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Relevant to the Series 50
Which of the following would be required to register as a municipal advisor?
I. A broker-dealer providing advice to a municipal advisor rather than directly to the municipality
II. An underwriter advising a municipality to meet continuing disclosure requirements for a bond issue for which the underwriter is not engaged
III. A bank encouraging a municipality to take out a direct loan
IV. An investment adviser providing advice about investing in municipal derivatives
A. I and IV
B. II and III
C. I and III
D. II and IV
If a broker-dealer provides advice to a municipal advisor, this is known as indirect advice, and it would require the firm to register as a municipal advisor. Investment advisers may avoid registering as municipal advisors as long as they avoid providing certain types of advice, including advice about municipal derivatives.
An underwriter is not required to register if it encourages a municipality to meet continuing disclosure requirements, even if the continuing disclosure is for a bond issue for which the underwriter was not engaged.
Banks are exempt from the definition of municipal advisor as long as they restrict their advice to certain topics, including extensions of credit by the bank to a municipal entity.