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Proposed New MSRB Rule on Standards of Conduct for Municipal Advisors

March 3, 2014

On January 9, 2014 the Municipal Securities Rulemaking Board (MSRB) issued proposed Rule G-42 on the standards of conduct and duties of municipal advisors when engaging in municipal advisory activities other than making solicitations.  The MSRB and the Securities Exchange Commission have been concerned about the adequacy of advice and training of financial advisors, conflicts of interest and whether financial advisors have consistently and sufficiently placed client interests above their own.  As a follow-on to the new registration requirements for municipal advisors, and the amendments to Rule G-17 which require municipal advisors to deal fairly with their clients and not engage in deceptive, dishonest or unfair practices, proposed Rule G-42 would require municipal advisors to: 

Proposed Rule G-42 also prohibits a municipal advisor from receiving excessive compensation, misrepresenting its capacity, resources and expertise, fee splitting and delivering an invoice which does not accurately reflect services provided and by whom they were performed.

Please contact us for further information relevant to your needs. 

>>See also our separate Alert on New SEC Regulation of Municipal Advisors and Underwriters.

Amanda Van Dusen • +1.313.496.7512
Thomas Colis • +1.313.496.7677