SEC approves MSRB's new underwriter disclosure requirements
Abstract
Purpose
The aim is to explain certain disclosure and other obligations of municipal securities dealers when they act as underwriters to municipal securities issuers, as contained in a Municipal Securities Rulemaking Board interpretive notice regarding MSRB Rule G‐17, approved by the Securities and Exchange Commission on May 4, 2012.
Design/methodology/approach
The paper explains the basic fair dealing principle; required disclosure by an underwriter; timing, manner, acknowledgement, and substance of disclosures; guidance concerning the role and compensation of the underwriter; disclosures of other conflicts; disclosures required in the case of complex financing structures; guidance concerning underwriter compensation and new issuance pricing; requirements for underwriters to honor retail order periods; and guidance on dealer payments to issuer personnel.
Findings
Although most underwriters have always viewed themselves as having a duty of fair dealing to municipal issuers, the MSRB's notice will require underwriters to formalize their procedures. Underwriters will have to develop mandatory disclosures, checklists of potential conflict disclosures, and procedures for receiving written acknowledgments. They will need to rethink how they approach complex financings.
Originality/value
The paper provides practical guidance from experienced securities lawyers.
Keywords
Citation
Hardy Callcott, W., Baird, E.H., Foley, T.C. and Tyrrell, P.M. (2012), "SEC approves MSRB's new underwriter disclosure requirements", Journal of Investment Compliance, Vol. 13 No. 3, pp. 69-73. https://doi.org/10.1108/15285811211266155
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited