The House Financial Services Committee yesterday voted 41 to 28 to approve a bill that would require financial advisers in the municipal market to register with the Securities and Exchange Commission and direct the Municipal Securities Rulemaking Board to have a majority of public members.

The Investor Protection Act of 2009, HR 3817, would broadly define muni financial advisers to include any person who, for compensation, advises a municipal issuer with regard to: the issuance or remarketing of bonds; the investment of bond proceeds, including GIC brokers; the hedging of any risks associated with bonds or investments, including advice on swap agreements; and the preparation of disclosure documents.

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