by Dave Wagner, Financial Advisor
|
Ehlers has been an independent financial advisor for more than 55 years and is one of the founding members of the National Association of Public Finance Advisors ("NAIPFA"). As such, Ehlers has been committed to the principal of fiduciary duty to its municipal clients for its entire history. The Dodd-Frank Act requires a "Municipal Advisor" rendering financial advice to represent only the interests of the municipality. Ehlers has voluntarily and absolutely abstained from representing the buyers of municipal bonds and also from being compensated directly or indirectly by bond buyers. Ehlers only represents the issuer who has fundamentally different objectives than the underwriter.
With the passage of the Dodd-Frank Act and the oversight of the Securities and Exchange Commission ("SEC"), the Municipal Securities Rulemaking Board ("MSRB") has revised and strengthened its Rule G-23, requiring that all players (specifically investment banks and commercial banks together with their representatives) must now register with the SEC as Municipal Advisors and beginning November, 2011 adhere to the new Rule G-23. In essence the new Rule G-23 says that a Municipal Advisor working for an issuer cannot also act as an underwriter of debt for that municipality and must avoid all similar conflicts of interest.
Ehlers welcomes this registration as a means of extending the same concept of unbiased advice to all those offering financial advice to municipalities. Ehlers registered as a Municipal Advisor on October 1, 2010 (click here to see registration).
We understand Municipal Advisor firms must comply with testing and continuing education requirements that will be forthcoming in 2012. In summary, Ehlers believes that Dodd-Frank and G-23 now formally reflect the philosophy we have been committed to for our entire history.