Series 52: 8.4.2.4.1. Exceptions And Exemptions

Taken from our Series 52 Online Guide

8.4.2.4.1. Exceptions and Exemptions

The rule carves out an exception for municipal finance professionals (MFPs) and non-MFP executive officers who live in a municipality and are entitled to vote for an official of the municipality. These individuals are allowed to contribute a de minimis amount, up to $250 per official per election. In contrast, MFPs who do not live in a municipality cannot give any amount if they or their firm wish to conduct municipal securities business with the municipality.

A municipal finance professional is any person who is primarily engaged in or supervises the activities of:

Underwriting, trading, or selling securities

Providing financial or investment advice or research

Any other activity that involves public communication with investors

Note that a non-MFP executive officer is an executive who does not supervise any municipal finance professionals. It should also be noted that representatives whose municipal securities activities are limited to retail sales to individual customers are not considered to be municipal finance professionals, and political contributions by these individuals will not trigger the ban.

Dealers prohibited from engaging in municipal securities business under this rule may qualify for an automatic exemption from the rule if three requirements are met. Automatic exemptions are only available where all of the following apply:

The dealer discovered the political contribution that prohibited the dealer from engaging in municipal securities business within four months from the date of the contribution.

The contribution did not exceed $250.

The person who made the contribution obtained a return of the contribution within 60 days of the discovery of the contribution by the dealer.

A dealer is only entitled to two automatic exemptions per 12-month period and may not execute more than one automatic exemption for the same municipal finance professional, regardless of

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