For how long is a broker-dealer restricted from engaging in negotiated underwritings with a city if a member financial professional contributes to a friend running for treasurer?

The correct duration of restriction for a broker-dealer engaging in negotiated underwritings with a city, following a contribution made by a member financial professional to a friend running for treasurer, is two years. This rule is part of the regulatory framework designed to prevent conflicts of interest and ensure that contributions do not unduly influence government financing decisions.

In this scenario, the rationale behind the two-year period is to create a cooling-off period that prevents any perceptions of favoritism or impropriety in relationship to municipal underwritings. The two-year rule serves as a safeguard, ensuring that the financial professional's contribution does not unduly benefit the broker-dealer during this restricted timeframe, thereby promoting ethical standards and integrity within public financing processes.

Understanding this time restriction helps underscore the regulatory intent behind mitigating potential conflicts associated with political contributions in financial dealings, particularly in the context of government financing through negotiated underwritings.