Wall Street Reform and Consumer Protection Act of 2010

In the wake of the subprime mortgage crisis and global financial meltdown of 2008-2009, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The Dodd-Frank Act enacted sweeping changes in the regulation of financial institutions, Financial Advisors, and the financial markets.

Official Title

To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes. (H.R. 4173)

Short Title

“Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010”

Municipal Advisor Rule

The Dodd-Frank Act created new standards, definitions, registration requirements and rules for “Municipal Advisors.” Two major results of the Dodd-Frank Act for Municipal Advisors are: (i) a requirement for Municipal Advisors to register with the SEC and the MSRB; and (ii) the codification of a fiduciary duty of Municipal Advisors to the municipal entities they serve.

The Dodd-Frank Act defines a “Municipal Advisor” as anyone (except for a municipal entity or an employee of a municipal entity) that (1) provides advice to a municipal entity or obligated person regarding municipal financial products or the issuance of municipal Securities; or (2) undertakes a solicitation of a municipal entity or obligated person on behalf of a broker, dealer, municipal Securities dealer, Municipal Advisor or investment advisor; for, or in connection with, municipal financial products, the issuance of municipal Securities or investment advisory services for a municipal entity. The statutory definition of Municipal Advisor explicitly excludes the following financial professionals, thereby exempting them from registration: (1) brokers, dealers and municipal Securities dealers acting as Underwriters; (2) investment advisors registered under the Investment Advisers Act of 1940 and providing traditional investment advice; (3) attorneys providing traditional legal services; and (4) engineers providing engineering advice.

Fiduciary Duty

The Dodd-Frank Act imposes a fiduciary duty on Municipal Advisors. The Dodd-Frank Act requires the MSRB to “prescribe means reasonably designed to prevent acts, practices and courses of business as are not consistent with a municipal advisor’s fiduciary duty to its clients.” The MSRB has adopted Rule G-42, which implements this rule.  

Dive Deeper

Learn more about the Municipal Securities Rulemaking Board (MSRB) and select rules.

Regulation of Asset-Backed Securities (ABS)

The Dodd-Frank Act also conferred new powers upon the SEC to directly regulate Asset-Backed Securities (ABS), including those issued by municipal entities. The Dodd-Frank Act further gives the SEC discretion whether to apply the ABS regulations to Issuers of municipal Securities.


  • Comments

Joint Response to ABS Conflicts of Interests Proposal

Comments submitted by a NABL-led coalition in response to the SEC’s request for comments on its proposed rule “Prohibition Against Conflicts of Interest in Certain Securitizations.”

  • Comments

Response to MSRB Proposal to Improve Disclosure of Direct Purchases and Bank Loans (Notice 2016-11)

Comments relating to MSRB Regulatory Notice 2016-11 (March 28, 2016), in which the Municipal Securities Rulemaking Board solicited comments on a concept proposal to require municipal advisors to disclose information…

Dive Deeper on State Law Matters

Learn more about the various aspects of state laws and how they intersect with municipal securities.

See Also

Securities and Exchange Commission (SEC)

Federal agency that oversees and regulates the securities industry and aims “to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation.”

Municipal (Financial) Advisor

A consultant to an issuer (or, in some cases, a borrower) which provides advice with respect to the structure, timing, terms or other similar matters concerning a bond issue.

Hudson Yards Rail Yards

Start with the Bond Basics

Minimum Denomination

The lowest denomination of bond that can be purchased as authorized by the bond documents.