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Public Finance Attorneys

Jeffrey E. Fine
Kraig M. Kohring
Dana M. Lach
Lauren K. Mack
John D. Petersen
Lisa Greer Quateman
Timothy J. Reimers
Douglas S. Stone
Jessica Jacob Zaiger
Janet E. Zeigler

Dan Flanigan
Practice Area Chair


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May 2012


Municipal Securities Rulemaking Board interprets Rule G-17; Municipal Issuers Could be Affected


On February 7, 2012 the Municipal Securities Rulemaking Board (MSRB) issued a draft interpretive notice (Draft Notice) regarding Rule G-17. In the Draft Notice the MSRB interpreted Rule G-17 to provide that it is unlawful for an underwriter to consent to amendments to an authorizing document providing security for outstanding bonds, if any such amendment would reduce the security for owners of the outstanding bonds, unless certain specific circumstances existed. These specific exceptions include where:

  • The authorizing document expressly provided that an underwriter could provide bondholder consent; and
  • The offering documents for the outstanding securities expressly disclosed that bondholder consents could be provided by underwriters of securities subsequently issued under the authorizing document.

Why This is Important

The Draft Notice, if filed and approved, could adversely affect municipal issuers and obligated persons and in many instances, impair their rights under their existing bond documents. Based on the MSRB’s interpretation, Rule G-17 could be read to proscribe a broad range of routine and long accepted practices in the municipal securities marketplace to the detriment of municipal issuers and obligated persons.

Timothy J. Reimers, a team leader in Polsinelli Shughart’s Public Finance practice group, worked with the National Association of Bond Lawyers’ Municipal Law Committee to prepare comments in response to MSRB’s Draft Notice in support of NABL’s recommendation that the Notice not be filed for approval in the form issued on February 7, 2012. A copy of the Draft Notice and the comments are available at the following links:

For More Information:

If you have questions about how this notice might affect your business, please feel free to contact our Public Finance team Leaders:


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