Document ID: SEC-2010-1358-0001
Agency: sec
Document Type: Rule
Title: Temporary Registration of Municipal Advisors
Posted Date: 2010-09-08T04:00Z

[Federal Register: September 8, 2010 (Volume 75, Number 173)]
[Rules and Regulations]               
[Page 54465-54491]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08se10-4]                         

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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.

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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.
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    \1\ See Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Pub. L. 111-203 (2010).

DATES: Effective Date: October 1, 2010 through December 31, 2011. 
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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 15Ba2-6T 
\2\ 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.
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    \2\ 17 CFR 240.15Ba2-6T.
    \3\ 15 U.S.C. 78a et seq.
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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\
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    \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.
    \5\ See infra Section II.A.
    \6\ See Section 975(a)(1)(B) of the Dodd-Frank Act; 15 U.S.C. 
78o-4(a)(1)(B).
    \7\ See Section 975(i) of the Dodd-Frank Act.
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    The Commission is today adopting, on an interim final temporary 
basis, new Rule 15Ba2-6T \8\ 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

[[Page 54466]]

site on new Form MA-T, which is designed for this purpose.\9\
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    \8\ 17 CFR 240.15Ba2-6T.
    \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.
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    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.
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    \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.
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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.
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    \11\ For 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.
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    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.
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    \12\ See Section 15B(a)(4) of the Exchange Act, as amended by 
Section 975(a)(4) of the Dodd-Frank Act.
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    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 Dodd-Frank 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

[[Page 54467]]

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\
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    \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.
    \16\ The 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.
    \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.
    \18\ These 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.
    \19\ The 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.
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    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\
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    \21\ See Section 975(e) of the Dodd-Frank Act.
    \22\ The 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.
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    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\
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    \23\ Every 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.
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    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

[[Page 54468]]

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 cross-
reference 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 cross-reference disciplinary information 
that is submitted to the CRD or IARD systems with that submitted on 
Form MA-T.
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    \24\ See 15 U.S.C. 78o-4(c)(7).
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    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.
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    \25\ See Section 15B(e)(4) of the Exchange Act as added by 
Section 975(e)(4) of the Dodd-Frank Act.
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    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.
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    \26\ See Section 17(a)(1) of the Exchange Act, as amended by 
Section 975(h) of the Dodd-Frank Act.
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    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

[[Page 54469]]

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.
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    \27\ Such 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.
    \28\ See 15 U.S.C. 78o(b)(4)(A).
    \29\ See 15 U.S.C. 78o(b)(4)(D).
    \30\ See 15 U.S.C. 78o(b)(4)(E).
    \31\ See 15 U.S.C. 78o(b)(4)(H).
    \32\ See 15 U.S.C. 78o(b)(4)(G).
    \33\ See 15 U.S.C. 78o(b)(4)(B).
    \34\ See 15 U.S.C. 78o(b)(4)(C).
    \35\ The Commission has the same authority with respect to 
municipal securities dealers. See 15 U.S.C. 78o-4(c).
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    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.
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    \36\ See id.
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    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.
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    \37\ 17 CFR 249.501.
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    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 day-to-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.
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    \38\ Section 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.
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    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.
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    \39\ With regard to the orders entered by SEC and CFTC, no time 
limit is placed on disclosure. See infra Item 3(d).
---------------------------------------------------------------------------

    With respect to all other matters identified on Form MA-T 
(including Federal, State, and foreign regulatory actions and actions 
taken by self-regulatory 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\
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    \40\ See Section 15B(c)(2) of the Exchange Act.
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    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?
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    \41\ The Commission notes that a municipal advisor only needs to 
report charges that are currently pending.
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    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,

[[Page 54470]]

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?
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    \42\ The Commission notes that a municipal advisor only needs to 
report charges that are currently pending.
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    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?
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    \43\ 17 CFR 279.1.
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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,

[[Page 54471]]

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\
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    \44\ See supra note 23.
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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.
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    \45\ See supra text accompanying notes 37-38.
    \46\ The 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,'' ``Investment-
Related,'' ``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.''
---------------------------------------------------------------------------

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 15B \47\ 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?
---------------------------------------------------------------------------

    \47\ See supra note 9.
    \48\ Approval of a municipal advisor's registration under the 
final permanent rule will replace and supersede a temporary 
registration.
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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.
---------------------------------------------------------------------------

    \49\ See 5 U.S.C. 553(b).
    \50\ See id.
    \51\ See 5 U.S.C. 553(d).
    \52\ See id.
---------------------------------------------------------------------------

    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

[[Page 54472]]

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.
---------------------------------------------------------------------------

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

    \54\ This 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'').
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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.
---------------------------------------------------------------------------

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

    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.
---------------------------------------------------------------------------

    \56\ See paragraphs (a) and (i) of Section 975 of the Dodd-Frank 
Act.
---------------------------------------------------------------------------

    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; e-mail 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

[[Page 54473]]

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 Dodd-Frank 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\
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    \57\ See Section 975(e) of the Dodd-Frank Act.
    \58\ See supra text accompanying notes 37-38.
---------------------------------------------------------------------------

    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\
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    \59\ The 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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \60\ Telephone 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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \61\ 500 hours = 1,000 (persons required to amend Form MA-T) x 
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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \63\ $400,000 = 1,000 (estimated number municipal advisors that 
hire outside attorney) x 1 hour (estimated time spent by outside 
attorney to help municipal advisor comply with rule) x $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.
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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.

[[Page 54474]]

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 Dodd-Frank 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\
---------------------------------------------------------------------------

    \64\ 2,500 hours (total estimated hourly burden under the rule 
for all municipal advisors to complete a Form MA-T) x $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) x $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.
    \66\ See supra Section IV.A.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \67\ See Securities Exchange Act Release No. 62184A (May 26, 
2010), 75 FR at 33101 (June 10, 2010).

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[[Page 54475]]

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.
---------------------------------------------------------------------------

    \68\ 15 U.S.C. 78c(f).
    \69\ 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \70\ See 5 U.S.C. 604(a).
    \71\ Although 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.
---------------------------------------------------------------------------

    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,

[[Page 54476]]

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 broker-dealers 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\
---------------------------------------------------------------------------

    \72\ 17 CFR 240.0-10(c)(1).
    \73\ See supra Section IV.A.
    \74\ See 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) x .17 (estimated percentage of municipal advisors that 
are small entities).
---------------------------------------------------------------------------

    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 broker-dealers 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.
---------------------------------------------------------------------------

    \76\ Sections I-III of this Release describe these requirements 
in more detail.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \77\ See supra Sections IV.A. and V.C.
    \78\ See supra Section IV.A.
    \79\ See supra Section V.C.
    \80\ See supra Section IV.A.
---------------------------------------------------------------------------

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

[[Page 54477]]

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.
---------------------------------------------------------------------------

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

    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 Dodd-Frank 
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 Sec.  
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

0
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

0
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.
* * * * *

0
2. Section 240.15Ba2-6T is added to read as follows.

Sec.  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

0
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.
* * * * *
0
4. Subpart N, consisting of Sec.  249.1300T, is added to read as 
follows.

[[Page 54478]]

Subpart N--Forms for Registration of Municipal Advisors

Sec.  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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[GRAPHIC] [TIFF OMITTED] TR08SE10.015

    By the Commission.

    Dated: September 1, 2010.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-22255 Filed 9-7-10; 8:45 am]
BILLING CODE 8010-01-C