WASHINGTON, July 25 The U.S. Securities and
Exchange Commission will likely unveil and vote on a
long-awaited definition of municipal advisers soon, but the
timing depends on two new commissioners joining the federal
"That will be in the near term I think," Commissioner Dan
Gallagher, a Republican, said on Thursday about consideration of
the definition of who counts as a municipal adviser, a crucial
element to carrying out the Dodd-Frank financial reform law.
"But one of the things we have to deal with here, too, is we
are going to have two new commissioners come on," he added. "I
think they are pretty savvy folks ... but they will still need
some time to get up to speed."
Gallagher said he had not read documents detailing the
proposed definition. A source within the SEC also said the
definition has moved toward the top of the commission's agenda
since Chairman Mary Jo White was confirmed in April.
Dodd-Frank required oversight of those who advise the
cities, states and authorities selling municipal debt. More than
two years ago, the SEC pulled its initial definition of an
adviser after the $3.7 trillion municipal bond market
universally panned it for being too broad. The commission then
put in place a temporary rule on advisers that expires Sept. 30.
Regulators are concerned that a definition that is too
narrow could create loopholes that will make it hard to ensure
issuers', and the public's, interests are protected.
According to a market source who has tracked the adviser
definition, if the U.S. Congress confirms SEC nominees Michael
Piwowar and Kara Stein before its August recess, then the
commission will likely vote on the final definition in September
to give them time to become familiar with the rule. If the
nominees are not confirmed, then a vote could come sooner.
In March, the head of the SEC's municipal bond office, John
Cross, said it was close to finishing a new definition that took
into account the market's concerns.