2024 SEC Examination Priorities Report: Municipal Advisors
U.S. Securities and Exchange Commission (SEC) Division of Examinations (EXAMS or Division) issued its annual examination priorities, which, for the first time, was published at the start of the SEC’s fiscal year to “better inform investors and registrants of key risks, trends, and examination topics” the Division intends to focus on in the coming year.
As related to Municipal Advisors, the 2024 Examination Priorities include:
Examinations will continue to review whether municipal advisors have met their fiduciary duty obligation to clients, particularly when providing advice regarding the pricing, method of sale, and structure of municipal securities. Examiners will review whether municipal advisors are complying with their obligations to document municipal advisory relationships and disclose conflicts of interest and requirements related to registration, professional qualification, continuing education, recordkeeping, and supervision.
New MSRB Rule G-46, which becomes effective on March 1, 2024, is designed to establish the core standards of conduct for solicitor municipal advisors, which include disclosure of conflicts of interest and documentation of client relationships, among other things. Examinations of solicitor municipal advisors during the second half of fiscal year 2024 will focus on compliance with new MSRB Rule G-46.
New MSRB Rule G-46, which becomes effective on March 1, 2024, is designed to establish the core standards of conduct for solicitor municipal advisors, which include disclosure of conflicts of interest and documentation of client relationships, among other things.
