KEY CHARTER ADVISORS, LLC

Key Charter Advisors, LLC (KCA) is a registered municipal advisor with the Municipal Securities Rulemaking Board and Securities and Exchange Commission. KCA is an Independent Registered Municipal Advisor (“IRMA”) for purposes of the SEC rules regarding the registration of municipal advisors. KCA is independent of any firm, including any broker dealer, underwriter, or any other firm, and KCA does not provide underwriting services. No KCA representative has worked for a broker dealer within the past ten years.

 

RULE G-42: DUTIES OF NON-SOLICITOR MUNICIPAL ADVISORS

 

Municipal Securities Rulemaking Board ("MSRB") Rule G-42 establishes core standards of conduct for municipal advisors engaging in municipal advisory activities. A municipal advisor engaging in municipal advisory activities on behalf of a municipal entity or obligated person client (“client”) is subject to a fiduciary duty under Rule G-42, which includes a duty of care and a duty of loyalty. This specific obligation requires the municipal advisor to forgo engaging in municipal advisory activities on behalf of a client if it cannot manage or mitigate its conflicts of interest in a manner that will permit it to act in the client’s best interest. A municipal advisor must also undertake a reasonable investigation to determine that it is not basing any recommendation on materially inaccurate or incomplete information.

 

A municipal advisor has a duty, prior to or upon engaging in municipal advisory activities, to make a written disclosure to its client any known material, actual or potential conflicts of interest that could reasonably be anticipated to impair the municipal advisor’s ability to provide advice to, or on behalf of, the client. Such disclosure also must include an explanation of how the municipal advisor addresses or intends to manage or mitigate each conflict. A municipal advisor must also provide the client, prior to or upon engaging in municipal advisory activities, written disclosure of any legal or disciplinary event that is material to the client’s evaluation of the municipal advisor or the integrity of its management or advisory personnel. The following disclosures are made with respect to KCA and its associated persons.

 

Material Conflicts of Interest and Other Information:

 

• KCA is independently owned and has no affiliates that provide any advice, service, or product to or on behalf of the client that is directly related to the municipal advisory activities to be performed by KCA.
• KCA has not made payments, directly or indirectly, to obtain or retain an engagement to perform municipal advisory activities for the client.
• KCA has not received any payments from a third party to enlist any recommendation to the client of its services, any municipal securities transaction or any municipal financial product.
• KCA has no fee-splitting arrangements with any provider of investments or services to be provided to the client except when we act as a co-advisor on a project or transaction. In cases where KCA is a co-advisor on a project or transaction, fees paid to each participating firm are disclosed to and approved by the client prior to engaging in any work on the project or transaction. Accordingly, such fee arrangement does not present a conflict of interest to the client.
• In certain cases, KCA may provide a client or obligated person with services to be performed for which compensation is contingent on the size or closing of a transaction which may present a potential conflict of interest and impair our ability to provide unbiased advice to or on behalf of the client. This potential conflict of interest will not impair KCA's ability to render unbiased and competent advice to or on behalf of the client or to fulfill our fiduciary duty to the client.

• Karl Yoder, Managing Partner of KCA, is the Chief Financial Officer of Delta Managed Solutions, Inc. (DMS), a California backoffice services provider, but is not a DMS employee. KCA does not pay to or receive compensation from DMS in relation to any solicitation of municipal advisory or other services.

• KCA has no other known material conflicts of interest. KCA will disclose in writing in a timely manner to the client any additional potential or actual conflicts of interest that arise after this disclosure.
• Legal or Disciplinary Events: KCA has never been subject to any legal, disciplinary or regulatory actions. Clients may electronically access KCA's most recent Form MA and Karl Yoder's Form MA-l filed with the U.S. Securities and Exchange Commission (“SEC”) here. 

 

Regulatory Duties When Servicing Client: MSRB Rule G-42 requires a municipal advisor to make a reasonable inquiry as to the facts that are relevant to a client’s determination whether to proceed with a course of action or that form the basis for and advice provided by the municipal advisor to the client. The rule also requires that the municipal advisor undertake a reasonable investigation to determine that it is not basing any recommendation on materially inaccurate or incomplete information. The municipal advisor is also required under the rule to use reasonable diligence, to know the essential facts about the client, and the authority of each person acting on the client’s behalf.

 

Each client agrees to cooperate, and to cause its agents to cooperate, with KCA in carrying out these regulatory duties, including providing to KCA accurate and complete information and reasonable access to relevant documents, other information and personnel needed to fulfill such duties. In addition, each client agrees that, to the extent the client seeks to have KCA provide advice with regard to any recommendation made by a third party, the client will provide to KCA written direction to do so as well as any information it has received from such third party relating to its recommendation.

 

RULE G-10: INVESTOR AND MUNICIPAL ADVISORY CLIENT EDUCATION AND PROTECTION

 

Pursuant to MSRB Rule G-10, each municipal advisor shall promptly provide in writing (which may be electronic) to the client upon engagement and at least annually thereafter during the term of engagement the following information:

 

• Key Charter Advisors, LLC (KCA) is a registered municipal advisor with the Municipal Securities Rulemaking Board and Securities and Exchange Commission. KCA is an Independent Registered Municipal Advisor (“IRMA”) for purposes of the SEC rules regarding the registration of municipal advisors. KCA is independent of any firm, including any broker dealer, underwriter, or any other firm, and KCA does not provide underwriting services. None of our associated individuals have worked for a broker dealer within the past ten years.
• Clients may obtain a municipal advisory client brochure that is posted on the MSRB website at http://www.msrb.org/.

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RULE G-37: POLITICAL CONTRIBUTIONS AND PROHIBITIONS ON MUNICIPAL SECURITIES BUSINESS AND MUNICIPAL ADVISORY BUSINESS

 

MSRB Rule G-37 prohibits municipal advisors from engaging in municipal advisory business with clients if certain political contributions have been made to officials of such municipal entities and requires municipal advisors to disclose certain political contributions, as well as other information, to allow public scrutiny of such political contributions and the municipal advisory business of municipal advisors. Per KCA's policies, employees of the firm are prohibited from making direct or indirect political contributions.

 

RULE G-20: GIFTS, GRATUITIES, NON-CASH COMPENSATION AND EXPENSES OF ISSUANCE

 

MSRB Rule G-20 protects against improprieties and conflicts of interest that may arise when a municipal advisor or its associated persons give gifts or gratuities in relation to the municipal advisory activities of the recipients’ employers. Per KCAs policies, employees of the firm are prohibited from giving direct or indirect gifts or gratuities in relation to the municipal advisory activities of the firm.

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