House Subcommittee Approves Proposed Amendment to Muni Advisor Provisions of the Exchange Act

At yesterday's House Financial Services Subcommittee Markup, members approved H.R. 2827, introduced by Rep. Robert Dold (R-Ill.), by a vote of 20 to 10 with 1 present. The bill aims to clarify the definition of "municipal advisor" Additionally, the bill seeks to introduce exemptions to the municipal advisor definition.

The definition of "municipal advisor" is in Section 15B(e)(4) of the Exchange Act. The revised definition narrows the definition and makes the definition less ambiguous by requiring that such entity be "formally engaged, in writing and for compensation" by a municipal entity. The proposed amendments would also define certain closely related terms such as "investment strategies" (so as to provide, among other things, that the potential muni advisor knows that the advisor is providing assistance within the scope of the definition), and require that the MSRB provide greater specificity as to the obligations that are imposed upon a person acting as a municipal advisor.

The Subcommittee also approved H.R. 6161, introduced by Rep. Michael Fitzpatrick (R-Pa.), by a vote of 18 to 15. The bill will provide an exemption for low-revenue companies from certain SEC regulations, and intends to achieve this by revising the definition of "accelerated filer."

Click here for a webcast of the hearing.