(a) Registration of municipal securities dealers.
(1) (A)
It shall be unlawful for any municipal securities dealer (other than
one registered as a broker or dealer under section 15 of this title)
to make use of the mails or any means or instrumentality of interstate commerce
to effect any transaction in, or to induce or attempt to induce the
purchase or sale of, any municipal security unless such municipal
securities dealer is registered in accordance with this subsection.
(B) It shall be unlawful
for a municipal advisor to provide advice to or on behalf of a municipal
entity or obligated person with respect to municipal financial products
or the issuance of municipal securities, or to undertake a solicitation
of a municipal entity or obligated person, unless the municipal advisor
is registered in accordance with this subsection.
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(2) A municipal securities
dealer or municipal advisor may be registered by filing with the Commission
an application for registration in such form and containing such information
and documents concerning such municipal securities dealer or municipal
advisor and any persons associated with such municipal securities
dealer as the Commission, by rule, may prescribe as necessary or appropriate
in the public interest or for the protection of investors. Within
forty-five days of the date of the filing of such application (or
within such longer period as to which the applicant consents), the
Commission shall—
(A) by order grant registration, or
(B) institute proceedings
to determine whether registration should be denied. Such proceedings
shall include notice of the grounds for denial under consideration
and opportunity for hearing and shall be concluded within one hundred
twenty days of the date of the filing of the application for registration.
At the conclusion of such proceedings the Commission, by order, shall
grant or deny such registration. The Commission may extend the time
for the conclusion of such proceedings for up to ninety days if it
finds good cause for such extension and publishes its reasons for
so finding or for such longer period as to which the applicant consents.
The Commission shall grant the registration of a municipal
securities dealer or municipal advisor if the Commission finds that
the requirements of this section are satisfied. The Commission shall
deny such registration if it does not make such a finding or if it
finds that if the applicant were so registered, its registration would
be subject to suspension or revocation under subsection (c) of this
section.
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(3) Any provision of this
title (other than section 5 or paragraph (1) of this subsection) which
prohibits any act, practice, or course of business if the mails or
any means or instrumentality of interstate commerce is used in connection
therewith shall also prohibit any such act, practice, or course of
business by any registered municipal securities dealer or municipal
advisor or any person acting on behalf of such municipal securities
dealer or municipal advisor, irrespective of any use of the mails
or any means or instrumentality of interstate commerce in connection
therewith.
(4) The
Commission, by rule or order, upon its own motion or upon application,
may conditionally or unconditionally exempt any broker, dealer, municipal
securities dealer, or municipal advisor, or class of brokers, dealers,
municipal securities dealers, or municipal advisors from any provision
of this section or the rules or regulations thereunder, if the Commission
finds that such exemption is consistent with the public interest,
the protection of investors, and the purposes of this section.
(5) No municipal advisor
shall make use of the mails or any means or instrumentality of interstate
commerce to provide advice to or on behalf of a municipal entity or
obligated person with respect to municipal financial products, the
issuance of municipal securities, or to undertake a solicitation of
a municipal entity or obligated person, in connection with which such
municipal advisor engages in any fraudulent, deceptive, or manipulative
act or practice.
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(b) Municipal Securities Rulemaking Board; rules
and regulations.
(1) The Municipal Securities Rulemaking
Board shall be composed of 15 members, or such other number of members
as specified by rules of the Board pursuant to paragraph (2)(B), which
shall perform the duties set forth in this section. The members of
the Board shall serve as members for a term of 3 years or for such
other terms as specified by rules of the Board pursuant to paragraph
(2)(B), and shall consist of (A) 8 individuals who are independent
of any municipal securities broker, municipal securities dealer, or
municipal advisor, at least 1 of whom shall be representative of institutional
or retail investors in municipal securities, at least 1 of whom shall
be representative of municipal entities, and at least 1 of whom shall
be a member of the public with knowledge of or experience in the municipal
industry (which members are hereinafter referred to as “public
representatives”); and (B) 7 individuals who are associated
with a broker, dealer, municipal securities dealer, or municipal advisor,
including at least 1 individual who is associated with and representative
of brokers, dealers, or municipal securities dealers that are not
banks or subsidiaries or departments or divisions of banks (which
members are hereinafter referred to as “broker-dealer representatives”),
at least 1 individual who is associated with and representative of
municipal securities dealers which are banks or subsidiaries or departments
or divisions of banks (which members are hereinafter referred to as
“bank representatives”), and at least 1 individual who
is associated with a municipal advisor (which members are hereinafter
referred to as “advisor representatives” and, together
with the broker-dealer representatives and the bank representatives,
are referred to as “regulated representatives”). Each
member of the board shall be knowledgeable of matters related to the
municipal securities markets. Prior to the expiration of the terms
of office of the members of the Board, an election shall be held under
rules adopted by the Board (pursuant to subsection (b)(2)(B) of this
section) of the members to succeed such members.
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(2) The Board shall propose and adopt rules
to effect the purposes of this title with respect to transactions
in municipal securities effected by brokers, dealers, and municipal
securities dealers and advice provided to or on behalf of municipal
entities or obligated persons by brokers, dealers, municipal securities
dealers, and municipal advisors with respect to municipal financial
products, the issuance of municipal securities, and solicitations
of municipal entities or obligated persons undertaken by brokers,
dealers, municipal securities dealers, and municipal advisors. The
rules of the Board, as a minimum, shall:
(A) provide that no
municipal securities broker or municipal securities dealer shall effect
any transaction in, or induce or attempt to induce the purchase or
sale of, any municipal security, and no broker, dealer, municipal
securities dealer, or municipal advisor shall provide advice to or
on behalf of a municipal entity or obligated person with respect to
municipal financial products or the issuance of municipal securities,
unless such municipal securities broker or municipal securities dealer
meets such standards of operational capability and such municipal
securities broker or municipal securities dealer and every natural
person associated with such municipal securities broker or municipal
securities dealer meet such standards of training, experience, competence,
and such other qualifications as the Board finds necessary or appropriate
in the public interest or for the protection of investors and municipal
entities or obligated persons. In connection with the definition and
application of such standards the Board may—
(i) appropriately
classify municipal securities brokers, municipal securities dealers,
and municipal advisors (taking into account relevant matters, including
types of business done, nature of securities other than municipal
securities sold, and character of business organization), and persons
associated with municipal securities brokers, municipal securities
dealers, and municipal advisors;
(ii) specify that all or any portion of such
standards shall be applicable to any such class; and
(iii) require persons in any such class to
pass tests administered in accordance with subsection (c)(7) of this
section.
(B) establish fair procedures for the
nomination and election of members of the Board and assure fair representation
in such nominations and elections of public representatives, broker
dealer representatives, bank representatives, and advisor representatives.
Such rules—
(i) shall provide that the number of public
representatives of the Board shall at all times exceed the total number
of regulated representatives and that the membership shall at all
times be as evenly divided in number as possible between public representatives
and regulated representatives;
(ii) shall specify the length or lengths of
terms members shall serve;
(iii) may increase the number of members which shall constitute the
whole Board, provided that such number is an odd number; and
(iv) shall establish requirements
regarding the independence of public representatives.
(C) be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in municipal
securities and municipal financial products, to remove impediments
to and perfect the mechanism of a free and open market in municipal
securities and municipal financial products, and, in general, to protect
investors, municipal entities, obligated persons, and the public interest;
and not be designed to permit unfair discrimination among customers,
municipal entities, obligated persons, municipal securities brokers,
municipal securities dealers, or municipal advisors, to fix minimum
profits, to impose any schedule or fix rates of commissions, allowances,
discounts, or other fees to be charged by municipal securities brokers,
municipal securities dealers, or municipal advisors, to regulate by
virtue of any authority conferred by this title matters not related
to the purposes of this title or the administration of the Board,
or to impose any burden on competition not necessary or appropriate
in furtherance of the purposes of this title.
(D) if the Board deems appropriate,
provide for the arbitration of claims, disputes, and controversies
relating to transactions in municipal securities and advice concerning
municipal financial products: Provided, however, that no person
other than a municipal securities broker, municipal securities dealer,
municipal advisor, or person associated with such a municipal securities
broker, municipal securities dealer, or municipal advisor may be compelled
to submit to such arbitration except at his instance and in accordance
with section 29 of this title.
(E) provide for the periodic examination
in accordance with subsection (c)(7) of this section of municipal
securities brokers, municipal securities dealers, and municipal advisors
to determine compliance with applicable provisions of this title,
the rules and regulations thereunder, and the rules of the Board.
Such rules shall specify the minimum scope and frequency of such examinations
and shall be designed to avoid unnecessary regulatory duplication
or undue regulatory burdens for any such municipal securities broker,
municipal securities dealer, or municipal advisor.
(F) include provisions governing the
form and content of quotations relating to municipal securities which
may be distributed or published by any municipal securities broker,
municipal securities dealer, or person associated with such a municipal
securities broker or municipal securities dealer, and the persons to whom such
quotations may be supplied. Such rules relating to quotations shall
be designed to produce fair and informative quotations, to prevent
fictitious or misleading quotations, and to promote orderly procedures
for collecting, distributing, and publishing quotations.
(G) prescribe records to
be made and kept by municipal securities brokers, municipal securities
dealers, and municipal advisors and the periods for which such records
shall be preserved.
(H) define the term “separately identifiable department or
division”, as that term is used in section 3(a)(30) of this
title, in accordance with specified and appropriate standards to assure
that a bank is not deemed to be engaged in the business of buying
and selling municipal securities through a separately identifiable
department or division unless such department or division is organized
and administered so as to permit independent examination and enforcement
of applicable provisions of this title, the rules and regulations
thereunder, and the rules of the Board. A separately identifiable
department or division of a bank may be engaged in activities other
than those relating to municipal securities.
(I) provide for the operation and administration
of the Board, including the selection of a Chairman from among the
members of the Board, the compensation of the members of the Board,
and the appointment and compensation of such employees, attorneys,
and consultants as may be necessary or appropriate to carry out the
Board’s functions under this section.
(J) provide that each municipal securities
broker, municipal securities dealer, and municipal advisor shall pay
to the Board such reasonable fees and charges as may be necessary
or appropriate to defray the costs and expenses of operating and administering
the Board. Such rules shall specify the amount of such fees and charges,
which may include charges for failure to submit to the Board, or to
any information system operated by the Board, within the prescribed
timeframes, any items of information or documents required to be submitted
under any rule issued by the Board.
(K) establish the terms and conditions
under which any broker, dealer, or municipal securities dealer may
sell, or prohibit any broker, dealer, or municipal securities dealer
from selling, any part of a new issue of municipal securities to a
related account of a broker, dealer, or municipal securities dealer
during the underwriting period.
(L) with respect to municipal advisors—
(i) prescribe means reasonably designed to prevent acts, practices,
and courses of business as are not consistent with a municipal advisor’s
fiduciary duty to its clients;
(ii) provide continuing education requirements
for municipal advisors;
(iii) provide professional standards; and
(iv) not impose a regulatory burden on small
municipal advisors that is not necessary or appropriate in the public
interest and for the protection of investors, municipal entities,
and obligated persons, provided that there is robust protection of
investors against fraud.
(3) The Board, in conjunction with or on
behalf of any Federal financial regulator or self-regulatory organization,
may—
(A) establish information systems; and
(B) assess such reasonable
fees and charges for the submission of information to, or the receipt
of information from, such systems from any persons which systems may
be developed for the purposes of serving as a repository of information
from municipal market participants or otherwise in furtherance of
the purposes of the Board, a Federal financial regulator, or a self-regulatory
organization, except that the Board—
(i) may not charge
a fee to municipal entities or obligated persons to submit documents
or other information to the Board or charge a fee to any person to obtain, directly
from the Internet site of the Board, documents or information submitted
by municipal entities, obligated persons, brokers, dealers, municipal
securities dealers, or municipal advisors, including documents submitted
under the rules of the Board or the Commission; and
(ii) shall not be prohibited from charging
commercially reasonable fees for automated subscription-based feeds
or similar services, or for charging for other data or document-based
services customized upon request of any person, made available to
commercial enterprises, municipal securities market professionals,
or the general public, whether delivered through the Internet or any
other means, that contain all or part of the documents or information,
subject to approval of the fees by the Commission under section 19(b).
(4) The Board may provide guidance and assistance in the enforcement
of, and examination for, compliance with the rules of the Board to
the Commission, a registered securities association under section
15A, or any other appropriate regulatory agency, as applicable.
(5) The Board, the Commission,
and a registered securities association under section 15A, or the
designees of the Board, the Commission, or such association, shall
meet not less frequently than 2 times a year—
(A) to describe
the work of the Board, the Commission, and the registered securities
association involving the regulation of municipal securities; and
(B) to share information
about—
(i) the interpretation of the Board, the Commission,
and the registered securities association of Board rules; and
(ii) examination and enforcement
of compliance with Board rules.
(7)
* Nothing in this section shall be
construed to impair or limit the power of the Commission under this
title.
(8) (A) The Commission shall
adopt data standards for information submitted to the Board.
(B) Any data standards
adopted under subparagraph (A) shall incorporate, and ensure compatibility
with (to the extent feasible), all applicable data standards established
in the rules promulgated under section 124 of the Financial Stability
Act of 2010, including, to the extent practicable, by having the characteristics
described in clauses (i) through (vi) of subsection (c)(1)(B) of such
section 124.
(C)
The Commission shall consult market participants in establishing data
standards under subparagraph (A).
(D) Nothing in this paragraph may be
construed to affect the operation of paragraph (1) or (2) of subsection
(d).
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(c) Discipline of municipal securities dealers;
censure; suspension or revocation of registration; other sanctions;
investigations.
(1) No broker, dealer, or municipal securities
dealer shall make use of the mails or any means or instrumentality
of interstate commerce to effect any transaction in, or to induce
or attempt to induce the purchase or sale of, any municipal security,
and no broker, dealer, municipal securities dealer, or municipal advisor
shall make use of the mails or any means or instrumentality of interstate
commerce to provide advice to or on behalf of a municipal entity or
obligated person with respect to municipal financial products, the
issuance of municipal securities, or to undertake a solicitation of
a municipal entity or obligated person, in contravention of any rule
of the Board. A municipal advisor and any person associated with such
municipal advisor shall be deemed to have a fiduciary duty to any
municipal entity for whom such municipal advisor acts as a municipal
advisor, and no municipal advisor may engage in any act, practice,
or course of business which is not consistent with a municipal advisor’s
fiduciary duty or that is in contravention of any rule of the Board.
(2) The Commission, by
order, shall censure, place limitations on the activities, functions,
or operations, suspend for a period not exceeding twelve months, or
revoke the registration of any municipal securities dealer or municipal
advisor, if it finds, on the record after notice and opportunity for
hearing, that such censure, placing of limitations, denial, suspension,
or revocation, is in the public interest and that such municipal securities
dealer or municipal advisor has committed or omitted any act, or is
subject to an order or finding, enumerated in subparagraph (A), (D),
(E), (H), or (G) of paragraph (4) of section 15(b) of this title,
has been convicted of any offense specified in subparagraph (B) of
such paragraph (4) within ten years of the commencement of the proceedings
under this paragraph, or is enjoined from any action, conduct, or practice
specified in subparagraph (C) of such paragraph (4).
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(3) Pending final determination whether
any registration under this section shall be revoked, the Commission,
by order, may suspend such registration, if such suspension appears
to the Commission, after notice and opportunity for hearing, to be
necessary or appropriate in the public interest or for the protection
of investors or municipal entities or obligated person. Any registered
municipal securities dealer or municipal advisor may, upon such terms
and conditions as the Commission may deem necessary in the public
interest or for the protection of investors or municipal entities
or obligated person withdraw from registration by filing a written
notice of withdrawal with the Commission. If the Commission finds
that any registered municipal securities dealer or municipal advisor
is no longer in existence or has ceased to do business as a municipal
securities dealer or municipal advisor, the Commission, by order,
shall cancel the registration of such municipal securities dealer.
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(4) The Commission, by order,
shall censure or place limitations on the activities or functions
of any person associated, seeking to become associated, or, at the
time of the alleged misconduct, associated or seeking to become associated
with a municipal securities dealer, or suspend for a period not exceeding
12 months or bar any such person from being associated with a broker,
dealer, investment adviser, municipal securities dealer, municipal
advisor, transfer agent, or nationally recognized statistical rating
organization, if the Commission finds, on the record after notice
and opportunity for hearing, that such censure, placing of limitations,
suspension, or bar is in the public interest and that such person
has committed any act, or is subject to an order or finding, enumerated
in subparagraph (A), (D), (E), (H), or (G) of paragraph (4) of section
15(b) of this title, has been convicted of any offense specified in
subparagraph (B) of such paragraph (4) within ten years of the commencement
of the proceedings under this paragraph, or is enjoined from any action,
conduct, or practice specified in subparagraph (C) of such paragraph
(4). It shall be unlawful for any person as to whom an order entered
pursuant to this paragraph or paragraph (5) of this subsection suspending
or barring him from being associated with a municipal securities dealer
is in effect willfully to become, or to be, associated with a municipal
securities dealer without the consent of the Commission, and it shall
be unlawful for any municipal securities dealer to permit such a person
to become, or remain, a person associated with him without the consent
of the Commission, if such municipal securities dealer knew, or, in
the exercise of reasonable care should have known, of such order.
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(5) With respect to any municipal
securities dealer for which the Commission is not the appropriate
regulatory agency, the appropriate regulatory agency, for such municipal
securities dealer may sanction any such municipal securities dealer
in the manner and for the reasons specified in paragraph (2) of this
subsection and any person associated with such municipal securities
dealer in the manner and for the reasons specified in paragraph (4)
of this subsection. In addition, such appropriate regulatory agency
may, in accordance with section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818), enforce compliance by such municipal securities
dealer or any person associated with such municipal securities dealer
with the provisions of this section, section 17 of this title, the
rules of the Board, and the rules of the Commission pertaining to
municipal securities dealers, persons associated with municipal securities
dealers, and transactions in municipal securities. For purposes of
the preceding sentence, any violation of any such provision shall
constitute adequate basis for the issuance of any order under
section 8(b) or 8(c) of the Federal Deposit Insurance Act, and the
customers of any such municipal securities dealer shall be deemed
to be “depositors” as that term is used in section 8(c)
of that Act. Nothing in this paragraph shall be construed to affect
in any way the powers of such appropriate regulatory agency to proceed
against such municipal securities dealer under any other provision
of law.
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(6) (A) The Commission,
prior to the entry of an order of investigation, or commencement of
any proceedings, against any municipal securities dealer, or person
associated with any municipal securities dealer, for which the Commission
is not the appropriate regulatory agency, for violation of any provision
of this section, section 15(c)(1) or 15(c)(2) of this title, any rule
or regulation under any such section, or any rule of the Board, shall
(i) give notice to the appropriate regulatory agency for such municipal
securities dealer of the identity of such municipal securities dealer
or person associated with such municipal securities dealer, the nature
of and basis for such proposed action, and whether the Commission
is seeking a monetary penalty against such municipal securities dealer
or such associated person pursuant to section 21B of this title; and
(ii) consult with such appropriate regulatory agency concerning the
effect of such proposed action on sound banking practices and the
feasibility and desirability of coordinating such action with any
proceeding or proposed proceeding by such appropriate regulatory agency
against such municipal securities dealer or associated person.
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(B) The appropriate regulatory
agency for a municipal securities dealer (if other than the Commission),
prior to the entry of an order of investigation, or commencement of
any proceedings, against such municipal securities dealer or person
associated with such municipal securities dealer, for violation of
any provision of this section, the rules of the Board, or the rules
or regulations of the Commission pertaining to municipal securities
dealers, persons associated with municipal securities dealers, or
transactions in municipal securities dealers, or transactions in municipal
securities shall (i) give notice to the Commission of the identity
of such municipal securities dealer or person associated with such
municipal securities dealer and the nature of and basis for such proposed
action and (ii) consult with the Commission concerning the effect
of such proposed action on the protection of investors or municipal
entities or obligated person and the feasibility and desirability
of coordinating such action with any proceeding or proposed proceeding
by the Commission against such municipal securities dealer or associated
person.
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(C) Nothing in this
paragraph shall be construed to impair or limit (other than by the
requirement of prior consultation) the power of the Commission or
the appropriate regulatory agency for a municipal securities dealer
to initiate any action of a class described in this paragraph or to
affect in any way the power of the Commission or such appropriate
regulatory agency to initiate any other action pursuant to this title
or any other provision of law.
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(7) (A) Tests
required pursuant to subsection (b)(2)(A)(iii) of this section shall
be administered by or on behalf of and periodic examinations pursuant
to subsection (b)(2)(E) of this section shall be conducted by—
(i) a registered securities association, in the case of municipal
securities brokers and municipal securities dealers who are members
of such association;
(ii)
the appropriate regulatory agency for any municipal securities broker
or municipal securities dealer, in the case of all other municipal
securities brokers and municipal securities dealers; and
(iii) the Commission, or its designee,
in the case of municipal advisors.
(B) A registered securities association
shall make a report of any examination conducted pursuant to subsection
(b)(2)(E) of this section and promptly furnish the Commission a copy
thereof and any data supplied to it in connection with such examination.
Subject to such limitations as the Commission, by rule, determines
to be necessary or appropriate in the public interest or for the protection
of investors or municipal entities or obligated person, the Commission
shall, on request, make available to the Board a copy of any report
of an examination of a municipal securities broker or municipal securities
dealer made by or furnished to the Commission pursuant to this paragraph
or section 17(c)(3) of this title.
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(8) The Commission is authorized, by order,
if in its opinion such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise, in furtherance
of the purposes of this title, to remove from office or censure any
person who is, or at the time of the alleged violation or abuse was,
a member or employee of the Board, who, the Commission finds, on the
record after notice and opportunity for hearing, has willfully (A)
violated any provision of this title, the rules and regulations thereunder,
or the rules of the Board or (B) abused his authority.
(9) (A)
Fines collected by the Commission for violations of the rules of the
Board shall be equally divided between the Commission and the Board.
(B) Fines collected
by a registered securities association under section 15A(7) with respect
to violations of the rules of the Board shall be accounted for by
such registered securities association separately from other fines
collected under section 15A(7) and shall be allocated between such
registered securities association and the Board, and such allocation
shall require the registered securities association to pay to the
Board ⅓ of all fines collected by the registered securities
association reasonably allocable to violations of the rules of the
Board, or such other portion of such fines as may be directed by the
Commission upon agreement between the registered securities association
and the Board.
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(d) Issuance of municipal securities.
(1) Neither the Commission nor the Board
is authorized under this title, by rule or regulation, to require
any issuer of municipal securities, directly or indirectly through
a purchaser or prospective purchaser of securities from the issuer,
to file with the Commission or the Board prior to the sale of such
securities by the issuer any application, report, or document in connection
with the issuance, sale, or distribution of such securities.
(2) The Board is not authorized
under this title to require any issuer of municipal securities, directly
or indirectly through a municipal securities broker, municipal securities
dealer, municipal advisor, or otherwise, to furnish to the Board or
to a purchaser or a prospective purchaser of such securities any application,
report, document, or information with respect to such issuer: Provided,
however, that the Board may require municipal securities brokers
and municipal securities dealers or municipal advisors to furnish
to the Board or purchasers or prospective purchasers of municipal
securities applications, reports, documents, and information with
respect to the issuer thereof which is generally available from a
source other than such issuer. Nothing in this paragraph shall be
construed to impair or limit the power of the Commission under any
provision of this title.
(e) Definitions. For purposes of this section—
(1) the term “Board”
means the Municipal Securities Rulemaking Board established under
subsection (b)(1);
(2) the term “guaranteed investment contract” includes
any investment that has specified withdrawal or reinvestment provisions and a specifically
negotiated or bid interest rate, and also includes any agreement to
supply investments on 2 or more future dates, such as a forward supply
contract;
(3) the term
“investment strategies” includes plans or programs for
the investment of the proceeds of municipal securities that are not
municipal derivatives, guaranteed investment contracts, and the recommendation
of and brokerage of municipal escrow investments;
(4) the term “municipal advisor”—
(A) means a person (who is not a municipal entity or an employee
of a municipal entity) that—
(i) provides advice to or on
behalf of a municipal entity or obligated person with respect to municipal
financial products or the issuance of municipal securities, including
advice with respect to the structure, timing, terms, and other similar
matters concerning such financial products or issues; or
(ii) undertakes a solicitation
of a municipal entity;
(B) includes financial advisors, guaranteed
investment contract brokers, third-party marketers, placement agents,
solicitors, finders, and swap advisors, if such persons are described
in any of clauses (i) through (iii) of subparagraph (A); and
(C) does not include a
broker, dealer, or municipal securities dealer serving as an underwriter
(as defined in section 2(a)(11) of the Securities Act of 1933) (15
U.S.C. 77b(a)(11)), any investment adviser registered under the Investment
Advisers Act of 1940, or persons associated with such investment advisers
who are providing investment advice, any commodity trading advisor
registered under the Commodity Exchange Act or persons associated
with a commodity trading advisor who are providing advice related
to swaps, attorneys offering legal advice or providing services that
are of a traditional legal nature, or engineers providing engineering
advice;
(5) the term “municipal financial product” means municipal
derivatives, guaranteed investment contracts, and investment strategies;
(6) the term “rules
of the Board” means the rules proposed and adopted by the Board
under subsection (b)(2);
(7) the term “person associated with a municipal advisor”
or “associated person of an advisor” means—
(A) any partner,
officer, director, or branch manager of such municipal advisor (or
any person occupying a similar status or performing similar functions);
(B) any other employee
of such municipal advisor who is engaged in the management, direction,
supervision, or performance of any activities relating to the provision
of advice to or on behalf of a municipal entity or obligated person
with respect to municipal financial products or the issuance of municipal
securities; and
(C) any person directly or indirectly controlling, controlled by,
or under common control with such municipal advisor;
(8) the term “municipal
entity” means any State, political subdivision of a State, or
municipal corporate instrumentality of a State, including—
(A) any agency, authority, or instrumentality of the State, political
subdivision, or municipal corporate instrumentality;
(B) any plan, program, or pool of assets
sponsored or established by the State, political subdivision, or municipal
corporate instrumentality or any agency, authority, or instrumentality
thereof; and
(C)
any other issuer of municipal securities;
(9) the term “solicitation
of a municipal entity or obligated person” means a direct or
indirect communication with a municipal entity or obligated person
made by a person, for direct or indirect compensation, on behalf of
a broker, dealer, municipal securities dealer, municipal advisor,
or investment adviser (as defined in section 202 of the Investment
Advisers Act of 1940) that does not control, is not controlled by,
or is not under common control with the person undertaking such solicitation
for the purpose of obtaining or retaining an engagement by a municipal
entity or obligated person of a broker, dealer, municipal securities
dealer, or municipal advisor for or in connection with municipal financial
products, the issuance of municipal securities, or of an investment
adviser to provide investment advisory services to or on behalf of
a municipal entity; and
(10) the term “obligated person” means any person, including
an issuer of municipal securities, who is either generally or through
an enterprise, fund, or account of such person, committed by contract
or other arrangement to support the payment of all or part of the
obligations on the municipal securities to be sold in an offering
of municipal securities.
[15 USC 78o-4. As added
by act of June 4, 1975 (89 Stat. 131) and amended by acts of June
6, 1983 (97 Stat. 207); Dec. 4, 1987 (101 Stat. 1256, 1257); Oct.
15, 1990 (104 Stat. 941); Nov. 15, 1990 (104 Stat. 2718); July 30,
2002 (116 Stat. 796); July 21, 2010 (124 Stat. 1850, 1853, 1906, 1916-1923);
and Dec. 23, 2022 (136 Stat. 3427).]
