August 2012
Inside The Advisor

MSRB Education Materials 

 

The Municipal Securities Rulemaking Board has made educational materials available on the upcoming changes to MSRB Rule G-17. This rule states in the conduct of its municipal securities or municipal advisory activities, each broker, dealer, municipal securities dealer, and municipal advisor shall deal fairly with all persons and shall not engage in any deceptive, dishonest, or unfair practice. The new requirements for underwriters, which are effective August 2, 2012, are outlined in an interpretive notice on MSRB Rule G-17.

 

The requirements include explicit and expanded requirements for underwriters aimed at protecting state and local governments that issue municipal bonds. The new rules create affirmative obligations for underwriters to ensure that municipal bond issuers have the information they need to make informed decisions. Examples of subjects addressed in MSRB Rule G-17 include a basic fair dealing principle, role of the underwriter/conflicts of interest, disclosures concerning the underwriter's role, disclosure concerning the underwriter's compensation, timing and manner of disclosures, and acknowledgement of disclosures.

 

Click on this link to view the access the educational materials on MSRB Rule G-17.    

   

Highlights from National GFOA and The Bond Buyer

by Maureen Barry,  

Financial Advisor   

   

Illinois was well represented at the National GFOA Conference in Chicago in June, as we enjoyed seeing you at our booth and at the receptions.  There were several topical items discussed at the Conference that were written about in GFOA Today, published by The Bond Buyer.  Here are some highlights of newsworthy articles that may be of interest to you.

 

Click here to continue reading.

 

Ehlers Market Commentary

 

Are you up to date with current market trends? If not, be sure to check out the Ehlers Market Commentary, which is released every other week.   

 

Be sure to sign up to receive your email copy, or read past articles here

 

We encourage you to forward The Advisor to others who may be interested or ask them to sign up to receive their own copy.

Join Our Mailing List
Follow Us on LinkedIn 

Are you a follower?

 

Being a follower isn't always a bad thing. You can get current information and network with the entire Ehlers team. Click on the logo to follow us on LinkedIn. 

 
Ehlers
550 Warrenville Road
Suite 220
Lisle, IL 60532-4311

 

Phone: 630-271-3330
Greetings!

 

In this issue of The Advisor, we're letting you know that the deadline for the November 6th Illinois General Election is approaching quickly. 

 

Also, a number of Ehlers clients have received a Municipal Derivative Antitrust Litigation notification. We take a brief look at what that means to you.

 

By way of informational resources for you, the Municipal Securities Rulemaking Board has released education materials on the upcoming Rule G-17, and we share highlights from The Bond Buyer including the recent national Government Finance Officers Association conference held in Chicago.   

 

Thanks for reading.
 

 

 

Brad Townsend         

 

President and CEO 

 

Deadline for November Election Quickly Approaching 

by Nancy Hill,
Financial Advisor
(630) 271-3343
 

The next available date to have a public question on the ballot in Illinois is the General Election on Tuesday, November 6, 2012.  The deadline for the governing board of a political subdivision to adopt a resolution or ordinance initiating a public question is Monday, August 20, 2012 - 79 days before the election.   

 

Next year, there will be two elections, the Consolidated Primary Election on Tuesday, February 26, 2013, and the Consolidated Election on Tuesday, April 9, 2013.  The deadlines for the governing board of a political subdivision to adopt a resolution or ordinance initiating a public question for these elections are Monday, December 10, 2012, and Tuesday, January 22, 2013, respectively.  After that, the next election will not be until Tuesday, March 18, 2014.

 

Although the outcome of any referendum is never guaranteed, local governments can dramatically improve their chance for success by undertaking specific strategies to identify and address potential referendum issues, solidify community support, and provide a means for effective community involvement.

 

Ehlers' provides a comprehensive and unique set of services to help your organization chart the course of your referendum.  Our services include:

  • Tax Impact Analysis.  Identifying the tax impact of the referendum on various property types and values
  • General Referendum Strategy and Management.  Identifying the strategy for involving the community in the referendum process and informing the public about the issues. 
  • Communications Strategy and Implementation.  Developing and executing a communications plan that will forecast issues, identify key messages, and provide for the appropriate communications tools and tactics
  • Surveys.  Conducting a voter survey to identify the potential success of the referendum and other important information that will have a bearing on the outcome

 

In addition, Ehlers financial advisors help ensure that the financial information associated with the referendum will be accurate, defensible, and presented in a manner that is easy to understand. 

 

Contact an Ehlers financial advisor about Ehlers' Referendum and Strategic Communications Services for your organization.

 

  

 

Municipal Derivatives Antitrust Litigation
by Steve Larson, Senior Financial Advisor 

(630) 271-3331

 

Steve Larson

A number of Ehlers clients have received a notification that has been released in the Municipal Derivatives Antitrust Litigation, which concerns the sale of municipal derivative transactions in the United States from January 1, 1992 through August 18, 2011.

Municipal derivatives are financial products used by issuers of tax-exempt municipal bonds (such as states, cities, counties, or their agencies), or by tax-exempt, non-profit private entities, to invest the money received from bond offerings while they are waiting to spend it.  Municipal derivatives come in many varieties.  Some of the more common types are:

  • Guaranteed investment contracts
  • Interest-rate swaps
  • Options
  • "Swaptions"(a combination of a swap and an option)
  • Interest-rate floors
  • Collars

The focus of the lawsuit relates to bid-rigging in the sale of municipal derivatives by several companies including Morgan Stanley, JP Morgan Chase & Co., Wachovia Bank, N.A. (Wells Fargo Bank, N.A.) and others.  Notices of this nature are often sent to any person or entity that may have been a party to the transaction(s) mentioned.  If you received this notice, it is possible that you, or an agent on your behalf, may have temporarily reinvested bond proceeds in a municipal derivatives product with one or more of these financial institutions.  A partial settlement of the class action has been reached with Morgan Stanley. There are proposed settlements regarding the sale of municipal derivatives by JP Morgan and Wells Fargo Bank N.A./Wachovia Bank, N.A.  

The lawsuit continues against the other Defendants, so please check the Municipal Derivatives Settlement website and look for further information in the mail to help you decide whether or not to participate in any claims or settlements relating to the named Defendants

 

As always, please contact an Ehlers Advisor with any questions.

 
Click here to read more about the litigation and settlements. 

footer