Amended Rule G-37 (“Rule” or “Amended Rule”) exists to “protect[]…municipal entities and obligated persons by subjecting municipal advisors to a ban on municipal advisory business upon the making of certain contributions…” Municipal Securities Rulemaking Board Regulatory Notice 2016- 06 (Feb. 17, 2016) (“MSRB Notice”) at 4. The Rule expands upon existing regulations limiting campaign contributions from municipal securities dealers, and extends those restrictions to municipal advisors and their affiliated persons. With minor exceptions, this greatly limits the ability of those municipal financial advisors whom the Rule classifies as “municipal advisor professionals (MAPs)” to make political contributions to any candidate that might be tangentially involved in hiring dealers for municipal securities business. Specifically, a MAP is only permitted to make $250 contributions to candidates for whom she is eligible to vote. Apart from that narrow exception, the Rule bars municipal advisors or broker dealers from doing any compensated business—for two years—with any municipal entity whose covered officials have received a political contribution. The Rule is overinclusive as applied to Independent Broker-Dealer firms, an enormous swath of the regulated community whose concerns are not reflected in the MSRB’s final rule. This is troubling enough as a matter of administrative law, but it is especially pernicious here because political contributions, a substantial number of Case: 16-3360 Document: 41 Filed: 11/23/2016 Page: 9 2 which have been constructively banned by the Rule, “lie[] at the foundation of a free society.” Buckley v. Valeo, 424 U.S. 1, 25 (1976) (per curiam).
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