Lawyers representing the municipal market's top bond firms have completed their revision of a voluntary ban on campaign contributions and have presented the new version to the Securities and Exchange Commission, sources with knowledge of the matter say.
Wall Street agreed to the contribution ban last October, but the accord has faced a number of revisions as bond houses attempt to make their rule read more like a federal ban on contributions mandated by the Municipal Securities Rulemaking Board.
Sources with knowledge of the agreement say the new accord will for the first time allow municipal securities dealers to make $250 contributions to politicians in the districts where the dealers live. Previously, the agreement said that municipai executives could make no contributions.
Other changes to the original accord weaken a disclosure rule on consultants. The accord had called on dealers to disclose their use of consultants to issuers and bond syndicates where the consultant played some role in the financing.
Under the revision, firms still must disclose consultants to the issuer, but only to the syndicate upon request.
The last substantial change involves a rewriting of the way in which executives at some affiliated companies of municipal bond houses are to be treated. The new rule. sources drafting the document say, does, not automatically disqualify these employees from affiliated companies from making campaign contributions.
Some compliance lawyers on Wall Street complained that the first draft contained language that appeared to disqualify employees at affiliates from making contributions.
Lawyers with knowledge of the revisions say they have presented the document to SEC chairman Arthur Levitt Jr. Lawyers say they will not move forward with the plan until Levitt approves the amendments
One lawyer with knowledge of the revisions said that Levitt agrees with the substance of the document. A commission spokeswoman said Levitt does not yet have a formal response to the plan.
