The BDA filed comments with the SEC criticizing the proposal because it will tend to confuse both underwriters and issuers on the role of the underwriter. Earlier this year, the SEC and the MSRB decided under Rule G-23 that underwriters and issuers were counterparties with differing interests. This interpretive guidance would blur that line. In addition, the guidance would require underwriters to make disclosures based not on what underwriters could reasonably believe about the knowledge and experience of issuer personnel, but rather on the actual knowledge of issuer personnel, something the underwriter cannot know. The guidance also used terms that need clarification. It would also overlap with unfinished regulations of the SEC and CFTC concerning swap advisors. The BDA comments are available here.
