McGuire Sponsel Blog

Are your nonprofit client’s aware of the deadline that recently passed for the Municipal Advisor Qualification Exam to Advise on Debt Financings or Derivatives?  If you are a not-for-profit and working with a Municipal advisor professionals, these professionals must have passed the Series 50 Exam by Sept. 12. After that, municipal advisor representatives who have not passed the Series 50 Exam may not engage in municipal advisory activities.

Municipal advisory activities means, absent the availability of an exclusion or exemption: (i) providing advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal securities, including advice with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues; or (ii) solicitation of a municipal entity or obligated person.

The Municipal Advisor Rule was implemented by the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Municipal Advisor Rule defines the fiduciary duty of Independent Registered Municipal Advisors (IRMA) to their issuer and borrower clients.  The MA Rule, MSRB Rule G-42, went into effect on June 23, 2016 and, in addition to its registration and continuing education requirements for municipal advisors, also established the core standards of conduct and duties when engaging in municipal advisory activities.

These include:

  • A standard of conduct consistent with the fiduciary duty owed by a MA to municipal entity clients, which includes a duty of care and a duty of loyalty
  • Requiring an MA to exercise due care when performing municipal advisory activities for their obligated person clients
  • As part of the municipal advisor’s “duty of care” he or she must have a reasonable basis for advice provided, representations that may be relied upon by the client or others involved in transactions and most importantly, information provided to the client or others regarding the preparation of the OS.

With the advent of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, a single firm can no longer provide both financial advice and underwriting services on the same transaction. This prohibition reflects the reality that only independent financial advisors can provide truly independent financial advice. McGuire Sponsel advises not-for-profit borrowers on the most cost-effective, yet risk-appropriate, solutions for issuing debt to finance capital projects or refinance existing debt.

Debt issuance may be the single most costly undertaking by a government or non-profit borrower during a year. Don’t you deserve to have someone on your side?  McGuire Sponsel is there to ensure our clients receive the precision and flexibility they need for effective debt financing and advisory on derivatives.

McGuire Sponsel is registered with the SEC and MSRB as a Municipal Financial Advisor.

Douglass Dalton

Douglass Dalton

As a Principal, Doug Dalton leads the Financing and Location Advisory Practices. He helps growing businesses with negotiating incentive packages and developing financing and interest rate hedging strategies. He is an Independent Registered Municipal Advisor. View Doug's bio.

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