MSRB Proposes Amendments to Underwriter Fair-Dealing Obligations to Issuers

Date: November 16, 2018
Contact: Jennifer A. Galloway, Chief Communications Officer


Washington, DC – As part of an ongoing retrospective review of its rules and their interpretations, the Municipal Securities Rulemaking Board (MSRB) is seeking comment on proposed amendments to interpretive guidance it issued in 2012 on the application of MSRB Rule G-17. The guidance addresses certain fair-dealing obligations municipal securities dealers owe issuers when underwriting municipal securities, including requirements for underwriters to disclose information to issuers about the nature of their relationship with the issuer and the risks of transactions recommended by the underwriters. The proposed amendments primarily address the disclosure requirements, with the goal of improving market practices, better protecting issuers and reducing burdens on market participants.

At its quarterly meeting in October 2018, the MSRB Board of Directors discussed comments received on an initial request for comment regarding the guidance and decided to publish this second request for comment, which proposes to streamline the guidance in a way that does not compromise the regulatory intent of the guidance regarding the protection of issuers. The proposed amendments are intended to respond to market participants’ feedback that, among other things, disclosures provided by underwriters under the current guidance are voluminous, duplicative, often boilerplate and burdensome for both dealers and issuers.

Read the request for comment. Comments should be submitted no later than January 15, 2019, and may be submitted electronically by clicking here, or by paper to Ronald W. Smith, Corporate Secretary, 1300 I Street NW, Suite 1000, Washington, DC 20005.

The MSRB protects investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. The MSRB fulfills this mission by regulating the municipal securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. To further protect market participants, the MSRB provides market transparency through its Electronic Municipal Market Access (EMMA®) website, the official repository for information on all municipal bonds. The MSRB also serves as an objective resource on the municipal market, conducts extensive education and outreach to market stakeholders, and provides market leadership on key issues. The MSRB is a self-regulatory organization governed by a 21-member board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is overseen by the Securities and Exchange Commission and Congress.