Municipal Advisory Services and Status
This is serious stuff, so please read carefully. To comply with federal laws and industry practices, NBS Government Finance Group (“NBS”) is registered with the Securities and Exchange Commission (“SEC”) and the Municipal Securities Rulemaking Board (“MSRB”) as a Municipal Advisor (MA). Only certain projects and efforts NBS undertakes are covered under the MA rules, and most of NBS’ projects are not subject to these rules. MA-related projects will include services such as Community Facilities District consulting or Assessment District formations where a municipal security will be involved.
Not all NBS staff are individually registered as Municipal Advisors. A non-municipal advisor employee at NBS may be included in physical and electronic communications, including emails. This is for administrative and educational purposes only.
Specific Disclosures Related to Municipal Advisory Status
Pursuant to the MSRB Rule G-10 on Investor and Municipal Advisory Client Education and Protection, Municipal Advisors are required to provide certain written information to their municipal entity and obligated person clients which include the following:
- NBS is currently registered as an MA with the U.S. SEC and the MSRB.
- Within the MSRB website at msrb.org, an agency may obtain the Municipal Advisory client brochure that is posted on the MSRB website. The brochure describes the protections that may be provided by the MSRB Rules along with how to file a complaint with financial regulatory authorities.
Pursuant to the MSRB Rule G-42 on Duties of Non-Solicitor Municipal Advisors, Municipal Advisors are required to make certain written disclosures to clients and potential clients which include, amongst other things, Conflicts of Interest and any Legal or Disciplinary events of NBS and its associated persons.
Conflicts of Interest
Compensation
NBS represents that in connection with the issuance of municipal securities, NBS may receive compensation from an Issuer or Obligated Person for services rendered. Any such compensation may be contingent upon the successful closing of a transaction and/or is based on the size of a transaction. Consistent with the requirements of MSRB Rule G-42, NBS hereby discloses that such contingent and/or transactional compensation may present a potential conflict of interest regarding NBS’ ability to provide unbiased advice to enter into such transaction. This conflict of interest does not impair NBS’ ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Issuer.
It should be noted that other forms of compensation (i.e., hourly or fixed-fee based) may also present a potential conflict of interest regarding NBS’ ability to provide advice regarding a municipal security transaction. These other potential conflicts of interest will not impair NBS’ ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Issuer.
The fee paid to NBS increases the cost of investment to a public agency. The increased cost occurs from compensating NBS for the municipal advisory services provided.
Other Municipal Advisor Relationships
NBS serves a wide variety of other clients that may from time to time have interests that could have a direct or indirect impact on the interests of another NBS client. For example, NBS serves as Municipal Advisor to other municipal advisory clients and, in such cases, owes a regulatory duty to both clients. These other clients may, from time to time and depending on the specific circumstances, have competing interests. In acting in the interests of its various clients, NBS could potentially face a conflict of interest arising from these competing client interests. NBS fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith with any agency.
If NBS becomes aware of any additional potential or actual conflict of interest after this disclosure, NBS will disclose the detailed information in writing to the issuer or obligated person in a timely manner.
Legal or Disciplinary Events
NBS does not have any legal events or disciplinary history on NBS’ Form MA and Form MA-I, which includes information about any criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations, and civil litigation. Any Issuer may electronically access NBS’ most recent Form MA and each most recent Form MA-I filed with the Commission at the following website: www.sec.gov/edgar/searchedgar/companysearch.html
There have been no material changes to a legal or disciplinary event disclosure on any Form MA or Form MA-I filed with the SEC. If any material legal or regulatory action is brought against NBS, NBS will provide complete disclosure to any Issuer in detail allowing the Issuer to evaluate NBS, its management and personnel.