Dec. 6 (Bloomberg) -- The U.S. municipal-bond market regulator wants to bar financial advisers for state and local governments from making political contributions to clients, a step aimed at keep donations from being used to win business.
The Municipal Securities Rulemaking Board, which gained power over the previously unregulated advisers under this year’s Dodd-Frank financial-system overhaul, will propose rules covering donations that are similar to those for bond underwriters, said Michael Bartolotta, the board’s chairman. Since 1994, underwriters have been barred from contributing to the politicians with whom they work.
“Putting similar rules in place for the advisory community is one of our top priorities,” Bartolotta, who is also the vice chairman of Dallas-based First Southwest Co., told reporters on a conference call today.
The board is beginning to craft the regulations for firms that advise local officials when they raise money in the $2.8 trillion municipal-bond market, invest the proceeds or enter into derivative trades with Wall Street banks tied to the financing.
The Securities and Exchange Commission reviews and approves rules made by the board, which is an industry self-regulatory organization.
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