What does the municipal advisor owe to the issuer according to the Dodd-Frank Act?

The Dodd-Frank Act establishes specific obligations for municipal advisors to ensure that they act in the best interests of the issuers they serve. Among these obligations are the duty of care and the duty of loyalty.

The duty of care requires municipal advisors to provide advice based on thorough knowledge and expertise, ensuring that the guidance they offer is suitable and relevant to the issuer's needs and circumstances. This means that advisors must exercise due diligence in their recommendations and consider a variety of factors that may affect the issuer’s financial decisions.

The duty of loyalty mandates that municipal advisors put the interests of the issuer ahead of their own. This involves avoiding conflicts of interest and ensuring that any potential influence from third parties does not compromise the quality of advice given to the issuer. By prioritizing the issuer's needs and maintaining transparency about any potential conflicts, municipal advisors help to foster a trusting relationship.

In contrast, while duties such as the duty to inform, duty of confidentiality, and duty of transparency may also play roles in the adviser-issuer relationship, the core legal obligations outlined by the Dodd-Frank Act specifically emphasize the duty of care and duty of loyalty as central to the advisor's responsibilities. These duties delineate a framework for ethical and effective advising, ensuring that advisors