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Notes on Municipal Advisor regulations, part one

MSA's Funding Experts | with 0 Comments

Notes on Municipal Advisor regulations, part one

Come July 1st, the Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB) are imposing new requirements to regulate the interaction between architectural/engineering (A/E) consultants and municipalities.
In this first post of our “Notes from a Registered Municipal Advisor” series, we’re just going to focus on the basics. In the weeks to follow, we’ll explore the topic in greater depth, answering questions like…What, exactly, is a Municipal Advisor?  When do communities need to get a Municipal Advisor involved in infrastructure improvement projects? Why is this new rule being imposed?
First things first – What, exactly, is a Municipal Advisor?
A Municipal Advisor is any entity that provides advice on the issuance of municipal debt. Now, that’s a pretty generic definition, but that generality is intentional! The Municipal Advisor rule is meant to protect municipalities from unfounded recommendations that aren’t financially viable.
A/E firms that provide certain traditional and non-traditional services to municipal clients will be required to register as a Municipal Advisor with both the SEC and MSRB. This registration means they’ll need to comply with numerous regulations. If you rely on an A/E firm to provide any of the following services to your community, be mindful that the Municipal Advisor rule will likely apply:
  • Identifying, recommending and facilitating state and federal grant and subsidized loan programs (USDA Rural Development, State Revolving Loan Fund, etc.) to help lower the cost of municipal projects
  • Creating, amending or analyzing tax increment finance (TIF) districts, including the drafting of development agreements
  • Recommending utility and tax rates to fund municipal infrastructure projects
  • Making recommendations relative to the timing and structure or terms of a loan program used to finance municipal infrastructure projects
That summary addresses the “What?” – our post next week will focus on the “Why?” Be sure to check back next week to learn more about why the SEC and MSRB are imposing the Municipal Advisor rule.
Additional information is surfacing almost daily form the SEC and MSRB and MSA is dedicated to staying ahead of the regulatory curve. If you’d like additional information pertaining to how these new regulations might impact your community, we’re more than happy to help.

Contact MSA's funding team with any questions or concerns you might have relative to the new Municipal Advisor regulations.

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