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Effective July 1, 2014
Municipal Advisor Rule states that when a firm offers what is construed
as “advice” (a recommendation related to a transaction) that firm shall
be construed as a municipal advisor.
order to avoid registering with the Securities and Exchange Commission
and the Municipal Securities Rulemaking Board, underwriters must either
refrain from offering any suggestion that could be construed as advice
or obtain one of the exemptions outlined below.
The municipal advisor must be registered and independent,
meaning the municipal advisor shall not have anyone working on the
financial advisory team for a client who has been associated with the
soliciting underwriter in the past two years.
The municipal entity or obligated person must represent in
writing that it is being represented by a municipal advisor, will rely
on the advice of that municipal advisor, and must define the scope of
advice they are receiving from that municipal advisor. “Rely” means seek
and consider advice.
The underwriter must confirm receipt of the municipal entity or
obligated person’s representations for the IRMA Exemption and must
disclose to the municipal entity or obligated person, with a copy to the
IRMA, that the underwriter is not a municipal advisor and does not have
a fiduciary duty to the municipal entity or obligated person.
the IRMA Exemption allows the least amount of restriction to the
underwriter in terms of providing advice to the municipal entity or
obligated person, it is most likely to be the first exemption sought by
the underwriter when seeking to avoid being registered as a municipal
Independent Registered Municipal Advisor Certificate
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