The Municipal Securities Rulemaking Board released for comment Thursday its rule proposal, Rule G-42, on standards of conduct and duties of municipal advisors when engaging in municipal advisory activities other than the undertaking of solicitations.
The proposal states that “irrespective of any fiduciary duties, draft Rule G-42 subjects municipal advisors to a duty of care in the conduct of their municipal advisory activities. In addition, draft Rule G-42 requires municipal advisors to disclose conflicts of interest and certain other information to their clients and document their municipal advisory relationship.”
Lynette Kelly, MSRB’s executive director, said on a call with reporters that the rule proposal “focuses on the core standards of conduct” to which municipal advisors should adhere, including their fiduciary duties.
Kelly said that the proposed rule “strikes an appropriate balance and that the proposal is workable for municipal advisors of all sizes.”
Comments on the proposed rule will be taken until March 10.
MSRB says that it invites comments on, for instance, whether draft Rule G-42 “appropriately limits the application of the fiduciary duty to municipal advisors’ municipal entity clients, or should extend such fiduciary duty to all clients, including obligated persons, under the MSRB’s issuer protection mandates.”