The Municipal Securities Rulemaking Board (MSRB) recently filed a rule change to adopt MSRB Rule A-11 (Rule). The new Rule calls for a $300 fee to be assessed annually against each municipal advisor professional who is registered with the Securities and Exchange Commission (SEC). Persons associated with the municipal advisors and who perform clerical, administrative, support, or other similar functions are not subject to the fee.

Each municipal advisor registered with the SEC (whether temporarily or permanently) on or before September 30, 2014, is required to pay a $300 "transitional" fee within 10 business days after the acceptance of the municipal advisor's permanent registration by the SEC. Although the Rule is effective immediately, payment of the fee is not required until the MSRB's 2015 fiscal year (which begins October 1, 2014), and municipal advisors are required to pay the annual fee by April 30 of that fiscal year.

The timing of the payment of this "transitional" fee and the first annual fee could therefore mean that a municipal advisor would make payments of two fees during the MSRB's 2015 fiscal year. Late payments will be subject to a monthly fee of $25, plus a late fee on the total overdue balance based upon the prime rate. The fee imposed under Rule A-11 is in addition to a one-time $100 initial fee per organization and a $500 annual fee per organization.

The rule change is in furtherance of the heightened regulations placed on municipal advisors since the SEC provided its final definition of "municipal advisor" in September 2013, discussed here.

Ballard Spahr's Municipal Securities Regulation and Enforcement Group advises clients on the latest securities issues in their public finance transactions, including in regulatory and enforcement matters of the SEC.

If you have questions about this or for more information, please contact Teri M. Guarnaccia at 410.528.5526 or guarnacciat@ballardspahr.com. 


Copyright © 2014 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.


Related Practices

Public Finance
Municipal Securities Regulation and Enforcement