August 19, 2014 / 4:15 PM / 3 years ago

U.S. SEC launches municipal adviser exams

WASHINGTON, Aug 19 (Reuters) - The U.S. Securities and Exchange Commission said on Tuesday it is launching compliance exams for municipal advisers, a group of financial professionals that are new to the SEC’s regulatory regime.

In a letter sent to the heads of all registered municipal adviser organizations, the SEC said its experts will be examining certain firms for compliance with rules concerning registration, fiduciary duty, disclosure, fair dealing, supervision, books and records and certain training qualifications.

After the SEC completes its exams, its national examination program will report back to the agency about its observations about common practices in high-risk areas.

The SEC won new powers under the 2010 Dodd-Frank Wall Street reform law to police municipal advisers, who were not previously covered by regulation. The law requires advisers to register with the agency and also requires them to act in the best interest of clients such as cities and school districts who sell bonds.

The SEC’s new registration rules for municipal advisers took effect on July 1. The agency said that over the next two years, it will examine “a significant percentage” of the registered advisers. (Reporting by Sarah N. Lynch; Editing by Cynthia Osterman)

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