WASHINGTON — House and Senate conferees meeting to hammer out a financial regulatory reform bill appear to have reached an agreement that would allow the Municipal Securities Rulemaking Board to regulate financial advisers and other market intermediaries.

House conferees, led by Financial Services Committee chairman Barney Frank, D-Mass., late Wednesday backtracked from their preference of giving the Securities and Exchange Commission authority over these advisers. The back-peddling came after Senate Banking Committee chairman Christopher Dodd, D-Conn., said the MSRB is best suited to regulate FAs because of their specialized knowledge of the muni market and because they already have sufficient staff. In contrast, the SEC only has two full-time attorneys dedicated to muni regulatory issues.

In exchange for agreeing to the Senate proposal to give the authority to the MSRB, however, Frank insisted that Senate conferees include language in the final bill that would impose a fiduciary duty on the advisers, requiring them to hold their clients’ interests ahead of their own.

On Thursday, Dodd seemed to go along with Frank’s call for such a provision, but said that section of the bill needs additional work that may not be done until next week.

Dealers have long argued these entities act as renegades because they are not subject to any of regulations or professional qualifications.

But several “independent” non-dealer FAs would prefer to be regulated by the SEC, warning that dealers exert too much control over the MSRB. They also cite the board’s refusal to alter its Rule G-23 — which allows a dealer-FA hired to advise a municipality on a negotiated transaction to switch roles and underwrite the transaction — as evidence that the board does not understand the fiduciary concept.

If the conferees ultimately include the FA language favored by the Senate in the final bill, the MSRB would regulate non-broker-dealer financial advisers, swap advisers, guaranteed investment contract brokers, solicitors, finders, third party marketers and placement agents that advise issuers and other borrowers.

These advisers would have to be registered with the SEC, which also would have the authority to approve and enforce MSRB rules

The Senate text being used as the basis for the conference — which could change — does not apply adviser regulations to dealers acting as underwriters, any investment advisers providing investment advice or commodity trading advisers.

It is not clear how many advisers would fall under MSRB regulations. A report the board released last year on unregulated market participants said that of the 358 FA shops that participated in at least one primary muni market transaction in 2008, only 98 were registered with the MSRB as dealers. Many of those were small FA shops, market participants said, adding that the broader universe of unregulated advisers likely surpasses 1,000 firms.

The fiduciary duty for muni FAs is separate from a similar duty the conferees are debating for dealers that provide personalized investment advice. Conferees yesterday appeared to be at an impasse over their differences. The House language would impose a fiduciary duty on these advisers, while the Senate language would have the SEC study the issue.

“We’re going to still need a few more days, maybe less,” Dodd said.

In another development late Wednesday, Dodd said he was offering an amendment at the request of Sen. Bob Corker, R-Tenn., that would authorize the SEC to direct the Financial Industry Regulatory Authority to collect assessments from muni dealers to fund the Governmental Accounting Standards Board.

GASB is currently funded through voluntary contributions from state and local governments, as well as revenue from the sales of its publications. But it is constantly short of funds and its dependence on issuers is seen as a conflict.

Issuers and dealer groups are said to oppose the GASB funding proposal.

It is not clear when Dodd plans to offer the amendment. A spokesman did not respond to a request for comment.