WASHINGTON – The Securities Industry and Financial Markets Association’s municipal securities division is updating its Master Agreement Among Underwriters document and providing a new hosting service for it that should save time for underwriters entering into a syndicate.

Leslie Norwood, associate general counsel, managing director, and co-head of munis at SIFMA, spoke to The Bond Buyer about the new document and service on Friday, ahead of its July 16 launch.

SIFMA's MAAU is a nearly ubiquitous master contract designed to govern the relationships of underwriting syndicate members in municipal securities transactions.

Currently, it is necessary for muni syndicate members or others involved in a muni issuance to verify that other firms in the syndicate have executed the 2002 edition of the MAAU, which Norwood said can be a time-consuming process.

If the firms have not executed the 2002 MAAU with each other, then they either need to do so or execute the 1997 version of the SIFMA MAAU on a transaction-by-transaction basis.

SIFMA's Leslie Norwood
SIFMA's Leslie Norwood

“We haven’t done a new agreement among underwriters in 16 years, and things have changed,” Norwood said, noting new Municipal Securities Rulemaking Board guidance in its Rule G-17 as well as new issue price rules from the Treasury and Internal Revenue Service last year. There are currently riders that have to be added into the older documents to address those changes.

The new document will have all those riders built in, Norwood said, and SIFMA will now store letters from firms that have accepted the new MAAU and maintain the list of those firms on its website.

This will allow syndicate members to quickly and easily determine what other firms have accepted the terms of the 2018 MAAU.

“When multiplied by the number of deals using the MAAU, this results in significant time savings for dealers and greater efficiency when executing deals,” Norwood said.

There will be no charge to access the list of firms and it will be available to the public, but there is a fee of $1,000 per acceptance letter for firms wishing to submit one. The fee covers storage of the 2018 MAAU acceptance letter for as long as that version of the 2018 MAAU is in use, and is intended to offset SIFMA’s legal costs related to the document. There is no charge to withdraw that acceptance letter.

Only SIFMA staff will have access to electronic copies of the actual signed acceptance letters.

SIFMA will begin accepting signatures for the new MAAU on July 16, but the 2018 master agreement will not supersede the 2002 edition until Sept. 4.

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