Series 54: Look-Back Provision

Look-Back Provision

The pay to play rule contains a look-back provision that requires dealers and advisors to look back when determining whether an associated person has triggered the ban on securities or advisory business.

A contribution will trigger the ban if it was made within two years prior to the date the individual became an MFP or MAP.

A contribution will not trigger the ban if either of the following conditions hold:

•It was made by a natural person who was not an MFP or MAP at the time that the contribution was made but who became an MFP or MAP for the sole purpose of being a solicitor and has not solicited the municipal entity since the contribution was made.

•It was made by a natural person who is an MFP or MAP solely because of his management or supervisory position, and it was made more than six months prior to the date that the individual became an MFP or MAP.

Example Question 1

While working at a Starbucks, Jenny contributes $300 to the political campaign of a local official in the place where she lives. One year later, she lands a job as a Municipal Advisor Representative at a municipal advisory firm. The firm’s main clients are governmental entities, and the official to whom Jenny contributed has the authority to direct business to Jenny’s new firm. Wil