New registration requirements for muni ‘placement agents’ set to kick in

As of Friday, so-called placement agents and others who solicit business from municipalities and public pension fund, have to register with the Securities and Exchange Commission as “municipal advisors.”
The new registration requirement, part of the Dodd-Frank legislation, also imposes a fiduciary duty on anyone who deals with state and local governmental entities or funds, and puts them under authority of the Municipal Securities Rulemaking Board.
Existing broker-dealers and investment advisers must register, as well as heretofore unregistered placement agents who solicit business from pension plans on behalf of money managers.
Some unethical practices among politically connected placement agents have raised questions about “pay to play.”
The SEC has established a temporary rule and process to handle the registrations. Municipal advisors file a new form, Form MA-T. There is no cost to file.
Filers must supply information about their disciplinary histories, along with other information, on the form.
On its website, the SEC warns new registrants to “allow ample time to establish an account” for registration purposes in order to complete the form by tomorrow.
The agency said a rush of registrants could create backlogs.
Lisa Roth, chief executive of Keystone Capital Corp., said her registration was processed within one day.
But she worries that many who should register haven’t heard about the new requirement.
“It was a much-overlooked component of Dodd-Frank,” Ms. Roth said.