Effective January 13, 2014, the SEC will put into place permanent rules to require the ongoing registration of municipal advisers. A municipal adviser is defined as a person that either:
– gives advice to a municipal entity or obligated person regarding municipal securities, or
– solicits a municipal entity.
Municipal entities and their employees are not considered municipal advisers.
An “obligated person” essentially refers to an entity that is obligated to repay some or all of the amount borrowed in a municipal securities offering. For example, a non-profit university or non-profit hospital could be an obligated person if they borrow from the proceeds a municipal securities offering and are then legally required to pay back what they borrowed.
Note that certain entities are exempt from the registration requirement if they provide advice while acting in their regular capacity. This exemption applies to underwriters, registered investment advisers, registered commodity trading advisors, attorneys, engineers, banks, accountants, and swap dealers. For more details, see the SEC release.
Source: SEC Press Release 2013-185: SEC Approves Registration Rules for Municipal Advisors
This alert applies to the Series 7 and Series 52.