Agenda - 09-20-1994 - Laserfiche WebLink

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S �'- ° c*tat�e I1:f 1"art11 Carolina t orar zxn #801 p e artmEnt Of (*tat.e Treasurer • HARLAN E. BOYLES State and Local Government Finance Division ROBERT M. HIGH TREASURER and the Local Government Commission DEPUTY TREASURER • • July 8, 1994 ) )IORANDUM TO: Locally Elected Officials FROM: Robert M. High 1 SUBJECT: Rule G-37 The Municipal Securities Rule Making Board ( "MSRB" ) with the approval of the Securities and Exchange Commission ( "SEC" ) has adopted Rule G-37 which became effective April 25, 1994 setting out campaign financing rules which, if not followed, could have a significant adverse impact upon the issuance and the cost of borrowing by all agencies of government, both state and local. Rule G-37 is directed toward municipal underwriters, banks ( generally, the officers designated by the bank's board of directors as responsible for the day-to-day conduct of the bank' s municipal securities dealer activities and any member of the separately identifiable department or division of the bank dealer) and other municipal finance professionals and .dealers. 'The Rule prohibits these institutions and persons from engaging in any securities business with any government within two years after a campaign contribution is made to a candidate or office holder of such government who directly or indirectly could influence the award of municipal bond business . Rule G-37 is detailed and complex as to the meaning of a dealer, a municipal finance professional , an associated person, an official of an issuer whose office is responsible for or can influence the outcome of the hiring of a dealer for municipal securities business and other definitional terms and terms of application and jurisdiction. In fact, on May 24 , the MSRB asked the SEC to approve several amendments to Rule G-37 covering such matters as protecting firms that make good faith efforts to comply with the Rule from being penalized for isolated violations by employees, making clear that the Rule does not cover the public sale of bonds by competitive sale as opposed to negotiated sale and also making clear that contributions to an incumbent or candidate for governor are covered by the Rule, assuming the governor has authority to appoint boards that determine bond issuance. The amendments proposed by the MSRB were approved by the SEC on June 3 . 325 North Salisbury Street, Raleigh, North Carolina 27609-1388 (919) 733-3064 (FAX 733-9586) An Equal Opportunity/Affirmative Action Employer