La. Admin. Code tit. 71 § III-1301

Current through Register Vol. 50, No. 11, November 20, 2024

Section III-1301 - Disclosure of Agreements between Financial Professionals for Negotiated Transactions

A. The duties of the Bond Commission (the "commission") require that it choose financial professionals (including, without limitation, firms of underwriters, financial advisors, and bond attorneys) in connection with certain bond issues and the commission predicates such choices upon the competing firms' experience, qualifications, and performance, in order that a broad spectrum of firms including minority and women-owned and regional firms are given an opportunity to actively and fully participate in such financings.

B. The commission's duties also require that it approve applications from local governmental entities to issue bonds and such applications include information on the financial professionals involved in handling the issues.

C. In order to insure the integrity of the structure of the financing team which the commission is charged with the responsibility of choosing and/or approving for handling bond issues, the commission hereby amends the following rule regarding agreements by and between such financial professionals as to the sale of such bonds.

1. Terms and/or existence of all joint accounts and/or any other fee-splitting arrangements by and between financial professionals must be disclosed and approved by the commission.

2. For bond issues for which the commission is charged with the responsibility to choose the financial professionals, the following will apply.

a. Firms under consideration for selection by the commission must file a disclosure statement to be submitted as part of their proposal (whether such proposal is solicited or unsolicited), listing any and all agreements by and between themselves and any other financial professionals which relate to the bond issue.

b. Financial professionals must include, in any proposal submitted to the commission, the name or names of any person or firm, including attorneys, lobbyists, and public relations professionals engaged to promote the selection of the particular financial entity.

c. Joint proposals from financial professionals will be allowed only if the commission's solicitation for offers requests and/or permits joint proposals. The commission reserves the right, in its sole discretion, to decide on an issue-by-issue basis whether joint proposals will be permitted.

d. All financial professionals submitting joint proposals and/or intending to enter into joint accounts or any fee-splitting arrangements in connection with a bond issue must fully disclose and have approved by the commission any plan or arrangement to share tasks, responsibilities, and fees earned, and disclose the financing professionals with whom this sharing is proposed, and any changes thereto which may occur.

e. The Agreement Among Underwriters will govern all transactions during the underwriting period and such agreement must be disclosed and filed with the commission.

f. No later than 45 days following the bond sale, all participating underwriters must file with the commission in notarized affidavit form individual post-sale reports which include a full accounting for all bonds sold and all commissions earned, and any other compensation paid or earned in connection with such sale.

3. Failure to comply with any of the provisions of Section 1 of this rule may result in a firm's immediate dismissal, disqualification from later issues, or other penalties as may be provided by law or the rules, policies, and procedures of the commission as the commission, in its sole discretion, may deem appropriate.

4. For those bond issues which the commission must approve but for which the commission is not responsible for the choice of the financial professionals, the following will apply.

a. The details of any arrangements for compensation of all the financial professionals in the transaction (including any joint accounts or fee-splitting agreements) and the method used to calculate the fees to be earned must be provided to the commission in the written application. The commission's receipt of this information is a prerequisite for being placed on the agenda.

b. At closing, this information must be certified in notarized affidavit form by the financial professional to be correct and filed with the Bond Commission within five days thereof. This information will form a part of the public original record of the bond issue.

La. Admin. Code tit. 71, § III-1301

Promulgated by the Department of the Treasury, Bond Commission, LR 20:320 (March 1994), amended LR 27:1706 (October 2001).

AUTHORITY NOTE: Promulgated in accordance with R.S. 49:950 et seq.