Dodd-Frank Mandates Registering Municipal Advisors But Congressional Committee Says SEC's Proposed Rule Is Over The Top Hot

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The fear of the industry is that the rule would classify too many people—even local officials and bank tellers—as fiduciaries, subjecting them to fiduciary standards and increasing costs for local and state governments.
A new bill was introduced that more specifically classifies municipal advisors as those who formally give advice to governments on financing municipal projects. This exemption would also include brokers and municipal securities dealers. It would also prevent municipal advisors from being classified as fiduciaries.
The mandate for municipal advisors to register comes as the result of the current ability for practically anyone to label himself as an advisor, even if they are not qualified to be one or have fraudulent intent.
But the SEC’s proposed rule goes overboard and could even include municipal underwriters. Part of being an underwriter is being impartial to either side. If an underwriter had to become a fiduciary, loyalty to one side or the other would have to enter the picture.

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