The U.S. Securities and Exchange Commission’s Office of Municipal Securities issued a nonbinding staff statement explaining how federal securities laws apply when municipal advisors help prepare primary or secondary market disclosure documents. Participation constitutes municipal advisory activity when it falls within the advisor’s relationship with a municipal entity or obligated person and involves particularized advice. Purely clerical compilation may fall outside that definition, but selecting information, resolving inconsistencies or deciding which substantive comments to accept may amount to advice. The scope of an advisor’s responsibilities depends on both its agreement and its actual conduct. Activities beyond a written mandate can expand the relationship and the related fiduciary duty to a municipal entity or duties of care and fair dealing to an obligated person. Municipal advisors remain subject to general and municipal advisor specific antifraud provisions regardless of contractual exclusions, and may face primary or secondary liability based on their role, knowledge and conduct. Liability disclaimers cannot waive antifraud exposure, while advisors taking a prominent disclosure role in a competitive sale may have greater responsibility to examine accuracy and completeness because no underwriter may be in place when the document is prepared. The staff advises municipal advisors to define their disclosure role precisely, update agreements when that role changes, make inquiries proportionate to their responsibilities and maintain compliance policies for disclosure work. The statement has no legal force, changes no applicable law and creates no new obligations.
2026-09-17U.S. Securities & Exchange Commission
U.S. Securities and Exchange Commission staff clarifies municipal advisors’ disclosure duties and antifraud exposure
U.S. Securities and Exchange Commission staff clarified how municipal advisors’ roles in preparing municipal securities disclosures can trigger advisory duties and antifraud exposure. Written agreements do not control where actual conduct expands an advisor’s role, and liability disclaimers cannot waive antifraud responsibility. Advisors should document and update their responsibilities, conduct appropriate accuracy and completeness inquiries, and maintain relevant compliance procedures.