WASHINGTON Feb 15 Bipartisan legislation
clarifying who counts as a U.S. municipal adviser was revived on
Friday in the House of Representatives, increasing pressure on
the U.S. Securities and Exchange Commission to release its
definition of advisers soon.
The Dodd-Frank law on Wall Street reform required new
oversight of those who advise the cities, states and authorities
selling municipal debt.
The SEC's proposed definition of who exactly counted as an
adviser was universally panned in the $3.7 trillion municipal
bond market as being too broad. The commission pulled the
proposal but, more than two years later, has still not released
a new version.
The legislation more narrowly defines municipal advisors.
"The original language that defines municipal advisors includes
people who are already regulated somewhere else, like volunteers
on boards, bank tellers, attorneys, accountants, and other
professionals," said Rep. Steve Stivers, a Republican from Ohio.
"Washington needs to fix the mistake that Washington made,
because it affects the rest of the country."
Stivers introduced the bill with Rep. Gwen Moore, a Democrat
from Wisconsin who co-sponsored similar legislation last year.
The House unanimously passed last year's bill, but the Senate
never took up corresponding legislation. That bill's co-sponsor,
Robert Dold, lost his seat in November's election.
Congress is not alone in turning up the pressure on the SEC,
with the Securities Industry and Financial Markets Association
pushing regulators and lawmakers to fashion a definition this
year to provide certainty to advisers. Advisers were supposed to
begin registering with the SEC, as brokers and dealers have done
for years, starting in 2010 under Dodd-Frank.
On Thursday, SEC Chairman Elisse Walter told a congressional
hearing that the definition remains a top priority for the
commission's office of municipal securities and the final
version will be narrower than the original proposal.