WASHINGTON — Self-regulatory officials may assess fees on municipal advisers based on their advisory activity and are focused on disclosure to retail muni investors.

Municipal Securities Rulemaking Board and Financial Industry Regulatory Authority officials discussed the issues at The Bond Buyer’s National Municipal Bond Summit in Miami.

In response to a complaint about recent dealer-fee increases from Mike Nicholas, chief executive officer of the Bond Dealers of America, Peg Henry, the MSRB’s deputy general counsel, said the board is weighing whether to charge muni advisers fees based on their advisory business.

“The board is committed to making sure that reasonable fees commensurate with muni adviser activity are considered so that the entire funding of the board’s operation is not just coming from the dealers,” Henry said.

Currently, muni advisers pay the MSRB only a $100 initial fee and a $500 annual fee.

Nicholas said the board’s fees have spiked as much as 200% to 400% for some broker-dealer firms, at least on a per-month basis.

The Securities and Exchange Commission in January approved a proposal to nearly double the amount of fees the MSRB collects from dealers, despite dealers’ opposition to it.

Henry said the board instituted technology fees and increased transaction fees to reduce its reliance on underwriting assessments. Still, she suggested, the MSRB might be able to reduce the fees dealers pay.

FINRA, meanwhile, has stepped up scrutiny of municipal securities broker-dealers’ disclosures to retail investors, with several recent and pending enforcement actions, according to Mac Northam, the authority’s director of fixed income, member regulation, and sales practice policy.

FINRA is particularly concerned about “accurate and timely disclosures of material information” when broker-dealers sell munis to retail investors, he said. The concerns are exacerbated because many issuers file “inconsistent and untimely financial disclosures” and regulators lack a “direct mechanism” to compel issuers to make “consistent and timely disclosures,” Northam said.

“We need to be really careful here that the small investor does not absorb the risk of deficient disclosures merely to help the issuer achieve a low net-interest cost on their bond issue,” he said.

He added that FINRA is conducting reviews of broker-dealers, looking at whether firms meet their sales practice and due diligence obligations to muni investors at the time of transactions in the primary and secondary markets.

Northam also said firms can expect to see several formal actions stemming from inadequate disclosures of material information at the time of trade, failure to deliver official statements to retail investors during the primary offering period, and failure to have a process in place to meet due-diligence requirements.

In response to a question from Mitch Rapaport, a partner at Nixon Peabody LLP in Washington, about how far broker-dealers must go to comply with a customer disclosure checklist FINRA floated last fall, Northam explained the origin of the document.

During a sweep, FINRA found that some firms had no process to monitor their disclosure obligations, he said. Other firms had developed checklists on their own, using them as series of talking points for prodding sales representatives to cover information, such as bond ratings, with retail investors. FINRA then built on those firms’ approaches, creating its own model.

“So what we attempted to do with that checklist was to provide a model of what firms might use, never intending that you’d use that piece of paper as a 'By Gosh’ piece of paper that you needed to fill out and complete and put it in the file,” Northam said. “Although some firms are doing that.”