[author: Steve Quinlivan] 

The Municipal Securities Rulemaking Board, or MSRB, has published implementation guidance to assist underwriters in meeting their newly expanded legal obligations to state and local governments. According to the MSRB, the Dodd-Frank Act expressly directs the MSRB to protect municipal entities.

Effective August 2, 2012, underwriters of municipal securities are required to disclose to their state and local government clients information about their role in a municipal bond transaction, risks about complex financial transactions, potential conflicts of interest and compensation received from third-party providers of derivatives and other investments, among other new requirements. According to the MSRB, these expanded obligations are intended to ensure state and local governments have the necessary information to make decisions when undertaking financial The transactions, and are outlined in an interpretive notice to MSRB Rule G-17 on fair dealing, which was approved by the Securities and Exchange Commission on May 4, 2012. The interpretive notice also describes fair dealing responsibilities of underwriters in connection with their representations to issuers and with certain financial aspects of an underwriting.

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