Rule G-17 Guidance on Underwriter Responsibilities Becomes Effective August 2, 2012Download
The Municipal Securities Rulemaking Boards Interpretative Guidance on Underwriter Fair Dealing Obligations contained in Notice 2012-25 will become effective for bonds sold on or after August 2, 2012. The Notice imposes expansive code of conduct and disclosure requirements on underwriters of municipal securities under the “fair dealing” provisions of MSRB Rule G-17, which provides in pertinent part:
“In the conduct of its municipal securities activities, each broker, dealer and municipal securities dealer shall deal fairly with all persons and shall not engage in any deceptive, dishonest, or unfair practice.”
The MSRB published implementation guidance on July 18, 2012 to assist dealers in revising their written supervisory procedures to ensure full compliance with the Notice, as well as to clarify certain provisions of the Notice. This Client Alert summarizes both the Notice and the Guidance.