Washington

A Financial Industry Regulatory Authority arbitration panel has ruled against The Police and Fire Retirement System of the City of Detroit, which was seeking at least $39.9 million from Citigroup Global Markets, Morgan Stanley Dean Witter and other firms over risky investments.

Market participants are generally pleased that the Securities and Exchange Commission has adopted a municipal adviser definition that addressed concerns from several sectors of the muni bond industry, but independent MAs remain concerned that the registration exemptions might allow for abuses Dodd-Frank was intended to curb.

Municipal money market funds should not be required to have floating rate net asset values, most of the witnesses and several lawmakers said at a hearing held here on Wednesday by a House Financial Services Committee panel.

The Municipal Securities Rulemaking Board has asked the Securities and Exchange Commission to approve a package of rules and proposed rule changes designed to consolidate and harmonize fair dealing requirements for muni securities dealers.

The Securities and Exchange Commission unanimously adopted a registration rule for municipal advisors, establishing that they have a federal fiduciary duty to clients if they provide advice, compensated or not, that is related to bonds or other municipal financial products and involves recommendations based on the specific needs of a municipal entity.

The sentencing of former UBS banker Mark Zaino, who pleaded guilty of municipal bond bid-rigging, was rescheduled to Oct. 24 in a New York federal court.

State and local governments are urging the Securities and Exchange Commission to either abandon proposed reforms for money market funds or exempt municipal MMFs from the reforms and clarify the rule changes are not meant to impact local government investment pools.

Reps. Steve Stivers, R-Ohio, and Gwen Moore, D-Wis., are urging the Securities and Exchange Commission's newest members to support the bipartisan legislative duo's efforts to narrow the definition of municipal advisor.

The Financial Industry Regulatory Authority fined three firms and one individual a total of $87,500 for violating pricing, trade reporting and other muni violations, with Tradition Asiel Securities accounting for $80,000 of that.

The Securities and Exchange Commission plans to meet on Wednesday, Sept. 18 to consider whether to adopt new registration rules and forms for municipal advisors that detail who they are.