Bond Accountability Commission 2 Recommendations Page 43
evaluation, it is appropriate for CMSD to consider the quality of services, and not merely the levels of fees. We recommend that CMSD consider the potential for broader utilization of its Bond Counsel outside the narrow confines of planning for and conducting securities offerings, especially regarding post-issuance tax and securities law compliance (such as filings with the MSRB’s EMMA website of continuing disclosure notices and supplementary information), compliance with Bond and Note documentary requirements, working with State agencies, establishment of an investor relations program, use of CMSD’s website as an integral element in an investor relations program, and potentially accepting one or more of the incentives offered by the MSRB. We recommend that CMSD’s Financial Advisors and Bond Counsel not be compensated on the basis of contingent fees that are payable only at the closing of a transaction or on the basis of fees that vary according to the size of a transaction.43 Rather, we recommend that each of the Financial Advisors and Bond Counsel be paid according to the time and effort involved in their respective work. In addition to removing potential conflicts of interest, a different fee structure would allow CMSD to seek advice on a continuing basis on a wider range of issues, not merely securities offerings. In addition, municipal securities market regulation may affect the roles and responsibilities assigned to CMSD’s Financial Advisors and Bond Counsel. We recommend that CMSD monitor regulatory developments with that in mind. 43
We recognize that securities transactions carry liability risks. Accordingly, there may be fee differentials according to the nature of services provided.