Document ID: SEC-2013-1682-0001
Agency: sec
Document Type: Rule
Title: Registration of Municipal Advisors; Extension
Posted Date: 2013-09-30T04:00Z

[Federal Register Volume 78, Number 189 (Monday, September 30, 2013)]
[Rules and Regulations]
[Pages 59814-59817]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23519]

[[Page 59814]]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 240 and 249

[Release No. 34-70468; File No. S7-19-10]
RIN 3235-AK69

Extension of Temporary Registration of Municipal Advisors

AGENCY: Securities and Exchange Commission.

ACTION: Final rule; extension.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
amending interim final temporary Rule 15Ba2-6T, which provides for the 
temporary registration of municipal advisors under the Securities 
Exchange Act of 1934 (``Exchange Act''), as amended by the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act''), to 
extend the date on which Rule 15Ba2-6T (and consequently Form MA-T) 
will sunset from September 30, 2013, to December 31, 2014. Under the 
amendment, all temporary registrations submitted pursuant to Rule 
15Ba2-6T also will expire no later than December 31, 2014.

DATES: Effective Date: September 30, 2013. The expiration of the 
effective period of interim final temporary Rule 15Ba2-6T (17 CFR 
240.15Ba2-6T) and Form MA-T (17 CFR 249.1300T) is delayed from 
September 30, 2013, to December 31, 2014.

FOR FURTHER INFORMATION CONTACT: Office of Municipal Securities: John 
Cross, Director, at (202) 551-5839; Jessica Kane, Senior Special 
Counsel to the Director, at (202) 551-3235; Rebecca Olsen, Attorney 
Fellow, at (202) 551-5540; Mary Simpkins, Senior Special Counsel, at 
(202) 551-5683; at Office of Municipal Securities, Securities and 
Exchange Commission, 100 F Street NE., Washington, DC 20549-7010.
    Office of Market Supervision: Molly Kim, Senior Special Counsel, at 
(202) 551-5644; Yue Ding, Attorney-Adviser, at (202) 551-5842; at 
Division of Trading and Markets, Securities and Exchange Commission, 
100 F Street NE., Washington, DC 20549-7010.

SUPPLEMENTARY INFORMATION: The Commission is extending the expiration 
date for interim final temporary Rule 15Ba2-6T and Form MA-T under the 
Exchange Act.

I. Discussion

    Section 15B(a)(1) of the Exchange Act,\1\ as amended by Section 
975(a)(1)(B) of the Dodd-Frank Act,\2\ 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. Section 15B(a)(2) of the Exchange 
Act,\3\ 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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    \1\ 15 U.S.C. 78o-4(a)(1).
    \2\ Public Law 111-203, 124 Stat. 1376 (2010).
    \3\ 15 U.S.C. 78o-4(a)(2).
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    The registration requirement for municipal advisors became 
effective on October 1, 2010. On September 1, 2010, the Commission 
adopted interim final temporary Rule 15Ba2-6T under the Exchange 
Act,\4\ which permits municipal advisors to temporarily satisfy the 
statutory registration requirement by completing Form MA-T \5\ through 
the Commission's public Web site.\6\ Rule 15Ba2-6T serves as a 
transitional step to the implementation of a 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.
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    \4\ 17 CFR 240.15Ba2-6T.
    \5\ 17 CFR 249.1300T.
    \6\ See Securities Exchange Act Release No. 62824 (September 1, 
2010), 75 FR 54465 (September 8, 2010) (``Interim Release''). The 
Commission received seven comment letters on the Interim Release. 
See letters from Brad R. Jacobsen, dated September 7, 2010; John J. 
Wagner, Kutak Rock LLP, dated September 28, 2010; Joy A. Howard, 
Principal, WM Financial Strategies, dated October 5, 2010; Steve 
Apfelbacher, President, National Association of Independent Public 
Finance Advisors, dated October 8, 2010; Carolyn Walsh, Vice 
President and Senior Counsel, Center for Securities, Trust and 
Investments, American Bankers Association, Deputy General Counsel, 
ABA Securities Association, dated October 13, 2010; Amy Natterson 
Kroll and W. Hardy Callcott, Bingham McCutchen LLP, on behalf of the 
National Association of Energy Service Companies, dated October 13, 
2010; and Leslie M. Norwood, Managing Director and Associate General 
Counsel, Securities Industry and Financial Markets Association, 
dated November 15, 2010.
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    Under Rule 15Ba2-6T, as initially adopted, all temporary 
registrations submitted pursuant to that rule would have expired 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. Also, as 
initially adopted, Rule 15Ba2-6T itself would have expired on December 
31, 2011. On December 20, 2010, the Commission proposed for public 
comment rules for the permanent registration of municipal advisors.\7\ 
On December 21, 2011, the Commission amended Rule 15Ba2-6T to extend 
the date on which that rule and Form MA-T would sunset from December 
31, 2011, to September 30, 2012.\8\ On September 21, 2012, the 
Commission further amended Rule 15Ba2-6T to extend the date on which 
that rule and Form MA-T would sunset from September 30, 2012, to 
September 30, 2013.\9\ Accordingly, if the Commission does not take 
further action, all temporary registrations submitted pursuant to Rule 
15Ba2-6T will expire no later than September 30, 2013. Further, 
existing Rule 15Ba2-6T will expire on September 30, 2013.
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    \7\ See Securities Exchange Act Release No. 63576 (December 20, 
2010), 76 FR 824 (January 6, 2011) (``Proposing Release'').
    \8\ See Securities Exchange Act Release No. 66020 (December 21, 
2011), 76 FR 80733 (December 27, 2011) (``2011 Extension Release''). 
In the 2011 Extension Release, the Commission inadvertently omitted 
a reference to Subpart N and 17 CFR 249.1300T in the ``Statutory 
Authority and Text of Rule and Amendments'' section. As such, 
Subpart N, which consists of 17 CFR 249.1300T, was deleted from the 
Code of Federal Regulations. On July 12, 2012, the Commission 
adopted a technical amendment to restore Subpart N and 249.1300T to 
Title 17 of the Code of Federal Regulations. See Securities Exchange 
Act Release No. 66020A (July 12, 2012), 77 FR 42176 (July 18, 2012).
    \9\ See Securities Exchange Act Release No. 67901 (September 21, 
2012), 77 FR 59061 (September 26, 2012) (``2012 Extension Release'' 
and, together with the 2011 Extension Release, ``Extension 
Releases'').
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    The Commission is also adopting the rules for the permanent 
registration of municipal advisors in a separate release.\10\ As stated 
in the Adopting Release, rules and forms for the permanent registration 
of municipal advisors will become effective 60 days after publication 
of the final rules in the Federal Register.\11\ Moreover, to ensure an 
orderly transition from the temporary registration regime to the 
permanent registration regime and submission of applications through 
EDGAR, the Commission in the Adopting Release provided staggered 
compliance dates for municipal advisors to complete their applications 
for registration under the

[[Page 59815]]

permanent registration regime.\12\ These compliance dates are based on 
a municipal advisor's registration number under Rule 15Ba2-6T and Form 
MA-T (``temporary registration number'').\13\ The first filing period 
will begin on July 1, 2014, and the last filing period will end on 
October 31, 2014.\14\ A municipal advisor that enters into the 
municipal advisory business on or after October 1, 2014, and does not 
have a temporary registration number as of October 1, 2014, must file a 
complete application for registration under the permanent registration 
regime on or after October 1, 2014, and be registered with the 
Commission before engaging in municipal advisory activities.\15\ In 
contrast, new municipal advisors who engage in municipal advisory 
activities before October 1, 2014, must continue to submit applications 
for temporary registration until September 30, 2014.
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    \10\ See Securities Exchange Act Release No. 70462 (September 
20, 2013) (``Adopting Release'').
    \11\ See id., at Section V.
    \12\ See id.
    \13\ See id.
    \14\ See id. For purposes of this release, the ``applicable 
filing period'' is the appropriate filing period for a specific 
municipal advisor.
    \15\ See id.
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    As explained in the Adopting Release, for a municipal advisory firm 
registered under the temporary registration regime that files a 
complete application for permanent registration during the applicable 
filing period, its temporary municipal advisor registration will 
continue to be in effect until the Commission grants or denies the 
application for permanent registration, unless the temporary 
registration is rescinded by the Commission or withdrawn by the 
municipal advisory firm.\16\ For a municipal advisory firm registered 
under the temporary registration regime that does not timely file a 
complete application for permanent registration, the firm's temporary 
registration will expire forty-five days after the compliance date for 
permanent registration for the firm.\17\
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    \16\ See id.
    \17\ See id.
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    Because municipal advisors would need to rely on their temporary 
registrations until they are registered under the permanent 
registration regime, the Commission has determined that it is necessary 
and appropriate to extend the expiration date of Rule 15Ba2-6T and Form 
MA-T to December 31, 2014.\18\ The extension will provide an orderly 
method for municipal advisors to continue to temporarily satisfy the 
registration requirement under Section 15B of the Exchange Act until 
their permanent registrations are granted or denied by the Commission. 
The extension will also prevent a gap between the time at which the 
temporary rule, absent this extension, expires and at which municipal 
advisors must be registered with the Commission under the permanent 
registration regime.
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    \18\ The Commission notes that it is amending Rule 15Ba2-6T only 
to extend the expiration date of that rule and, consequently, the 
expiration date of Form MA-T in order to coordinate the expiration 
of the temporary registration regime with the compliance dates under 
the permanent registration regime.
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    Specifically, the Commission is amending Rule 15Ba2-6T(e) to 
provide that all temporary registrations submitted pursuant to Rule 
15Ba2-6T will expire on the earlier of: (1) The date that the municipal 
advisor's permanent registration, submitted pursuant to the Exchange 
Act and the rules thereunder, is approved or disapproved by the 
Commission; (2) the date on which the municipal advisor's temporary 
registration is rescinded by the Commission; (3) for a municipal 
advisor that has not applied for permanent registration with the 
Commission in accordance with the Exchange Act and the rules 
thereunder, forty-five days after the compliance date of such rules for 
the municipal advisor; or (4) on December 31, 2014. In addition, the 
Commission is amending Rule 15Ba2-6T(f) to provide that the interim 
final temporary rule will expire on December 31, 2014. Thus, absent 
further action by the Commission, Rule 15Ba2-6T and Form MA-T will 
expire on December 31, 2014, at 11:59 p.m. Eastern Time.
    The Commission is adding new subsection (3) to Rule 15Ba2-6T(e), as 
indicated above, to coordinate the expiration date of the temporary 
registrations in light of the staggered compliance dates under the 
permanent registration regime and to clarify that the December 31, 2014 
expiration date for Rule 15Ba2-6T is not meant to extend the date by 
which a municipal advisor must apply for registration under the 
permanent registration regime. Rule 15Ba2-6T(e)(3) also would help 
ensure an orderly transition from the temporary registration regime to 
the permanent registration regime.
    As previously noted in the Extension Releases, the Commission has 
considered the seven comment letters received on the Interim Release 
and, given the limited nature of this extension and the upcoming 
compliance dates for the permanent registration regime, the Commission 
is not making any other changes to Rule 15Ba2-6T and Form MA-T.\19\ 
Making other changes to the temporary registration regime is 
unnecessary in light of the Commission's adoption of the permanent 
registration regime. The Commission also notes that the comment letters 
received in response to the Interim Release were addressed in the 
Proposing Release and were considered for purposes of the proposed and 
final rules for the registration of municipal advisors.
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    \19\ See 2011 Extension Release, supra note 8, at 80734; and 
2012 Extension Release, supra note 9, at 59062-63.
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    The amendments to Rule 15Ba2-6T will be effective on September 30, 
2013. The Administrative Procedure Act (``APA'') generally requires an 
agency to publish notice of a proposed rulemaking in the Federal 
Register.\20\ This requirement does not apply, however, if the agency 
``for good cause finds (and incorporates the finding and a brief 
statement of reasons therefor in the rules issued) that notice and 
public procedure thereon are impracticable, unnecessary, or contrary to 
the public interest.'' \21\ The Commission notes that extending the 
expiration date of the temporary municipal advisor registration regime 
will not affect the substantive provisions of Rule 15Ba2-6T and Form 
MA-T. The amendments will merely allow municipal advisors who timely 
apply for permanent registration to continue to comply with the 
statutory registration requirement and thus continue to operate as 
municipal advisors until their permanent registration is granted or 
denied by the Commission. Extending the expiration date of Rule 15Ba2-
6T and Form MA-T also will prevent a regulatory gap from developing 
between the temporary and permanent registration regimes. The 
extension, consequently, is designed to be temporally limited in scope 
to accommodate the staggered compliance dates under the permanent 
registration regime. For these reasons, and the reasons discussed 
throughout this release, the Commission believes that there is good 
cause to extend the expiration date of Rule 15Ba2-6T and Form MA-T to 
December 31, 2014, and to find that notice and solicitation of comment 
on the extension is impracticable, unnecessary, or contrary to the 
public interest.\22\
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    \20\ See 5 U.S.C. 553(b).
    \21\ See 5 U.S.C. 553(b)(3)(B).
    \22\ This finding also satisfies the requirements of 5 U.S.C. 
808(2), allowing the rule amendments to become effective 
notwithstanding the requirements of 5 U.S.C. 801 (if a federal 
agency finds that 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''). Because the Commission is not publishing the rule 
amendments in a notice of proposed rulemaking, no analysis is 
required under the Regulatory Flexibility Act. See 5 U.S.C. 601(2) 
(for purposes of the Regulatory Flexibility Act, the term ``rule'' 
means any rule for which the agency publishes a general notice of 
proposed rulemaking).

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[[Page 59816]]

    The APA also generally requires that an agency publish a 
substantive rule in the Federal Register not less than 30 days before 
its effective date.\23\ However, this requirement does not apply if the 
agency finds good cause and publishes such cause with the rule.\24\ As 
noted above, the Commission is also adopting the rules for the 
permanent registration of municipal advisors in a separate release.\25\ 
This extension is being adopted to accommodate the staggered compliance 
dates for permanent registration established in the Adopting Release. 
For this reason, and the reasons discussed throughout this release, the 
Commission finds good cause not to delay the effective date of the 
extension.
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    \23\ See 5 U.S.C. 553(d).
    \24\ See 5 U.S.C. 553(d)(3).
    \25\ See supra note 10.
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    In connection with the adoption of Rule 15Ba2-6T and Form MA-T, the 
Commission submitted to the Office of Management and Budget (``OMB'') a 
request for approval of the ``collection of information'' requirements 
contained in the temporary rule and form in accordance with the 
Paperwork Reduction Act of 1995.\26\ OMB initially approved the 
collection of information on an emergency basis with an expiration date 
of March 31, 2011. The Commission subsequently submitted a request for 
extension of the approval, and OMB extended the approval to March 31, 
2014.\27\ The collection of information to which Rule 15Ba2-6T and Form 
MA-T relates is ``Rule 15Ba2-6T and Form MA-T--Temporary Registration 
of Municipal Advisors.'' The OMB control number for the collection of 
information is 3235-0659. Since the Commission is not amending Rule 
15Ba2-6T or the disclosure requirements contained in Form MA-T other 
than to extend the expiration date for Rule 15Ba2-6T and Form MA-T, 
this amendment will not change the ``collection of information'' 
previously approved by the OMB.\28\
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    \26\ 44 U.S.C. 3501 et seq.
    \27\ The Commission will submit a request for further extension 
of the OMB approval in light of this extension of the temporary 
registration regime.
    \28\ Consistent with the prior Extension Releases, the 
Commission recognizes that some new municipal advisors may register 
pursuant to Rule 15Ba2-6T during the extension period, and municipal 
advisors registered pursuant to Rule 15Ba2-6T may submit amendments 
and withdrawals during the extension period. See 2011 Extension 
Release, supra note 8, at 80735; and 2012 Extension Release, supra 
note 9, at 59063-64. Also, the Commission notes that the Adopting 
Release contains estimates of the reporting and recordkeeping 
burdens under the final municipal advisor registration rules and 
forms. See Adopting Release, supra note 10, at Section VII.
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    The Commission is sensitive to the costs and benefits of its rules. 
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.\29\ 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.\30\ Section 
23(a)(2) of the Exchange Act 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.\31\
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    \29\ See 15 U.S.C. 78c(f).
    \30\ See 15 U.S.C. 78w(a)(2).
    \31\ See 15 U.S.C. 78w(a)(2).
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    As discussed above, the amendments to Rule 15Ba2-6T extend the 
expiration date of that rule and Form MA-T to December 31, 2014. The 
temporary registration regime currently in effect serves as the 
economic baseline against which the costs and benefits, as well as the 
impact on efficiency, competition, and capital formation, of the 
amendments are measured. In the Interim Release, the Commission 
considered and discussed the costs and benefits of Rule 15Ba2-6T and 
Form MA-T.\32\ In the Interim Release, the Commission also considered 
the effects of Rule 15Ba2-6T and Form MA-T on efficiency, competition, 
and capital formation.\33\ In addition, in the Adopting Release, the 
Commission discussed the costs and benefits of the temporary 
registration regime and the current state of the municipal advisor 
market.\34\
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    \32\ See Interim Release, supra note 6, at 54474-75.
    \33\ See id., at 54475.
    \34\ See Adopting Release, supra note 10, at Section VIII.C.
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    Since the Commission is not amending Rule 15Ba2-6T and Form MA-T 
other than to extend their expiration date, the Commission believes the 
discussion of the temporary registration regime in the Adopting Release 
applies and the Commission does not expect additional significant costs 
or effects on efficiency, competition, or capital formation to result 
from the extension. The Commission also continues to believe that Rule 
15Ba2-6T and Form MA-T, as extended, will not result in a burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Exchange Act.
    The Commission, however, recognizes that allowing municipal 
advisors to continue to comply with the statutory registration 
requirement until a permanent registration regime becomes effective and 
preventing a regulatory gap from developing between the temporary and 
permanent registration regimes are important. The Commission also notes 
that not extending the expiration date of Rule 15Ba2-6T and Form MA-T 
could result in significant costs and burdens on efficiency, 
competition, and capital formation for municipal advisors who will be 
unable to comply with the statutory registration requirement.

II. Statutory Authority and Text of Rule and Amendments

    Pursuant to the Exchange Act, and particularly Section 15B (15 
U.S.C. 78o-4), the Commission is amending Sec.  240.15Ba2-6T and 
restating Sec.  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 and Amendments

    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 continues to read as 
follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 
78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4, 
78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78ll, 78mm, 80a-20, 
80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, 7201 et. seq., and 
8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 1350; and 
Pub. L. 111-203, 939A, 124 Stat. 1376, (2010), unless otherwise 
noted.
* * * * *

0
2. In Sec.  240.15Ba2-6T, paragraphs (e) and (f) are revised to read as 
follows:

Sec.  240.15Ba2-6T  Temporary registration as a municipal advisor; 
required amendments; and withdrawal from temporary registration.

* * * * *
    (e) All temporary registrations submitted pursuant to this section 
will expire on the earlier of:

[[Page 59817]]

    (1) The date that the municipal advisor's permanent registration, 
submitted pursuant to the Act and the rules thereunder, is approved or 
disapproved by the Commission;
    (2) The date on which the municipal advisor's temporary 
registration is rescinded by the Commission;
    (3) For a municipal advisor that has not applied for permanent 
registration with the Commission in accordance with the Act and the 
rules thereunder, forty-five days after the compliance date of such 
rules for the municipal advisor; or
    (4) On December 31, 2014.
    (f) This section will expire on December 31, 2014.
* * * * *

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 et seq.; 12 U.S.C. 
5461 et seq.; and 18 U.S.C. 1350, unless otherwise noted.
* * * * *

0
4. Subpart N, consisting of Sec.  249.1300T, continues to read as 
follows:

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-4).
    [Note: The text of Form MA-T does not, and the amendments will not, 
appear in the Code of Federal Regulations.]

     Dated: September 23, 2013.
    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-23519 Filed 9-27-13; 8:45 am]
BILLING CODE 8011-01-P