WASHINGTON Jan 10 The securities industry is
seeking a one-month delay for a batch of new regulations
governing financial advisers to U.S. cities and states, telling
federal regulators firms have not had time to digest an official
definition of advisers spanning more than 700 pages.
That definition is expected to go into full effect next
week, allowing federal regulators to begin tightening oversight
of advisers who have long escaped government scrutiny. The
Securities and Exchange Commission approved it in September.
"It has been impossible to properly develop compliance
programs and train employees for the implementation of this new
rule," wrote the Securities Industry and Financial Markets
Association in a letter to the SEC late Thursday, requesting a
30-day delay as well as guidance on how the definition applies
"Municipal entities also appear to be unclear on critical
aspects of the workings of this new rule, and have expressed
concern to our members about engaging in transactions that may
be subject to, or signing documents related to, the rule until
after interpretive guidance is released."
The SEC declined to comment on the letter. The guidance is
expected to be released on Friday.
The Dodd-Frank Act signed in 2010 requires those who consult
with municipalities about selling debt or buying derivatives to
register with the Securities and Exchange Commission, putting
them under the same regulation as brokers and dealers, and also
to carry out fiduciary duties of putting clients' interests
The SEC laid out the parameters of exactly who would count
as an adviser nearly three years ago, but had to pull that
definition after it was universally criticized as too broad.
Now that the final definition is in place, the Municipal
Securities Rulemaking Board, a self-regulatory organization that
writes the rules the SEC enforces, is racing to create a regimen
on carrying out the Dodd-Frank provision.
More than 1,100 firms have registered as advisers since
2010, mostly under a temporary placeholder rule. The pace has
picked up since the final definition was approved - with 41
firms and individuals registering since Sept. 19.