Series 54: 1.6.1. Underwriter Exclusion

Taken from our Series 54 Online Guide

1.6.1. Underwriter Exclusion

Once a municipality has engaged the services of an underwriter on a specific transaction, the underwriter may give advice to the municipality or obligated person. This is called the underwriter exclusion. Engagement must occur through a contractual agreement and the agreement must include the required underwriter disclosures listed in MSRB Rule G-17. The engagement may occur through either of the following:

Traditional engagement agreement

Non-binding letter of intent (LOI) agreement—this kind of agreement does not obligate the issuer to issue any debt or use the underwriter

The engagement agreement should contain the following:

Written approval by the governing body or a responsible official of the municipal entity

Information relating to the underwriting services

The role of the broker-dealer in the transaction

Information relating to a particular issuance of municipal securities that the municipal entity or obligated person anticipates issuing (should not be a general engagement for underwriting services that does not relate to any particular transaction)

All disclosures that are required by underwriters by the time of the engagement listed in G-17 (see next section)

A broker-dealer that acts as a municipal advisor to a municipality may not switch from a municipal advisor to a

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