Master Agreement Among Underwriters Completed

Work has been completed on two new master agreements for use by managers of negotiated offerings of municipal securities, underwriters and members of a selling group. The Master Agreement Among Underwriters (Master AAU) and the Master Selling Group Agreement (Master SGA) are designed to reduce the administration and compliance burden faced by securities firms and improve documentation in the municipal securities markets.

    Use of the new agreements will alleviate the need for numerous rounds of written communication between dealers, thus saving time and reducing processing costs. As with the Association’s Master Competitive Agreement Among Underwriters, each document will have to be signed only once; for any subsequent deals on which the underwriters work together, all communications can occur electronically. In addition, the current agreement among underwriters and the selling group agreements used by individual firms for each transaction would be replaced by one Master AAU and a Master SGA.

    Other modifications include the addition of language in Part I of the Master AAU intended to clarify an underwriter’s liability and obligations; Part IV has been clarified to allow electronic delivery of both preliminary offering statements and offering statements to the extent permitted by MSRB and SEC rules.

    Copies of the agreements are available on the Association’s Web site.

    The agreement should be executed with the firms over the next several months. The Association is anticipating a January 1, 2003, launch.

    For more information, contact Lynnette Hotchkiss, Senior Vice President and Associate General Counsel, at 212.440.9407.

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