The SEC issued an alert on Friday regarding compliance with its Pay-to-Play rule. The Risk Alert issued by the agency’s Office of Compliance Inspections and Examinations notes that SEC examiners have observed practices that raise concerns about firms’ compliance with their obligations under MSRB Rule G-37, which clamped down on so-called “pay to play” practices. These concerns include:
- Compliance with the rule’s ban on doing business with a municipal issuer within two years of a political contribution to officials of the issuer by any of the firm’s municipal finance professionals
- Possible recordkeeping violations
- Failure to file accurate and complete required forms with regulators regarding political contributions
- Inadequate supervision
I have made changes to Compliance Policy & Procedures manuals this summer, adding or revising Pay-to-Play policies. As you can see, this is something to be aware of. Take a look are your own policy to be sure that it meets the necessary requirements.