Following the passage of the Dodd-Frank Act, the SEC amended its Pay to Play Rule to allow advisers to pay third-party solicitors, but only where that third-party is a “regulated municipal adviser.” Thus, advisers seeking to solicit government clients with the help of a third-party solicitor may only engage a “regulated municipal adviser” who is subject to the pay to play rules of the Municipal Securities Rulemaking Board (MSRB). On December 20, 2010, the SEC proposed rules establishing a permanent registration regime for municipal advisers.
The proposed rule emphasizes the two requirements to become a municipal adviser. An adviser must (1) be registered under Section 15B of the Securities Exchange Act, and (2) subject to MSRB pay to play rules.
Based on the requirements, municipal advisers must register with both the SEC and MSRB. At the time of the release, the MSRB did not have pay to play rules in place for municipal advisers. However, in response the MSRB recently proposed Rule G-42, a pay to play rule for municipal advisers.
The bottom line for advisers who wish to pay a third party to solicit government clients is the solicitor must be a regulated municipal adviser.
To assist with registration, the SEC added links to its homepage under a section titled Municipal Adviser Registration. The first link directs advisers to an inventory of tools related to the municipal adviser registration form, Form MA-T, including instructions, glossary, print version and credentials for filing the form. The second link lists the temporary registration forms received from municipal advisers. The list is organized by date received, and includes the full name of the municipal adviser, registration number and state.