In the spring of 2012, the Securities and Exchange Commission approved the release of MSRB Notice 2012-25, which provided interpretive guidance on how SEC Rule G-17 applied to underwriters of municipal securities transactions. Under the “fair dealing” provisions of Rule G-17, the MSRB Notice imposes code of conduct and disclosure requirements on underwriters working with governmental issuers. As many of our issuer clients have experienced, the expanded Rule G-17 has raised many questions that issuers have not faced on prior issues of municipal bonds. Under Rule G-17, on any municipal securities transaction sold after August 1, 2012, an issuer should receive a disclosure letter from its underwriter on a negotiated sale transaction that is meant to clarify the nature of the transaction as well as the relationship between the issuer and the underwriter. Unfortunately, many issuers are now more confused than ever regarding the role of the underwriter in their transaction.

Required Disclosure Content. Many issuers are shocked when receiving

a disclosure letter from its underwriter due to a number of required disclosures that must be made in writing under the Notice. These disclosures must be made to an official with the power to bind the issuer, and include the following...