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U.S. municipal adviser rule unveiled; raises transaction worries 

January 13, 2014
Lisa Lambert, Reuters

The board overseeing the U.S. municipal bond market on Thursday proposed a strict code of conduct for financial advisers to cities and states, including a ban on their role in principal transactions - a change that has raised concerns in the securities industry.

The Dodd-Frank Act, approved after the 2008 financial crisis, requires the advisers who consult with municipalities about selling bonds and buying derivatives to register with the Securities and Exchange Commission and comply with similar rules for municipal brokers and dealers.

In a long-awaited proposal on the advisers' fiduciary duties and business conduct, the Municipal Securities Rulemaking Board (MSRB) suggested barring advisers from participating in principal transactions, even if a municipality gives informed consent.

Read more: Reuters

 
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