The Bond Dealers of America is releasing a paper prepared by outside counsel Nixon Peabody to assist the industry in better understanding the Municipal Advisor Rule, which is effective July 1, 2014.
The paper is entitled, “The Municipal Advisor Rule: Receiving Advice from your Broker-Dealer Regarding Investments” and is meant to assist state and local governments in understanding the impact that the Municipal Advisor Rule has on sales and purchases of securities through broker-dealers.
The paper addresses the following questions:
- Why does the Municipal Advisor Rule cause my broker to ask if we are investing funds that are proceeds from the issuance of municipal securities or escrow investments?
- Why is my broker concerned about being a municipal advisor?
- Why is my broker asking for me to provide an acknowledgement that the amounts we want to invest are not proceeds from the issuance of municipal securities or escrow investments?
- How do I know if the amounts we want to invest are proceeds from the issuance of municipal securities or escrow investments?
- Can my broker become a municipal advisor if it provides advice concerning investments that do not constitute proceeds from the issuance of municipal securities or escrow investments?
- If I want investment advice from my broker concerning the investment of the proceeds of municipal securities or escrow investments, what can I do?
- What would I need to do to solicit advice from brokers using the RFP exclusion?
- When would it make sense for a municipal entity or obligated person to use the IRMA exception to receive advice from brokers?
- If a broker cannot provide advice without becoming a municipal advisor, what information can the broker provide?
The paper is meant to provide a factual and concise one-stop place for your questions regarding the MA rule and investment advice.