The MSRB issued guidance on the application of MSRB Rule G-42 to non-solicitor municipal advisors with regards to conduit financing. The MSRB detailed Rule G-42 applicability for the following scenarios:
- a municipal advisor is hired by an issuer to provide advice directly to a conduit borrower regarding a specific issuance of municipal securities;
- a municipal advisor engages in municipal advisory activities for an issuer, and the issuer then communicates that advice to a conduit borrower;
- a municipal adviser is retained by and provides services for a conduit borrower and advice for the issuer, but is compensated by the conduit borrower;
- an issuer and conduit borrower retain the same municipal advisor to provide advice on a particular issuance; and
- two employees of a municipal advisor are hired in relation to the same issuance, where one person is retained by the issuer and the other is retained by the conduit borrower.
The MSRB reminded firms of certain compliance risks and encouraged a careful assessment of duties to clients specific to each relationship. In cases of dual representation, the MSRB noted that advisors must make a determination as to whether it is possible to meet its duties to both represented parties.
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