SIFMA Submits Comments In Response to MSRB Request for Input on Strategic Priorities
On October 23, SIFMA provided comments to the Municipal Securities Rulemaking Board (MSRB) in response to MSRB's request for input on its strategic priorities (Notice 2014-16) for the coming year.
Notice 2014-16 poses several questions in the context of the MSRB’s four key strategic goals: municipal advisor (MA) regulation, municipal entity protection, market efficiency and price transparency. SIFMA said its comments covers all four area and offers recommendations on MSRB governance issues that relate closely to the execution of initiatives under the strategic goals.
SIFMA also proposed the addition of a fifth strategic goal: reduce the cost of regulatory compliance.
MSRB to Create Supervision and Compliance Requirements for Municipal Advisors
On October 24, the MRSB received approval from the SEC to create the first new rule for municipal advisors since the SEC released its final registration rule for these professionals in September 2013. MSRB Rule G-44 establishes baseline supervisory and compliance obligations for municipal advisors.
The new supervision requirements will take effect on April 23, 2015, providing firms six months to implement the required policies and procedures. By April 23, 2016, the chief executive officers of municipal advisor firms must make the first of their annual certifications in writing that the municipal advisor has in place processes to establish, maintain, review, test and modify written compliance procedures and written supervisory procedures reasonably designed to achieve compliance with applicable rules.
SIFMA Submits Comments to the SEC on MSRB Proposed Rule G-44, Draft Amendments to Rules G-8 and G-9
MSRB Requests Comment on Extending Gifts Rule to Municipal Advisors
On October 23, the MSRB requested comment on a proposal to establish limitations on gifts given by municipal advisors in the professional capacity. The amendments to Rule G-20 are designed to extend the provisions of the rule to municipal advisors.
MSRB Rule G-20 currently establishes a $100 limit for gifts given by dealers to employees of entities engaged in municipal securities activities, subject to certain exceptions. The draft amendments would hold municipal advisor gift-giving to this same limit. Additionally, the MSRB is proposing to codify guidance on the application of the rule in particular situations that is currently in several MSRB and MSRB-referenced FINRA interpretive materials.
The draft amendments for municipal advisors also would explicitly prohibit dealers and municipal advisors from receiving reimbursement of certain entertainment expenses from the proceeds of an offering of municipal securities.
Comments are due no later than December 8, 2014. The MSRB will host a webinar on the proposed changes on Thursday, November 13, 2014 at 3 p.m. ET. Register for the webinar.
SIFMA Release Statement on Final Risk Retention Rule
SIFMA President and CEO Kenneth E. Bentsen, Jr. said the final credit risk retention rule announced by regulators on October 21 “will help clarify the regulatory 'rules of the road' for securitization,” and also “bring some relief to the regulatory uncertainty that has been a negative factor in the recovery of non-government guaranteed mortgage securitization.”
“We are pleased that the regulators finalized the adherence of the QRM definition to the CFPB's QM definition, which is a path SIFMA supported in its 2013 comments,” Bentsen said. “On the other hand, we are disappointed that the regulators did not appear to respond to the numerous commenter requests to tailor the risk retention rules for CLOs, and are concerned that the rules may have a negative impact on the ability of CLOs to fund credit creation. This is important because CLOs are a key source of funding for Main Street businesses and other corporate borrowers, and this funding could become more expensive and less available.”
"There are many other important aspects of the rule proposal that we will review with our members, given that those will apply to non-QRM loans and all other asset classes, such as credit cards, tender option bonds, and student loans," Bentsen said.
Overview of Risk Retention
SIFMA Risk Retention Comparison
SIFMA and TOB Programs Submit Comments to Multiple Federal Agencies on Credit Risk Retention
SIFMA and TOB Programs Submit Supplemental Comments to Multiple Federal Agencies on Credit Risk Retention
There’s No ‘One Size Fits All’ Financial Advisor | by SIFMA President and CEO Kenneth E. Bentsen, Jr.
SIFMA President and CEO Kenneth E. Bentsen, Jr., responds to a recent New York Times article that indicates some types of financial advisors can be trusted to offer cost-effective, suitable advice, while others are lacking. "Retail investors may, and do, choose among different models that provide investment services, including brokerage, money management and advice. It doesn't mean that one is better than another," Bentsen writes, noting that each model is subject to regulatory oversight. Continue reading at Pennsylvania + Wall and learn more about SIFMA's call for a uniform fiduciary standard for registered investment advisors and broker-dealers, when they provide the same type of service.