From the Bond Buyer

 This is kind of one of those "pretend to beat them", whilst letting all the existing perp's squirm out, and dragging out the process long enough that no one can bring suit because "there is so much uncertainty.   Also -- important to enact new rules that can make it seem like the old hard and fast rules of fiduciary responsibility were somehow not applicable at the time

 

Muni Adviser Rule’s Scope at Issue

Questions Persist On Dealer-Advisers

Wednesday, February 16, 2011

By Joan Quigley

WASHINGTON — Just one day after the Municipal Securities Rulemaking Board issued a draft rule on muni advisers’ fiduciary duties, market participants are questioning the scope of the rule and whether it would apply to dealer-advisers.
At the Bond Buyer’s annual Texas Public Finance Conference in Austin, ... noted that the Securities and Exchange Commission may not clarify which individuals or firms are muni advisers and therefore subject to registration requirements until late this year.
“Bottom line, it takes a long time,” Maco said

Generally, a fiduciary duty means an adviser must put its clients’ interests ahead of its own and the draft rule and interpretative notice seek to shed light on what that means.

“I think most people understand, as a theoretical matter, and now as a legal matter, when you get tagged with a fiduciary duty, you’re supposed to put your client’s interests ahead of your own,” Leonard Weiser-Varon, a public-finance lawyer at Mintz Levin, said in an interview.
Others, however, are concerned the MSRB has not provided enough guidance in a second threshold area: what constitutes “advice” for purposes of Rule G-36 while they are conducting “municipal advisory activities.”
“What are the limits of what you can and can’t say?” asked William L. Hirata, a partner at Parker Poe. “Is it fair to attach a fiduciary duty when you haven’t defined what advice is?”

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