SEC may release 'muni adviser' definition by mid-year - SIFMA
Jan 16 (Reuters) - A financial industry group said on Wednesday it expects federal securities regulators to release long-awaited language about who qualifies as a municipal adviser in the first half of this year.
The U.S. Securities and Exchange Commission has said it will finalize a definition of municipal advisers by the first quarter of 2013, but it could take longer, said Kenneth Bentsen Jr., acting president and CEO of the Securities Industry and Financial Markets Association (SIFMA).
"These things have a way of slipping," Bentsen said at a media briefing on the finalization of the definition.
The new definition is in response to the 2010 Dodd Frank law that mandated tougher regulation of advisers to issuers in the $3.7 trillion U.S. municipal bond market to protect the interests of small towns, counties and states.
The SEC had proposed a temporary rule and was to have finalized a definition by Sept. 30. But it said on Sept. 21 that it was pushing its deadline back a year.
The definition is already years in the making - a proposal the SEC released in December 2010 on who qualified as an adviser spawned hundreds of comments and the commission ultimately pulled it. Implementation of other parts of the Dodd-Frank law have been delayed as regulators await a revision.
For years, municipal financial advisers, swap advisers, guaranteed investment contract brokers, placement agents and other consultants were largely unregulated. Critics said that helped set the stage for a wave of recent crises involving complex financial instruments that panned out badly for local taxpayers.
In September, Senate Majority Leader Harry Reid decided to push off a vote on a House-passed bill clarifying the definition of municipal advisers.
The clarification - long sought by municipalities, the firms that advise them on financing, and bond dealers - had been approved by the House of Representatives to ensure regulations do not ensnare too many people on the periphery of the $3.7 trillion municipal bond industry.
The measure, backed by SIFMA, was criticized by some as being too lenient and exempting too many people from regulation.
Lawmakers have not addressed the legislation so far in the current session of Congress.