Posts tagged Municipal Advisor Conduct Rule.
The MSRB's amended Rule G-42 becomes effective June 23, prescribing new conduct standards for municipal advisors and for the underwriters working with them. In advance of the effective date, the MSRB has published interpretive guidance on the new Rule:
For MAs, here. For Underwriters, here. On-demand webinar, here.
Broadly speaking, the amended Rule imposes upon municipal advisors- A fiduciary duty of care and loyalty to municipal entity clients - but only a duty of care to obligated persons (like conduit borrowers);
- A written engagement-letter and conflict-disclosure regime;
Tags: burr forman, MSRB, Municipal Advisor Conduct Rule, Municipal Securities Rulemaking Board, Rule G-42, securities litigation, Securities Litigation & Arbitration
On Christmas Eve's eve, the SEC approved, without change, the MSRB's proposed conduct rule for municipal advisors. Broadly, the Rule imposes:
- Fiduciary duty (care and loyalty) to municipal entity clients but only a duty of care to obligated persons;
- Written engagement-letter and conflict-disclosure regime;
- Suitability and KYC requirements;
- A list of prohibited practices, including a wide-ranging (but not absolute) ban on principal transactions with municipal entity clients.
New Rule G-42 has been in the works since January, 2014 and the MSRB filed two amendments with the SEC ...
Tags: burr forman, MSRB, Municipal Advisor Conduct Rule, Municipal Securities Rulemaking Board, Rule G-42, SEC, Securities and Exchange Commission, securities litigation, Securities Litigation & Arbitration
On November 9, the MSRB filed yet another amendment to its proposed Municipal Advisor conduct Rule G-42. The amendment adds Supplemental Material -.14 and -.15, creating a narrow exception to the principal-transaction ban for particular fixed-income securities after specified disclosure and client consent. To fall within the exception, three preconditions must apply: (a) the MA is a registered BD with respect to a Municipal Entity's ("ME") brokerage account and is acting without general discretion; (b) neither the MA (nor any affiliate) is acting as advisor on municipal ...
Posted in: MSRB
Tags: burr forman, MSRB, Municipal Advisor Conduct Rule, Municipal Advisor conduct Rule G-42, Rule G-42, securities litigation, Securities Litigation & Arbitration
The MSRB responded August 12 to the SEC's initiation of proceedings on proposed conduct standards for Municipal Advisors, filing some amendments to the proposed Rule. The MSRB's Amendment No. 1:
- Eliminates "includes, without limitation" language from the fiduciary-duty standard in Proposed Rule G-42(a)(ii) in response to SIFMA's comment that it raised unnecessary ambiguity, because a fiduciary duty generally is understood to encompass duties of both care and loyalty. MSRB retained that language in Supplementary Material .02 to be clear that the Rule doesn't purport to ...
Posted in: MSRB
Tags: burr forman, MSRB, Municipal Advisor Conduct Rule, SEC, Securities Litigation & Arbitration, Securities Litigation blog
The SEC instituted proceedings August 6 to allow additional time - and analysis - of the MSRB's proposed Rule G-42 establishing broad conduct standards for municipal advisors. The Order essentially buys more time for the SEC to consider, and the MSRB to respond to, industry comments on the proposed Rule. Release No. 34-75628; File No. SR-MSRB-2015-03 (Aug. 6, 2015) The MSRB itself took two runs at the Rule proposal during 2014 before submitting the Rule for SEC consideration last April. The usual approval process ran on August 6 thus requiring the "proceedings" to extend the time to ...
Tags: broad conduct standards for municipal advisors, burr forman, Exchange Act, MSRB, Municipal Advisor Conduct Rule, Rule G-42, SEC, Securities Litigation & Arbitration, Securities Litigation blog