WASHINGTON — Certain muni transaction-related services should only be performed by municipal advisors, not by underwriters, an independent financial advisor group told the Securities and Exchange Commission Wednesday.

In a rebuke to the Municipal Securities Rulemaking Board, which recently took a contrary view, the National Association of Independent Public Finance Advisors identified a range of activities that, "if not able to be handled by qualified issuer staff, should be performed exclusively by municipal advisors," wrote Colette Irwin-Knott, NAIPFA's president and a partner at H.J. Umbaugh & Associates LLP in Indianapolis.

Such services include: advising issuers about the method of sale for a particular transaction, taking into account market conditions and other factors; helping issuers with the selection of underwriters; dealing with issues related to underwriter compensation; determining syndicate structure and bond allocations; helping issuers with negotiated sales, including advice relating to the structure, timing and terms of a muni security issuance; and assisting issuers with competitive bond sales, including bid verification.

NAIPFA's remarks come less than a month after the MSRB told the SEC that many transaction-related services could appropriately be performed by underwriters.

The board's Nov. 9 letter to SEC chairman Mary Schapiro, signed by MSRB chairman Alan Polsky, senior vice president at Dougherty & Co. in Minneapolis, contained a two-page, single-spaced list of "traditional municipal advisory services," including strategic services, transaction-related services, derivatives services and post-issuance services.

When many of these activities, including transaction-related services, are "integrally related" to the underwriters' professional responsibilities as underwriters, the MSRB said, such conduct would be exempt from the Dodd-Frank law's muni advisor definition, meaning the underwriters would not need to register with the SEC and the board and become subject to a fiduciary duty.

In general, a fiduciary must put a client's interests ahead of its own.

Irwin-Knott wrote that the board's list was a "fair representation" of muni advisory services, but some "clarification" was necessary.

The SEC is working to finalize a municipal advisor registration scheme and definition, slated for release by the end of the month, according to the commission's website.

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