Aug 14 (Reuters) - The U.S. Securities and Exchange Commission proposed easing regulations that bar investment advisers from managing public pension funds after making political contributions to state and local officials.

The regulator on Wednesday submitted the proposal to the White House for review, a posting on the Office of Management and Budget website showed. It proposes changes to the SEC's "pay-to-play" rule for investment advisers.

The posting said the reform was aimed at reducing identified compliance burdens. The proposal is at an early stage, with regulators seeking feedback on the proposed rule change.

"The current 'pay-to-play' rule creates unnecessary compliance burdens and overly restricts investment advisors," a spokesperson for the SEC said in an emailed statement to Reuters.

"The Commission is heeding years of complaints from across the political spectrum and will consider a proposal to address these issues and reform the rule."

Under the SEC's "pay-to-play" rule, investment advisers face a two-year ban on collecting fees for managing public assets if the firm, key personnel or an affiliated political action committee donates to state or local political campaigns.

Even though the rule has been modified a few times after it was originally adopted in 2010, the two-year segment has remained intact.

The pay-to-play rule also prohibits investment advisers and covered employees from fundraising for candidates, state as well as local political parties in jurisdictions where the adviser is seeking or conducting government investment advisory business.

The proposition falls in line with U.S. President Donald Trump's deregulation push.

However, it might invite fierce opposition from the Democrats as loosening the restrictions could invite political corruption and put billions of dollars in state and local public pension funds at risk.

The move comes ahead of the November 3 midterm elections, which will determine control of Congress. Republicans are defending narrow majorities in the House and Senate, making the outcome pivotal for the remainder of Trump's term.