I 
112TH CONGRESS 
1ST SESSION H. R. 2827 
To amend the Securities Exchange Act of 1934 to clarify provisions relating 
to the regulation of municipal advisors, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 26, 2011 
Mr. DOLD introduced the following bill; which was referred to the Committee 
on Financial Services 
A BILL 
To amend the Securities Exchange Act of 1934 to clarify 
provisions relating to the regulation of municipal advi-
sors, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. DEFINITION OF MUNICIPAL ADVISOR. 
Section 15B(e)(4) of the Securities Exchange Act of 
1934 is amended to read as follows: 
‘‘(4) the term ‘municipal advisor’— 
‘‘(A) means a person (who is not a munic-
ipal entity or an employee of a municipal enti-
ty) that— 
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‘‘(i) is formally engaged, in writing 
and for compensation, by a municipal enti-
ty to provide advice to a municipal entity 
with respect to municipal financial prod-
ucts or the issuance of municipal securi-
ties, including advice with respect to the 
structure, timing, terms, and other similar 
matters concerning such financial products 
or issues; or 
‘‘(ii) undertakes a solicitation of a 
municipal entity for such purpose; 
‘‘(B) includes financial advisors, guaran-
teed investment contract brokers, third-party 
marketers, placement agents, solicitors, finders, 
and swap advisors, if such persons are de-
scribed in either of clauses (i) or (ii) of sub-
paragraph (A); and 
‘‘(C) does not include— 
‘‘(i) any broker, dealer, or municipal 
securities dealer (or person associated with 
such broker, dealer or municipal securities 
dealer); 
‘‘(ii) any investment adviser registered 
under the Investment Advisers Act of 1940 
or with a State or territory of the United 
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States (or person associated with such an 
investment adviser); 
‘‘(iii) any commodity trading advisor, 
swap dealer, major swap participant, fu-
tures commission merchant or introducing 
broker registered under the Commodity 
Exchange Act (or person associated with a 
commodity trading advisor, swap dealer, 
major swap participant, futures commis-
sion merchant or introducing broker) who 
is providing advice related to, engaging in, 
or arranging any swap; 
‘‘(iv) any security-based swap dealer 
or major security-based swap participant 
registered under the Securities Exchange 
Act of 1934 (or any person associated with 
a security-based swap dealer or major se-
curity-based swap participant) who is pro-
viding advice related to, engaging in, or ar-
ranging any security-based swap; 
‘‘(v) any attorney offering legal advice 
or providing services that are of a tradi-
tional legal nature; 
‘‘(vi) any engineer providing engineer-
ing advice; 
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‘‘(vii) any financial institution or per-
son associated with a financial institution; 
or 
‘‘(viii) any elected or appointed mem-
ber of a governing body of a municipal en-
tity, with respect to such member’s role on 
the governing body;’’. 
SEC. 2. DEFINITION OF INVESTMENT STRATEGIES. 
Section 15B(e)(3) of the Securities Exchange Act of 
1934 is amended to read as follows: 
‘‘(3) the term ‘investment strategies’— 
‘‘(A) means plans or programs for the in-
vestment of the proceeds of municipal securities 
(but not other public funds) that are not munic-
ipal derivatives or guaranteed investment con-
tracts, and the recommendation of and broker-
age of municipal escrow investments, where, 
with respect to the municipal advisor offering 
such plans, programs, or recommendations, 
such proceeds of municipal securities and mu-
nicipal escrow investments— 
‘‘(i) are known to the municipal advi-
sor to be comprised of funds or invest-
ments maintained in a segregated account 
that is exclusively for the purpose of main-
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taining such proceeds or escrow invest-
ment; or 
‘‘(ii) have been identified to the mu-
nicipal advisor, in writing, as funds or in-
vestments that constitute the proceeds of 
municipal securities or municipal escrow 
investments; and 
‘‘(B) does not include— 
‘‘(i) merely acting as a broker or prin-
cipal with respect to the purchase or sale 
of a security or other instrument; 
‘‘(ii) providing a list of, or price 
quotations for, investment options or secu-
rities or other instruments which may be 
available for purchase or investment or 
which satisfy investment criteria specified 
by a municipal entity; 
‘‘(iii) acting as a custodian; 
‘‘(iv) providing generalized informa-
tion concerning investments which are not 
tailored to the specific investment objec-
tives of the municipal entity; or 
‘‘(v) providing advice with respect to 
matters other than the investment of funds 
or financial products;’’. 
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SEC. 3. DEFINITION OF SOLICITATION OF A MUNICIPAL EN-
TITY. 
Section 15B(e)(9) of the Securities Exchange Act of 
1934 is amended by inserting before the semicolon the fol-
lowing ‘‘, but where communications on behalf of a fund 
or other collective investment vehicle shall not be deemed 
to be on behalf of any investment adviser that advises or 
manages such fund or investment vehicle’’. 
SEC. 4. ELIMINATION OF FEDERAL FIDUCIARY STANDARD 
FOR MUNICIPAL ADVISORS. 
Section 15B(c)(1) of the Securities Exchange Act of 
1934 is amended by striking the second sentence and in-
serting the following: 
‘‘No municipal advisor may engage in any act, prac-
tice, or course of business that is in contravention of 
any rule of the Board. In issuing regulations to 
carry out this paragraph, the Board shall— 
‘‘(A) limit the duties of municipal advisors 
in relation to municipal entities to those specific 
activities involving such municipal entity de-
scribed under the definition of municipal advi-
sor in subsection (e)(4); 
‘‘(B) specify when such duties begin and 
terminate in relation to such activities; and 
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‘‘(C) not prohibit principal transactions by 
municipal advisors.’’. 
Æ 
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