Subject: File No. S7-45-10
From: Andres Barboza
Affiliation: Board Chairman Corpus Christi Firefighters' Retirement System

February 22, 2011

The Board of Trustees of the Corpus Christi Firefighters Retirement System opposes the proposed rule requiring registration of board members of public retirement systems who constitute "municipal advisors" for the following reasons:
Public retirement system governing boards depend on local citizens' willingness to share their time and expertise on a pro bono basis to provide public input, monitoring and governance of the public pension system. Frequently this requires additional training and expenditure of time to prepare for and participate in governing and decision-making process of the board. Additional regulatory burdens, including registration requirements, will discourage qualified persons from providing this public service, to the detriment of the public retirement systems.
Frequently public retirement systems benefit from the appointment of licensed investment professionals and licensed or certified professional advisors such as attorneys and CPAs who can share their professional expertise in an objective manner with the participant-members and employees of governmental entities in the decision-making and management of the retirement system. These board members are not advising the public retirement system concerning the management and investment of its assets instead, they are part of the decision-making team along with other board members. This role should be contrasted with the roles of advisors who are providing investment advice to the board members, who then assimilate and act on the advice on behalf of the public retirement system. Furthermore, these licensed professionals are subject to regulation and continuing education requirements in their own areas of expertise and are sharing this regulated expertise for the public benefit in the decision-making process.
Often a governing board is structured as a board of trustees, with the result that each of the board members serves as a trustee with attendant fiduciary responsibilities. In that case, each trustee-board member is directly accountable to the citizens of the municipal entity for his actions in the capacity as a trustee. Additional registration requirements will not significantly increase this accountability.
If licensed investment advisor-employees of licensed and regulated investment firms are subjected to additional registration and regulation requirements for their public service activities, such as service on a public retirement pension system board, it is conceivable, and in fact likely, that the firms will discourage or even prohibit their licensed employees from serving on such boards. The regulated investment firms will not be in a position of oversight and control over the activities of its licensed professionals outside of the course and scope of their professional employment and likely will not be willing to risk claims that the firms should be responsible for their registered employees' activities. As a result, public retirement system boards will be denied access to this valuable source of expertise as a part of their board membership. Boards will be forced to engage similar outside expertise, perhaps at a substantial additional expense, to the potential detriment of the public employee participants in the public retirement systems.
If it is determined that appointed members of public retirement systems must register as municipal advisors despite the foregoing detriments to the public retirement systems and their members and beneficiaries, then an exclusion should be provided for each appointed board member who is otherwise registered with the SEC or FINRA or licensed by the state or federal government, including without limitation, licensed investment advisors, certified public accountants, attorneys and similarly licensed professionals. These individuals are subject to continuing regulation and continuing education requirements in their respective areas of expertise which they are making available to the public retirement systems. This existing oversight and regulation by the respective licensing agencies will provide sufficient assurance that the objectives of the Dodd-Frank Act are being satisfied by these licensed professionals.
We respectfully urge the delay of the implementation of the proposed registration requirements as of October 1, 2011 until the scope of the impact on public retirement systems can be determined and analyzed.

Corpus Christi Firefighters Retirement System
711 N. Carancahua, Suite 724
Corpus Christi, TX 78401-0544