a 

‘‘yes’’ answer to any part of question 8 

above. 

If a municipal advisor answers ‘‘yes’’ to 

any of these questions, a text box will 

require a brief narrative of the event or 

a cross-reference to disclosure of the 

event made through the broker-dealer or 

investment advisor public disclosure 

systems. 

The Commission requests comments 

on all aspects of these disciplinary 

questions, including their 

appropriateness and adequacy, whether 

there are additional or other questions 

that should be included, and whether 

they will impose an excessive burden 

on municipal advisors to answer. In 

addition, the Commission requests 

comment concerning whether including 

the disciplinary questions in Form 

MA–T will impose undue hardship on, 

or have other consequences for, small 

municipal advisors. Furthermore, 

comment is solicited as to whether the 

ability to cross-reference to disciplinary 

disclosures on Form BD and Form ADV 

for investment advisers 43 will make it 

more difficult for municipal entities, 

obligated persons, investors and others 

to obtain this information than if it were 

included in Form MA–T itself. In 

addition, will the ability of municipal 

advisors to cross-reference such 

disclosures on Forms BD and ADV 

significantly reduce the burden on 

municipal advisors, and particularly 

small advisors, to complete Form 

MA–T? 

Execution 

With respect to execution of Form 

MA–T, the person who signs the form 

will be required to depose and say that 

he or she has executed the form on 

behalf of the municipal advisor and 

with its authority. With this execution, 

both the person who signs the form and 

the municipal advisor must represent 

that the information and statements 

made in Form MA–T are current, true 

and complete. The municipal advisor 

also will be required to consent to 

service of any civil action or notice of 

any proceeding before the Commission 

or self-regulatory organization regarding 

its advisory services via registered or 

certified mail to its named contact 

person. This is consistent with the 

execution provisions of Forms BD and 

ADV, but deletes references to State 

registration, bonding requirements and 

other inapplicable components. 

The individual who signs the Form 

MA–T depends upon the form of 

organization of the municipal advisor: 

• For a sole proprietorship, the sole 

proprietor should sign. 

• For a partnership, a general partner 

should sign. 

• For a corporation, an authorized 

principal officer should sign. 

• For all others, an authorized 

individual who participates in 

managing or directing the municipal 

advisor’s affairs should sign. 

The Commission requests comment 

concerning the representations required 

of a person who executes Form MA–T, 

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Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 54471 

44See supra note 23. 

45See supra text accompanying notes 37–38. 

46The following definitions in the glossary were 

taken from Form ADV (17 CFR 279.1): ‘‘Affiliate,’’ 

‘‘Charged,’’ ‘‘Control,’’ ‘‘Employee,’’ ‘‘Enjoined,’’ 

‘‘Felony,’’ ‘‘FINRA CRD or CRD,’’ ‘‘Foreign Financial 

Regulatory Authority,’’ ‘‘Found,’’ ‘‘InvestmentRelated,’’ ‘‘Involved,’’ ‘‘Minor Rule Violation,’’ 

‘‘Misdemeanor,’’ ‘‘Order,’’ ‘‘Person,’’ ‘‘Principal Place 

of Business or Principal Office and Place of 

Business,’’ ‘‘Proceeding,’’ ‘‘Related Person,’’ and 

‘‘Self-Regulatory Organization or SRO.’’ The 

Commission believes that it is appropriate to 

conform the definitions for these terms in Form 

MA–T to the definitions used in Form ADV because 

the information sought will be used for similar 

purposes. In addition, inconsistency in the 

definitions could create unnecessary uncertainty 

and confusion for municipal advisors, some of 

whom also must file Form ADV. The following 

definitions in the glossary were taken from the 

Section 975(e) of the Dodd-Frank Act: ‘‘Associated 

Person of a Municipal Advisor,’’ ‘‘Guaranteed 

Investment Contract,’’ ‘‘Investment Strategies,’’ 

‘‘Municipal Advisor,’’ ‘‘Municipal Entity,’’ 

‘‘Municipal Financial Product,’’ ‘‘Obligated Person,’’ 

and ‘‘Solicitation of a Municipal Entity or Obligated 

Person.’’ ‘‘IARD’’ is a FINRA definition. See supra 

text accompanying notes 37–38 for the definition of 

‘‘associated municipal advisor professional.’’ 

47See supra note 9. 

48Approval of a municipal advisor’s registration 

under the final permanent rule will replace and 

supersede a temporary registration. 

49See 5 U.S.C. 553(b). 

50See id. 

51See 5 U.S.C. 553(d). 

52See id. 

such as whether there should be 

additional or alternative 

representations. In addition, the 

Commission solicits comment regarding 

the requirement that the municipal 

advisor submit to service of process in 

the manner described. Would there be 

alternative methods to obtain such 

consent or should such consent not be 

obtained? 

Amendment, Withdrawal, and 

Rescission 

Rule 15Ba2–6T requires that a 

municipal advisor promptly amend 

Sections 1 or 3 of Form MA–T if the 

information therein becomes inaccurate 

in any way and whenever a municipal 

advisor wishes to withdraw from 

registration. A municipal advisor can 

amend its Form MA–T on the 

Commission’s Web site by accessing 

Form MA–T and checking the box in 

Item 1 for an amendment and providing 

updated information in the relevant 

sections of the form. Similarly, a 

municipal advisor can withdraw its 

registration by accessing Form MA–T on 

the Commission’s Web site and by 

checking the box for withdrawal on the 

form. In addition, pursuant to Rule 

15Ba2–6T, the Commission may rescind 

a municipal advisors’ temporary 

registration following notice and 

hearing in accordance with the 

Commission’s Rules of Practice.44

Instructions and Glossary 

Form MA–T includes a set of 

instructions for its proper completion 

and submission, and a glossary of terms 

intended, in part, to help participants in 

the municipal securities industry in 

determining whether they are municipal 

advisors and thus required to register. 

These instructions and glossary are 

attached to this release, together with 

Form MA–T. The definitions in the 

glossary (except for the definition of 

associated municipal advisor 

professional discussed above 45) are 

derived from Form ADV and the terms 

in the Exchange Act, including Section 

975(e) of the Dodd-Frank Act.46 The 

instructions are intended to answer 

basic questions concerning completion 

of the form. Comments are requested on 

all aspects of the form, instructions and 

glossary. For example, comments are 

solicited concerning whether the 

definitions and instructions are clear 

and useful to a submitter and how they 

might be improved. In addition, 

comments are solicited concerning 

whether additional instructions or 

definitions would be useful. 

Timing Issues 

As noted above, current municipal 

advisors are required by statute to 

register with the Commission by 

October 1, 2010. Municipal advisors are 

advised to allow ample time to establish 

an account and obtain access credentials 

(username and password) and complete 

the on-line version of Form MA–T by 

the statutory deadline. 

In order to establish an account and 

obtain access credentials to the 

temporary registration system for filing 

Form MA–T on the Commission’s 

secure Web site, a submitter will need 

to fill out general user information fields 

such as name, address, phone number, 

e-mail address, organization name and 

employer identification number, and 

user account information (i.e., username 

and password), and to select and answer 

a security question. Once accepted by 

the temporary registration system, the 

submitter will receive an e-mail 

notification that the account has been 

established and the submitter will be 

able to access and complete Form 

MA–T. The Commission anticipates that 

submitters will ordinarily obtain access 

credentials the same day that they are 

requested. To avoid the possibility of 

delay, municipal advisors are 

encouraged to allow ample time to 

establish an account and obtain access 

credentials and submit Form MA–T 

before October 1, 2010. 

Form MA–T will be accessible 

through a link located on the 

Commission’s Web site, http:// 

www.sec.gov, beginning on or about 

September 1, 2010, at which time 

municipal advisors will be able to 

submit forms for temporary registration 

and to amend and withdraw such 

registrations through the Commission’s 

Web site. Each Form MA–T, including 

each amendment to a temporary 

registration or withdrawal from 

temporary registration, is considered 

filed with the Commission upon its 

completion on the Commission Web 

page established for that purpose and 

the Commission has sent confirmation 

that the form was filed to the municipal 

advisor. 

A municipal advisor that completes 

the temporary registration form and 

receives confirmation from the 

Commission that the form was filed will 

be temporarily registered for purposes of 

Section 15B47 until the earlier of: (1) 

The date that the municipal advisor’s 

registration is approved or disapproved 

by the Commission pursuant to a final 

rule adopted by the Commission 

establishing another manner of 

registration of municipal advisors and 

prescribing a form for such purpose; 48

(2) the date on which the municipal 

advisor’s temporary registration is 

rescinded by the Commission; or (3) the 

expiration of the interim final temporary 

rule on December 31, 2011. Comment is 

requested concerning the December 31, 

2011 expiration date; would an earlier 

or later date be more appropriate? 

III. Other Matters 

The Administrative Procedure Act 

generally requires an agency to publish 

notice of a proposed rulemaking in the 

Federal Register.49 This requirement 

does not apply, however, if the agency 

‘‘for good cause finds * * * that notice 

and public procedure are impracticable, 

unnecessary, or contrary to the public 

interest.’’ 50 Further, the Administrative 

Procedure Act also generally requires 

that an agency publish an adopted rule 

in the Federal Register 30 days before 

it becomes effective.51 This requirement 

does not apply, however, if the agency 

finds good cause for making the rule 

effective sooner.52 The Commission 

finds, for good cause, that notice and 

solicitation of comment before adopting 

the new rules are impracticable, 

unnecessary, or contrary to the public 

interest. 

For the reasons discussed throughout 

this release, the Commission finds good 

cause to act immediately to adopt these 

rules on an interim final temporary 

basis. The Dodd-Frank Act amended 

Section 15B(a)(2) of the Exchange Act to 

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54472 Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 

53See Section 975(a) of the Dodd-Frank Act. 

54This finding also satisfies the requirements of 

5 U.S.C. 808(2), allowing the rule and form to 

become effective notwithstanding the requirement 

of 5 U.S.C. 801 (if a Federal agency finds that the 

notice and public comment are ‘‘impracticable, 

unnecessary or contrary to the public interest,’’ a 

rule ‘‘shall take effect at such time as the Federal 

agency promulgating the rule determines’’). 

55 44 U.S.C. 3501 et seq. 

56See paragraphs (a) and (i) of Section 975 of the 

Dodd-Frank Act. 

provide that, effective on October 1, 

2010, ‘‘[i]t shall be unlawful for a 

municipal advisor to provide advice to 

or on behalf of a municipal entity or 

obligated person with respect to 

municipal financial products or the 

issuance of municipal securities, or to 

undertake a solicitation of a municipal 

entity or obligated person, unless the 

municipal advisor is registered * * *’’ 

with the Commission.53 The 

Commission is adopting an interim final 

temporary rule in order to allow 

municipal advisors temporarily to 

satisfy the registration requirement in 

order that they may continue to act as 

municipal advisors on and after October 

1, 2010. Absent such means to register, 

municipal advisors would likely have to 

cease providing all municipal advisory 

services, which may have a significant 

adverse impact on their businesses and 

on municipal entities and obligated 

persons engaged in issuing municipal 

securities or other activities for which 

they obtain the advice of a municipal 

advisor. Some municipal entities and 

obligated persons do not access the 

capital markets frequently and depend 

heavily on their municipal advisors in 

connection with offerings of municipal 

securities. In addition, some municipal 

entities and obligated persons, such as 

large or frequent issuers, often have 

complex financial plans and large 

borrowing needs and use municipal 

advisors to supply independent, expert 

advice concerning long term financial 

planning and the use of swaps and other 

sophisticated financial products. The 

interim final temporary rule is designed 

to provide a method by which 

municipal advisors may continue to 

provide municipal advisory services to 

municipal entities and obligated 

persons without violating Section 

15B(a)(2) of the Exchange Act. 

The Commission is requesting 

comments on the interim final 

temporary rule and will carefully 

consider any comments received and 

respond to them as necessary or 

appropriate. The interim final 

temporary rule will expire on December 

31, 2011. Setting a termination date for 

the interim final temporary rule will 

necessitate further Commission action 

no later than the end of that period. The 

Commission finds that there is good 

cause to have the rule effective as an 

interim final temporary rule on October 

1, 2010, and that notice and public 

procedure in advance of effectiveness of 

the interim final temporary rule are 

impracticable, unnecessary and contrary 

to the public interest.54

IV. Paperwork Reduction Act 

A. Background 

Rule 15Ba2–6T and Form MA–T 

contain ‘‘collection of information’’ 

requirements within the meaning of the 

Paperwork Reduction Act of 1995 

(‘‘Paperwork Reduction Act’’ or 

‘‘PRA’’).55 The title for the collection of 

information is ‘‘Temporary Registration 

of Municipal Advisors—Form MA–T’’ 

and the OMB control number for the 

collection of information is 3235–0659. 

The Commission has submitted these 

requirements to the Office of 

Management and Budget (‘‘OMB’’) for 

review and approval in accordance with 

44 U.S.C. 3507(j) and 5 CFR 1320.13. 

Separately, the Commission has 

submitted the collection of information 

to OMB for review and approval in 

accordance with 44 U.S.C. 3507(d) and 

5 CFR 1320.11. OMB has approved the 

collection of information related to 

Form MA–T on an emergency basis with 

an expiration date of March 31, 2011. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. As discussed above, 

Section 15B of the Exchange Act, as 

amended by the Dodd-Frank Act, 

requires municipal advisors (as defined 

in Section 975 of the Dodd-Frank Act) 

to register with the Commission by 

October 1, 2010.56 As a transitional step 

to the implementation of a final 

permanent registration program, the 

Commission is today adopting, on an 

interim final basis, new Rule 15Ba2–6T, 

which will permit municipal advisors to 

temporarily satisfy the registration 

requirement. 

Rule 15Ba2–6T and Form MA–T will 

require a municipal advisor to: 

• Provide, in Item 1 of Form MA–T, 

basic identifying information, including 

name; address; telephone number; email address; fax number and Web site 

address, if any; and Employer 

Identification Number (but not Social 

Security Number, in the case, for 

example, of a sole proprietor). If the 

municipal advisor is also registered 

with the Commission as an investment 

adviser, broker, dealer, or municipal 

securities dealer, it will be required to 

provide its Commission file number(s), 

and will be required to provide its CRD 

number under FINRA’s CRD system or 

under IARD, if it has one; 

• Indicate, in Item 2 of Form MA–T, 

what type of municipal advisory 

services it provides by checking one or 

more of seven activities listed on Form 

MA–T and/or by describing any other 

activities; and 

• Answer ‘‘Yes’’ or ‘‘No’’ in Item 3 of 

Form MA–T to approximately 24 

questions concerning any convictions 

of—or any guilty or nolo contendere 

pleas by—the municipal advisor or any 

of its associated municipal advisor 

professionals in a felony case over the 

last ten years, and any pending felony 

charges. It will also ask for information 

regarding the municipal advisor or any 

of its associated municipal advisor 

professionals concerning any 

convictions, guilty or nolo contendere 

pleas, or pending charges with respect 

to a misdemeanor or conspiracy to 

commit an offense involving 

investments or investment-related 

business, fraud, false statements, 

omissions, wrongful taking of property, 

bribery, perjury, forgery, counterfeiting, 

or extortion during the last ten years. 

Form MA–T will similarly require 

disclosure of disciplinary sanctions 

imposed by the Commission, the 

Commodity Futures Trading 

Commission, and other Federal, State, 

or foreign regulatory authorities, or by 

self-regulatory agencies, organizations 

and commodity exchanges. In addition, 

it will inquire about injunctions issued 

by domestic or foreign courts in 

connection with investment-related 

activities, adverse findings by such 

courts concerning investment-related 

statutes or regulations and pending civil 

proceedings that could result in an 

injunction or finding. 

On the execution page of Form 

MA–T, the municipal advisor will be 

required to consent to service of any 

civil action brought by, or notice of 

proceeding before the Commission or 

SRO in connection with its municipal 

advisory services via registered or 

certified mail or confirm telegram to its 

contact person. The signatory of Form 

MA–T on behalf of, and with the 

authority of, the municipal advisor will 

be required to represent that the 

information and statements contained in 

Form MA–T are current, true, and 

complete. 

Completion of Item 1 of Form MA–T 

involves supplying basic identifying 

information that should be readily 

available to municipal advisors. Item 2 

of Form MA–T describes seven types of 

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Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 54473 

57See Section 975(e) of the Dodd-Frank Act. 

58See supra text accompanying notes 37–38. 

59The Commission notes that some municipal 

advisors that are required to register under Rule 

15Ba2–6T will also be registered with the 

Commission as broker-dealers and/or investment 

advisers. The Commission believes that these 

persons could require less time to research and 

complete this temporary registration process to the 

extent information contained in those other 

registration(s) can be cross-referenced, avoiding the 

need to repeat information on Form MA–T. 

60Telephone call between Martha Mahan Haines, 

Commission, and Ernesto Lanza, General Counsel, 

MSRB on August 17, 2010 (estimating the number 

of persons required to complete Form MA–T). The 

MSRB is the self-regulatory organization created by 

Congress to oversee the municipal securities 

market. 

61 500 hours = 1,000 (persons required to amend 

Form MA–T) × 0.5 (30 minutes) (estimated time to 

complete amended Form MA–T). 

62 3,000 = 2,500 hours (total estimated burden to 

complete Form MA–T for all municipal advisors) + 

500 hours (total estimated burden to complete 

amendments to Form MA–T for all municipal 

advisors). 

63 $400,000 = 1,000 (estimated number municipal 

advisors that hire outside attorney) × 1 hour 

(estimated time spent by outside attorney to help 

municipal advisor comply with rule) × $400 (hourly 

rate for an attorney). The $400 per hour figure for 

an attorney is from the Securities Industry and 

Financial Markets Association’s publication titled 

Management & Professional Earnings in the 

Securities Industry 2009, as modified by 

Commission staff to account for an 1,800 hour work 

year and multiplied by 5.35 to account for bonuses, 

firm size, employee benefits and overhead. 

services that may be provided by a 

municipal advisor, and an applicant is 

asked to check one or more boxes to 

identify any type that applies to it. If the 

municipal advisor provides other 

municipal advisory services that are not 

listed in the check-box list, the 

municipal advisor must provide a 

narrative description of the services. 

The Commission estimates that the 

paperwork burden of Items 1 and 2 will 

be approximately one-half hour. 

Providing answers to the questions on 

Item 3 of Form MA–T entails gathering 

the accurate disciplinary history 

information regarding the municipal 

advisor and its associated municipal 

advisor professionals. Form MA–T will 

permit disciplinary actions previously 

reported in connection with other 

filings (such as Form BD, Form ADV, or 

Form U4) to be provided by referencing 

such other filings. The Commission 

notes, however, that, while an 

‘‘associated person of a municipal 

advisor,’’ as defined under the DoddFrank Act, includes a broad category of 

control persons and employees,57 the 

information that must be provided in 

Item 3 of Form MA–T concerns a 

smaller subset of persons of this 

category, namely ‘‘municipal advisor 

professionals.’’ A municipal advisor 

professional for these purposes is 

defined to include only persons who are 

directly engaged in municipal advisory 

activities, persons in the supervisory 

chain overseeing these activities, and 

members of the executive or 

management committees of the 

municipal advisor.58

The Commission believes that the size 

of municipal advisors will likely range 

from sole proprietorships to large firms, 

and will include firms that provide 

municipal advisory services as part of a 

broader array of financial services 

serving many types of clients, and may 

have many associated municipal advisor 

professionals. Thus the paperwork 

burden will vary from applicant to 

applicant, depending on its size. 

The Commission has previously 

estimated that, in the case of Form 

ADV—a similar, but far more 

comprehensive form than Form MA–T, 

which must be completed for the 

registration of investment advisers—the 

average time necessary to complete the 

form is approximately 4.32 hours, and 

that estimate has been subject to notice 

and comment. The Commission believes 

that the paperwork burden of 

completing Form MA–T will be less 

than this amount of time because this 

form is less comprehensive than Form 

ADV and will thus require less time to 

complete. The Commission estimates 

that the average amount of time for a 

municipal advisor to complete Form 

MA–T is approximately 2.5 hours. This 

estimate includes all of the time 

necessary to research, evaluate, and 

gather all of the information that is 

requested in the form and all of the time 

necessary to complete and submit the 

form.59

Based on discussions with the MSRB, 

the Commission estimates that 

approximately 1,000 municipal advisors 

will be required to complete Form MA– 

T.60 Thus, the total burden hours will be 

approximately 2,500 hours. 

Once a municipal advisor temporarily 

satisfies the registration requirement, 

the municipal advisor must promptly 

amend Form MA–T when information 

concerning Items 1 or 3 on Form MA– 

T becomes inaccurate or to withdraw 

from registration. The Commission 

estimates that the average time 

necessary to complete an amended form 

would be approximately 30 minutes 

because only certain parts of the form 

will be completed for amendments. For 

the purposes of this PRA analysis, the 

Commission assumes that all 1,000 

municipal advisors would have to 

amend their forms once during the 

period September 1, 2010 and December 

31, 2011. The estimate of the number of 

municipal advisors that will submit 

amendments is likely to be lower than 

all 1,000 as some municipal advisors 

will not have any changes to their forms 

during this period. It is also likely that 

some of these 1,000 municipal advisors 

will have to submit more than one 

amendment. However, given the short 

transition period, the Commission 

believes that on balance its estimate of 

one amendment for each municipal 

advisors is conservative. Therefore, the 

total burden for these amendments 

during this period would be 500 

hours,61 and the total estimated 

paperwork burden for Form MA–T and 

keeping it properly updated is 3,000 

hours.62

In addition, the Commission believes 

that some municipal advisors will seek 

outside counsel to help them comply 

with the requirements of Rule 15Ba2–6T 

and Form MA–T. For PRA purposes, the 

Commission assumes that all 1,000 

municipal advisors will on average 

consult outside counsel for one hour to 

help them comply with the 

requirements. The Commission believes 

that the estimate of the number of 

municipal advisors that will consult 

outside counsel is likely to be lower 

than 1,000 as some municipal advisors 

will choose not to seek outside counsel 

or will rely entirely on in-house 

counsel. The Commission also 

recognizes that some municipal advisors 

will hire outside counsel for more than 

one hour and others may hire counsel 

for less than one hour. On balance, the 

Commission believes that its estimate 

that on average each municipal advisor 

will hire outside counsel for one hour 

is conservative. The Commission 

estimates that the total cost for all 

municipal advisors to hire outside 

counsel to review their compliance with 

the requirements of Rule 15Ba2–6T and 

Form MA–T to be approximately 

$400,000.63

B. Collection of Information Is 

Mandatory 

Any collection of information 

pursuant to Rule 15Ba2–6T and Form 

MA–T is a mandatory collection of 

information. 

C. Responses to Collection of 

Information Will Not Be Kept 

Confidential 

The collection of information made 

pursuant to Rule 15Ba2–6T will not be 

confidential and will be made publicly 

available. The collection of information 

that will be provided pursuant to the 

Form MA–T will be publicly available 

via the Internet. 

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54474 Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 

64 2,500 hours (total estimated hourly burden 

under the rule for all municipal advisors to 

complete a Form MA–T) × $294 (hourly rate for a 

Compliance Manager) = $735,000. The $294 per 

hour figure for a Compliance Manager is from the 

Securities Industry and Financial Markets 

Association’s publication titled Management & 

Professional Earnings in the Securities Industry 

2009, as modified by Commission staff to account 

for an 1,800 hour work year and multiplied by 5.35 

to account for bonuses, firm size, employee benefits 

and overhead. 

65 500 hours (total estimated hourly burden under 

the rule for all municipal advisors to complete an 

amended Form MA–T) × $294 (hourly rate for a 

Compliance Manager) = $147,000. The $294 per 

hour figure for a Compliance Manager is from the 

Securities Industry and Financial Markets 

Association’s publication titled Management & 

Professional Earnings in the Securities Industry 

2009, as modified by Commission staff to account 

for an 1,800 hour work year and multiplied by 5.35 

to account for bonuses, firm size, employee benefits 

and overhead. 

66See supra Section IV.A. 

67See Securities Exchange Act Release No. 

62184A (May 26, 2010), 75 FR at 33101 (June 10, 

2010). 

V. Cost-Benefit Analysis 

A. Introduction 

The Commission is sensitive to the 

costs and benefits of its rules. The 

Commission has identified certain costs 

and benefits of Rule 15Ba2–6T and 

Form MA–T and request comment on 

all aspects of this cost-benefit analysis. 

Where possible, the Commission 

requests that commenters provide 

empirical data to support any positions 

advanced. 

The Commission is adopting, as an 

interim final temporary rule, Rule 

15Ba2–6T and Form MA–T for the 

temporary registration of municipal 

advisors. The Commission is adopting 

this rule and Form MA–T in response to 

the changes implemented by the DoddFrank Act, which prohibits municipal 

advisors from providing municipal 

advisory services to a municipal entity 

or obligated person, unless the 

municipal advisor is registered. 

B. Benefits 

Section 975 of the Dodd-Frank Act 

generally is intended to strengthen 

oversight of municipal securities and 

broaden current municipal securities 

market protections to cover, among 

other things, previously unregulated 

market participants. Rule 15Ba2–6T and 

Form MA–T are designed to meet this 

objective temporarily by requiring each 

municipal advisor to provide basic 

identifying information about itself, a 

description of its activities, and facts 

regarding its disciplinary history, if any, 

and that of any of its associated 

municipal advisor professionals. This 

transitional registration process will 

allow municipal advisors to temporarily 

satisfy the registration requirement in 

order that they may continue to act as 

municipal advisors on and after October 

1, 2010. Absent such a means to register, 

municipal advisors would have to cease 

providing municipal advisory services, 

which may have a significant adverse 

impact on their businesses and on 

municipal entities and obligated 

persons engaged in issuing municipal 

securities or other activities for which 

they obtain the advice of a municipal 

advisor. The interim final temporary 

rule is designed to provide a method by 

which municipal advisors may continue 

to provide municipal advisory services 

to municipal entities and obligated 

persons without violating Section 

15B(a)(2) of the Exchange Act. 

In addition, disclosure of the 

disciplinary history of every municipal 

advisor—sole proprietor or large firm— 

and every municipal advisor 

professional will become available, not 

only to regulators, but also to all 

members of the investing community, 

benefitting investors, municipal entities 

and the general public in the area of 

municipal investments. Municipal 

entities issuing securities and obligated 

persons will have access to this 

information and thus will be more fully 

informed when choosing those who 

would guide them and issue and 

support quality investment vehicles. 

Also, the standardization of the required 

disclosure format would lower the costs 

for municipal entities in comparing 

municipal advisors. Lower costs 

generally make the market more 

competitive. The Commission believes 

that this will benefit the municipal 

market, and ultimately could benefit 

State and local governments that raise 

funds for the good and welfare of their 

citizens, including roads, bridges, 

energy and other necessary utility 

infrastructures, as well as education, 

health, safety, and the wide range of 

other benefits and social support that 

these governments provide. 

C. Costs 

In promulgating the provisions of 

Section 975 of the Dodd-Frank Act, 

Congress established a mandatory 

registration regime for municipal 

advisors. The establishment of this 

Congressionally-mandated regulatory 

regime for municipal advisors will 

impose burdens on municipal advisors 

to register with the Commission and to 

comply with Commission rules. In order 

to temporarily satisfy the registration 

requirement, municipal advisors must 

complete Form MA–T on the 

Commission’s public Web site. The 

Commission believes that municipal 

advisors will principally incur these 

costs when the rule and the form take 

effect on October 1, 2010. As noted in 

the PRA section above, the Commission 

estimated that the total one-time 

reporting burden for all municipal 

advisors to complete Form MA–T would 

be approximately 2,500 hours. Based on 

this estimate, the Commission believes 

the total labor cost for all municipal 

advisors to complete the Form MA–T 

will be approximately $735,000.64

Municipal advisors will also incur costs 

when they need to amend or withdraw 

the registration. As noted in the PRA 

section above, the Commission 

estimated that the total hourly burden 

for all municipal advisors to complete 

an amended Form MA–T would be 

approximately 500 hours. Based on this 

estimate, the Commission believes the 

total annual labor cost for all municipal 

advisors to complete an amended Form 

MA–T will be approximately 

$147,000.65 In addition to the costs 

associated with completing and 

amending Form MA–T, the Commission 

also believes that some persons will 

incur costs associated with hiring 

outside counsel to help them determine 

whether they must file and to comply 

with the requirements of Rule 15Ba2–6T 

and Form MA–T. As noted in the PRA 

section above, the Commission 

estimated that the total cost for all 

municipal advisors to hire outside 

counsel to review their compliance with 

the requirements of Rule 15Ba2–6T and 

Form MA–T to be approximately 

$400,000.66

The Commission does not believe that 

the process of temporary registration 

through Form MA–T will be particularly 

burdensome—given the brevity of the 

form, its convenient availability online, 

and the automated manner of 

submitting the information. However, 

costs will be incurred in completing the 

disciplinary information sections of 

Form MA–T, which will demand care in 

compiling legally accurate statements of 

disciplinary history of a municipal 

advisor and its associated municipal 

advisor professionals. The Commission 

has reflected these estimated costs 

discussed above. The Commission also 

recognizes the possibility that the cost 

of registering could be passed on to the 

municipal entity customers of 

municipal advisors in the form of higher 

fees. Given the relatively small 

magnitude of these costs and the large 

number of municipal entity issuers 

(nearly 51,000 issuers as of 2009),67 the 

Commission expects any increase in 

municipal advisory fees attributable to 

registration would be minimal. 

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Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 54475 

68 15 U.S.C. 78c(f). 

69 15 U.S.C. 78w(a)(2). 

70See 5 U.S.C. 604(a). 

71Although the requirements of the RFA are not 

applicable to Rules adopted under the 

Administrative Procedures Act’s ‘‘good cause’’ 

exception, see 5 U.S.C. 601(2) (defining ‘‘rule’’ and 

notice requirement under the Administrative 

Procedures Act), the Commission nevertheless 

prepared this Final Regulatory Flexibility Act 

Analysis. 

D. Request for Comment 

The Commission requests comment 

on all aspects of this cost-benefit 

analysis. Commenters should address in 

particular whether Rule 15Ba2–6T and 

Form MA–T will generate the 

anticipated benefits or impose any other 

costs in municipal advisors. The 

Commission also requests comment as 

to any costs or benefits associated with 

Rule 15Ba2–6T and Form MA–T that 

may not have been considered here, 

including whether the costs associated 

with the rule will have a 

disproportionate impact on certain 

municipal advisors. 

VI. Promotion of Efficiency, 

Competition, and Capital Formation 

Section 3(f) of the Exchange Act 

requires the Commission, whenever it 

engages in rulemaking and is required to 

consider or determine whether an action 

is necessary or appropriate in the public 

interest, to consider, in addition to the 

protection of investors, whether the 

action would promote efficiency, 

competition and capital formation.68 In 

addition, Section 23(a)(2) of the 

Exchange Act requires the Commission, 

when making rules under the Exchange 

Act, to consider the impact such rules 

would have on competition.69 Exchange 

Act Section 23(a)(2) prohibits the 

Commission from adopting any rule that 

would impose a burden on competition 

not necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. As discussed below, the 

Commission believes that Rule 15Ba2– 

6T may promote efficiency and 

competition, and is likely to have no 

impact on capital formation. 

A. Efficiency 

In adopting Rule 15Ba2–6T, the 

Commission has considered its effect on 

efficiency, competition and capital 

formation. Rule 15Ba2–6T and Form 

MA–T are designed to improve the 

efficiency of the Commission’s oversight 

of municipal advisors, by requiring the 

registration and identification to the 

Commission, for the first time, of people 

engaged in providing municipal 

advisory services. The temporary 

registration of municipal advisors will 

facilitate the Congressional mandate to 

register municipal advisors and 

establish an efficient system to provide 

information to the Commission, the 

public, and municipal entities. 

B. Competition 

The Commission also believes that 

adoption of Rule 15Ba2–6T may 

promote competition of municipal 

advisory service providers by allowing 

municipal advisors to temporarily 

satisfy the registration requirement that 

is mandated by October 1, 2010 under 

the Dodd-Frank Act and thus be 

permitted to continue to provide advice 

to, or on behalf of, a municipal entity or 

obligated person with respect to 

municipal financial products or the 

issuance of municipal securities, or to 

undertake a solicitation of a municipal 

entity or obligated person on October 1, 

2010. In addition, it may promote 

competition by making uniform 

information, especially disciplinary 

information, for all municipal advisors 

available to consumers of the services of 

municipal advisors on which to base a 

selection. Furthermore, because all 

municipal advisors must register, none 

would be placed at a competitive 

advantage or disadvantage over others. 

The Commission believes that Rule 

15Ba2–6T will not result in a burden on 

competition that is not necessary or 

appropriate in furtherance of the 

Exchange Act. 

C. Capital Formation 

The Commission has also considered 

the effect of Rule 15Ba2–6T on capital 

formation. Rule 15Ba2–6T allows 

municipal entities and obligated 

persons issuing securities to better 

choose their advisors based on the 

information required to be disclosed by 

Rule 15Ba2–6T; however, this benefit 

would most likely only affect the way in 

which municipal entities and obligated 

persons choose municipal advisors, but 

would likely have no impact on capital 

formation because it does not affect the 

borrowing needs of municipal entities 

or obligated persons. Therefore, the 

Commission believes that the rule is not 

likely to have an effect on capital 

formation. 

The Commission requests comment 

on this analysis of whether the adoption 

of Rule 15Ba2–6T will promote 

efficiency, competition, and capital 

formation or have an impact or burden 

on competition. The Commission seeks 

comments on whether Rule 15Ba2–6T 

would promote capital formation. 

Specifically, the Commission requests 

comments on the extent to which the 

ability of municipal entities and 

obligated persons to obtain information 

concerning registered municipal 

advisors from Form MA–T before hiring 

a municipal advisor would promote 

capital formation. In addition, the 

Commission seeks comments on the 

manner and extent to which Rule 

15Ba2–6T would assist municipal 

entities and obligated persons to raise 

additional capital. The Commission 

requests commenters to provide 

empirical data and other factual support 

for their views, if possible. 

VII. Final Regulatory Flexibility 

Analysis 

The Commission has prepared this 

Final Regulatory Flexibility Analysis 

(FRFA) in accordance with Section 

604(a) of the Regulatory Flexibility Act 

(RFA).70 This FRFA relates to new Rule 

15Ba2–6T under the Exchange Act, 

which will permit municipal advisors to 

temporarily satisfy the registration 

requirement set forth in the Dodd-Frank 

Act until such time as the Commission 

promulgates a final permanent 

regulatory program.71

Section 975 of the Dodd-Frank Act 

generally is intended to strengthen 

oversight of municipal securities and 

broaden current municipal securities 

market protections to cover, among 

other things, previously unregulated 

market participants. Rule 15Ba2–6T and 

Form MA–T are designed to meet this 

mandate by requiring each municipal 

advisor to provide basic identifying 

information about itself, a description of 

its activities, and facts regarding its 

disciplinary history, if any, and that of 

any of its associated persons who are 

municipal advisor professionals. 

A. Need for and Objectives of the Rule 

and Form MA–T 

Sections I–III of this Release describe 

the reasons for and objectives of interim 

final temporary Rule 15Ba2–6T and 

Form MA–T. As discussed above, the 

Commission is adopting an interim final 

temporary rule that establishes a means 

for municipal advisors, as defined in the 

Dodd-Frank Act, to satisfy temporarily 

the requirement that they register with 

the Commission by October 1, 2010. 

This rule and form are necessary so that 

municipal advisors can meet this 

Congressional mandate and continue to 

function as municipal advisors. 

B. Small Entities Subject to the Rule 

In developing Rule 15Ba2–6T and 

Form MA–T, the Commission has 

considered their potential impact on 

small entities that will be subject to the 

rule. All municipal advisors must 

register with the Commission, including 

small entities, and will be subject to the 

rule. Because ‘‘municipal advisor’’ is a 

new term under the Dodd-Frank Act, 

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54476 Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 

72 17 CFR 240.0–10(c)(1). 

73See supra Section IV.A. 

74See Securities Exchange Act Release No. 34– 

61908 (April 14, 2010), 75 FR 21456, 21483 (April 

23, 2010). 

75 170 = 1,000 (estimated number of municipal 

advisors subject to the Rule) × .17 (estimated 

percentage of municipal advisors that are small 

entities). 

76Sections I–III of this Release describe these 

requirements in more detail. 

77See supra Sections IV.A. and V.C. 

78See supra Section IV.A. 

79See supra Section V.C. 

80See supra Section IV.A. 

the Commission has not promulgated a 

rule to define which municipal advisors 

should be identified as a ‘‘small 

business’’ or ‘‘small organization’’ for 

purposes of the RFA. However, the 

Commission has referred to its 

definitions of small entities in the 

Exchange Act and Investment Advisers 

Act to inform this FRFA. 

Paragraph (c)(1) of Rule 0–10 under 

the Exchange Act 72 states that the terms 

‘‘small business’’ or ‘‘small organization,’’ 

when referring to a broker-dealer, means 

a broker or dealer that has total capital 

(net worth plus subordinated liabilities) 

of less than $500,000 on the date in the 

prior fiscal year as of which its audited 

financial statements were prepared 

pursuant to Section 240.17a–5(d); and is 

not affiliated with any person (other 

than a natural person) that is not a small 

business or small organization. As 

discussed above, based on industry 

sources, the Commission estimates that 

approximately 1,000 municipal advisors 

must complete Form MA–T on the 

Commission’s public Web site.73

Industry sources were unable to provide 

an estimate, based on the definitions 

discussed above, of how many of these 

advisors would be a small business or 

small organization. However, for the 

purpose of this FRFA, the Commission 

believes that the proportion of small 

municipal advisors subject to the rule to 

all registered municipal advisors subject 

to the rule may be similar to the 

proportion of small registered brokerdealers to all registered broker-dealers. 

The Commission has previously 

estimated that approximately 17% of all 

broker-dealers are ‘‘small’’ for the 

purposes of the RFA.74 Therefore, the 

Commission estimates that 170 

municipal advisors will be small 

entities subject to the rule.75

The Commission requests comment 

on its estimate of how many municipal 

advisors would be small entities for 

purposes of the RFA. Specifically, the 

Commission seeks comment on whether 

there are alternative ways to estimate 

the number of municipal advisors that 

are small entities. Is the proportion of 

small registered municipal advisors to 

all registered municipal advisors for 

purposes of the RFA similar to the 

proportion of small registered brokerdealers to all registered broker-dealers? 

As noted above, the Commission has 

defined in Rule 0–10 small entity under 

the Exchange Act for purposes of the 

RFA. Should the Commission consider 

including in that rule criteria 

specifically related to municipal 

advisors? For example, should it depend 

on the number of municipalities the 

municipal advisor advises? On the 

number of issuances with respect to 

which the municipal advisor provides 

advice? On the total amount of 

issuances outstanding for the 

municipalities the advisor advises? On 

other factors or a combination of 

factors? 

C. Projected Reporting, Recordkeeping, 

and Other Compliance Requirements 

Rule 15Ba2–6T and Form MA–T 

impose certain reporting and 

compliance requirements on small 

municipal advisors, requiring them to 

provide basic identifying information 

about themselves, a description of their 

activities, and facts regarding their 

disciplinary history, if any, and that of 

any of their associated persons who are 

municipal advisor professionals.76 The 

rule does not impose any recordkeeping 

requirements. 

As discussed above, current 

municipal advisors are required by 

statute to register with the Commission 

by October 1, 2010 by completing Form 

MA–T. Form MA–T will be accessible 

through a link located on the 

Commission’s Web site, http:// 

www.sec.gov, beginning on or about 

September 1, 2010, at which time 

municipal advisors will be able to 

submit forms for temporary registration 

and to amend and withdraw such 

registrations through the Commission’s 

Web site. 

As noted above, the Commission 

estimated that the total initial reporting 

burden for all municipal advisors to 

complete Form MA–T would be 

approximately 2,500 hours and the total 

associated cost to complete the Form is 

approximately $735,000.77 Municipal 

advisors will also incur costs when they 

need to amend or withdraw the 

registration. As noted above, the 

Commission estimated that the total 

hourly burden for all municipal 

advisors to complete an amended Form 

MA–T would be approximately 500 

hours.78 The Commission estimates that 

the total annual labor cost for all 

municipal advisors to complete an 

amended Form MA–T will be 

approximately $147,000.79 In addition 

to the costs associated with completing 

and amending Form MA–T, the 

Commission also believes that some 

municipal advisors will incur costs 

associated with hiring outside counsel 

to determine the need to file and to 

comply with the requirements of Rule 

15Ba2–6T and Form MA–T. As noted 

above, the Commission estimates that 

the total costs for all municipal advisors 

to hire outside counsel to be 

approximately $400,000.80

D. Agency Action To Minimize Effect on 

Small Entities 

As required by the RFA, the 

Commission has considered alternatives 

that would accomplish the stated 

objectives, while minimizing any 

significant adverse impact on small 

entities. Rule 15Ba2–6T should not 

adversely affect small entities because it 

imposes minimal new reporting 

requirements to complete Form MA–T 

and submit it electronically on the 

Commission’s Web site. The 

Commission does not believe that it is 

appropriate to develop separate 

requirements for small entities because 

all municipal advisors should be subject 

to the same temporary registration 

process. In developing Rule 15Ba2–6T 

and Form MA–T, the Commission 

considered requiring additional 

information from municipal advisors 

and using different electronic delivery 

mechanisms. After taking into account 

the short timeframe for municipal 

advisors to comply with the 

Congressional mandate to register with 

the Commission, the Commission 

determined that the Rule 15Ba2–6T and 

Form MA–T strikes the appropriate 

balance of minimizing the burden on 

small municipal advisors while 

allowing the Commission to meet its 

mandate under the Dodd-Frank Act. 

Counteracting these relatively minor 

costs is the benefit that small advisors 

in particular would obtain under the 

new regime. The registration of 

municipal advisors (large or small) 

would improve the availability of 

information and thus reduce 

information research costs of investors 

and issuers in the municipal bond 

market. These information research 

costs are generally higher with respect 

to smaller entities, about which it is 

often more difficult to obtain 

information than for large entities. The 

increased availability of information 

about smaller entities may have the 

result that more investors and issuers 

will locate those entities and be willing 

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Federal Register / Vol. 75, No. 173 / Wednesday, September 8, 2010 / Rules and Regulations 54477 

81See 5 U.S.C. 603(c). 

to engage their services. Thus, smaller 

advisors are likely to benefit 

proportionally more from the improved 

and relatively standardized disclosure 

than the larger, more established 

entities, which might already be 

disclosing information for other 

purposes (for example, if they are 

broker-dealers, or underwriters). 

E. Duplicative, Overlapping, or 

Conflicting Federal Rules 

The Commission believes that there 

are no rules that duplicate, overlap, or 

conflict with Rule 15Ba2–6T. 

F. Significant Alternatives 

The RFA directs the Commission to 

consider significant alternatives that 

would accomplish the stated objective, 

while minimizing any significant 

adverse impact on small entities.81 In 

connection with the interim final 

temporary rule, the Commission 

considered the following alternatives: 

(1) Establishing different compliance or 

reporting standards that take into 

account the resources available to small 

entities; (2) clarifying, consolidating, or 

simplifying compliance requirements 

under the rule; (3) using performance 

rather than design standards; and (4) 

exempting small municipal advisers 

from coverage of all or part of the Rule 

15Ba2–6T and Form MA–T. 

The Commission believes that the 

interim final temporary rule strikes the 

appropriate balance between 

minimizing the burden on small 

municipal advisors and allowing the 

Commission to meet its mandate under 

the Dodd-Frank Act to provide an 

appropriate and meaningful process for 

registering municipal advisors. The 

Commission does not believe that 

establishing different compliance or 

reporting standards is necessary because 

the information requested in Form MA– 

T is basic and minimally necessary to 

meet the statutory goals of the DoddFrank Act. Moreover, the Commission 

believes that completing and submitting 

Form MA–T on the Commission’s Web 

site should not be unduly burdensome 

or costly for municipal advisors, 

including small municipal advisors. In 

developing Rule 15Ba2–6T and Form 

MA–T, the Commission considered 

requiring additional information from 

municipal advisors and using different 

electronic delivery mechanisms. In light 

of the relatively short time frame for 

compliance and the resources available 

to small municipal issuers, the 

Commission decided that the 

information in the Form MA–T and the 

electronic submission requirements are 

simple, straightforward, and take into 

account the resources available to all 

municipal advisors, including small 

municipal advisors. The Commission 

believes that it is inconsistent with the 

goals of a uniform registration system to 

use performance standards rather than 

design standards. Further, the 

Commission believes that it would be 

inconsistent with the purposes of the 

Dodd-Frank Act to exempt small entities 

entirely from having to comply with the 

interim final temporary rule. 

G. General Request for Comment 

The Commission is soliciting 

comments regarding the analysis. The 

Commission requests comment on the 

number of small entities that will be 

subjected to the rule and whether the 

interim final temporary rule will have 

any effects that have not been discussed. 

The Commission requests that 

commenters describe the nature of any 

effects on small entities subject to the 

rule and provide empirical data to 

support the nature and extent of the 

effect. 

VIII. Statutory Authority 

Pursuant to the Exchange Act, and 

particularly Sections 15B (15 U.S.C. 

78o–4) and 36 (15 U.S.C. 78mm), the 

Commission is adopting § 240.15Ba2–6T 

and 249.1300T of Title 17 of the Code 

of Federal Regulations in the manner set 

forth below. 

List of Subjects in 17 CFR Parts 240 and 

249 

Reporting and recordkeeping 

requirements, Municipal advisors, 

temporary registration requirements. 

Text of Rule 

■ For the reasons set out in the 

preamble, Title 17, Chapter II, of the 

Code of Federal Regulations is amended 

as follows. 

PART 240—GENERAL RULES AND 

REGULATIONS, SECURITIES 

EXCHANGE ACT OF 1934 

■ 1. The general authority citation for 

part 240 is revised to read as follows: 

Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 

77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn, 

77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 

78j–1, 78k, 78k–1, 78l, 78m, 78n, 78o, 78o– 

4, 78p, 78q, 78s, 78u–5, 78w, 78x, 78ll, 

78mm, 80a–20, 80a–23, 80a–29, 80a–37, 80b– 

3, 80b–4, 80b–11, and 7201 et seq.; 18 U.S.C. 

1350; and 12 U.S.C. 5221(e)(3), unless 

otherwise noted. 

* * * * * 

■ 2. Section 240.15Ba2–6T is added to 

read as follows. 

§ 240.15Ba2–6T Temporary registration as 

a municipal advisor; required amendments; 

and withdrawal from temporary registration. 

(a) A municipal advisor (as defined in 

Section 15B(e)(4) of the Securities 

Exchange Act of 1934 (the ‘‘Act’’) (15 

U.S.C. 78o–4(e)(4)) shall file with the 

Commission, pursuant to Section 15B(a) 

(15 U.S.C. 78o–4(a)) of the Act, the 

information set forth on Form MA–T (17 

CFR 249.1300T) electronically through 

the Commission’s Internet Web site 

(http://www.sec.gov) to temporarily 

register or to withdraw from temporary 

registration. 

(b) A temporary registration must 

promptly be amended: 

(1) Whenever any information 

concerning Items 1 or 3 of Form MA– 

T (17 CFR 249.1300T) have become 

inaccurate in any way; and 

(2) Whenever a municipal advisor 

wishes to withdraw from registration. 

(c) Every initial registration and each 

amendment to a registration or 

withdrawal from registration filed 

pursuant to this rule shall constitute a 

‘‘report’’ within the meaning of Sections 

15B(c) (15 U.S.C. 78o–4(c)), 17(a) (15 

U.S.C. 78q(a)), 18(a) (15 U.S.C. 78r(a)) 

and 32(a) (15 U.S.C. 78ff(a)) and other 

applicable provisions of the Act. 

(d) Each Form MA–T (17 CFR 

249.1300T), including each amendment 

to a registration or withdrawal from 

registration, is considered filed with the 

Commission upon its completion on the 

Commission web page established for 

that purpose and the Commission has 

sent confirmation that the form was 

filed to the municipal advisor. 

(e) All temporary registrations 

submitted pursuant to this section will 

expire on the earlier of: 

(1) The date that the municipal 

advisor’s registration is approved or 

disapproved by the Commission 

pursuant to a final rule adopted by the 

Commission establishing another 

manner of registration of municipal 

advisors and prescribing a form for such 

purpose; 

(2) The date on which the municipal 

advisor’s temporary registration is 

rescinded by the Commission; or 

(3) On December 31, 2011. 

(f) This section will expire on 

December 31, 2011. 

PART 249—FORMS, SECURITIES 

EXCHANGE ACT OF 1934 

■ 3. The authority citation for part 249 

continues to read in part as follows: 

Authority: 15 U.S.C. 78a et seq. and 7201; 

and 18 U.S.C. 1350 et seq. unless otherwise 

noted. 

* * * * * 

■ 4. Subpart N, consisting of 

§ 249.1300T, is added to read as follows. 

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Subpart N—Forms for Registration of 

Municipal Advisors 

§ 249.1300T Form MA–T—For temporary 

registration as a municipal advisor, and for 

amendments to, and withdrawals from, 

temporary registration. 

The form shall be used for temporary 

registration as a municipal advisor, and 

for amendments to, and withdrawals 

from, temporary registration pursuant to 

Section 15B of the Exchange Act, (15 

U.S.C. 78o). 

[Note: The text of Form MA–T does not, and 

the amendments will not, appear in the Code 

of Federal Regulations.] 

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By the Commission. Dated: September 1, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–22255 Filed 9–7–10; 8:45 am] 

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