WASHINGTON — The bill introduced by Rep. Robert Dold, R-Ill., to limit the muni market participants that would be federally regulated as municipal advisors could reduce protection of state and local governments, the chairman of the Municipal Securities Rulemaking Board warned a congressional panel.

In testimony submitted to the House Financial Service Committee’s capital markets panel, which is holding a hearing on the bill on Friday, MSRB chairman Alan Polsky said the measure would exempt certain categories of market participants, like dealers, banks and investment advisors that are already regulated by federal agencies, from being considered municipal advisors without regard to whether their muni advisory-like activities are also regulated.

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