WASHINGTON — The Municipal Securities Rulemaking Board on Thursday released a new draft rule that would govern the conduct of municipal advisors, alarming broker-dealers who fear a prohibition on business outside of an advisory relationship with an issuer could push dealer-affiliated MAs out of the market.

The draft Rule G-42, called "Duties of Non-Solicitor Municipal Advisors," codifies the language of the Dodd-Frank Act, which imposes a fiduciary duty on MA's to put their client's interest first before their own. The draft rule says MAs owe both a duty of loyalty and a duty of care to their municipal entity clients.

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