2.2.4. Obligations of Solicitor Municipal Advisors
Solicitor municipal advisors are engaged by municipal dealers and non-solicitor municipal advisors to sell products and services to municipal entities and obligated persons. Therefore, municipal dealers and non-solicitor municipal advisors are the clients of solicitor municipal advisors, not the municipal entities or obligated persons the solicitor MAs are soliciting to. Because of this, solicitor MAs do not owe a duty of care or a duty of loyalty to the municipal entities or obligated persons they are soliciting.
Solicitor MAs are subject to the requirements of MSRB G-17 which requires them to deal fairly with all persons and not engage in deceptive, dishonest, or unfair practices. This means that solicitor MAs must deal fairly with both municipal entities and obligated persons. In addition to the municipal entities that issue securities, such as a state or municipality, municipal entities also include entities that do not issue securities such as state and local pension plans and local government investment pools (LGIPs).
In addition, under G-17, solicitor MAs must not misrepresent or omit facts, risks, or other material information about their advisory activities.
As part of the duty to deal fairly, solicitor MAs are required to disclose the following information to municipal entities and obligated persons:
• Name of the solicitor’s client (municipal dealers and non-solicitor MAs)
• Type of business being solicited
• Amount and source of all of the solicitor’s compensation
• Payments (including in-kind) made by the solicitor to another solicitor municipal advisor (including an affiliate, but not an employee) to facilitate the solicitation regardless of characterization
• Any relationships of the solicitor with any employees or board members of the municipal entity or obligated person being solicited or any other persons affiliated with the municipal entity or obl