Conflicts Disclosure and Acknowledgments in MSRB Rule G-17 Disclosure Letters


Since August 2, 2012, investment banking firms retained to act as underwriters on municipal finance transactions have been required to provide written disclosure to issuers concerning the relationship between issuers and underwriters, possible conflicts of interest and certain other matters under Municipal Securities Rulemaking Board (MSRB) Rule G-17 (Rule G-17) and MSRB Notice 2012-25 (the "Interpretive Notice").  http://www.msrb.org/Rules-and-Interpretations/Regulatory-Notices/2012/2012-25.aspx.  The Securities Industry and Financial Markets Association (SIFMA) has provided a model for such disclosure letters (the "SIFMA Model").http://www.sifma.org/uploadedfiles/services/standard_forms_and_documentation/municipal_securities_markets/sifmamodelg-17underwriterdisclosureletter07-18-2012.pdf

The following are some thoughts on the form of the SIFMA Model and on sample disclosure letters received to date by certain issuers represented by this firm:

At this point, it seems unlikely that individual underwriters will deviate very far from the SIFMA Model letter.  It is likely that SIFMA will review the form and comments received from issuers and underwriters and may incorporate changes to address any concerns raised by issuers as to the language regarding conflicts or otherwise.


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National Law Review, Volume II, Number 282