Series 54: 1.6.1.1. Underwriter Disclosures To Issuers (MSRB Rule G-17)

1.6.1.1. Underwriter Disclosures to Issuers (MSRB Rule G-17)

MSRB Rule G-17 requires that dealers conducting municipal securities activities deal fairly with all persons involved in an offering (meaning both issuers and investors) and not engage in any deceptive, dishonest, or unfair practice. For underwriters engaged in negotiated offerings, the duty to deal fairly requires the underwriter to make certain disclosures to the issuers of municipal securities.

The required disclosures touch on three main areas: the underwriter’s role, compensation, and any conflicts of interest. Under MSRB Rule G-17, the underwriter must disclose to the issuer:

• That the underwriter is required to deal fairly at all times with both municipal issuers and investors

• That the underwriter’s primary role is to purchase securities with a view to distribution, and thus, the underwriter may have interests different from the issuer