Chapter 06 : Rules of the MSRB Flashcards
Who supervises a firm’s municipal activities and provides account approval, transaction review, and complaint handling?
Municipal Securities Principal (Series 53)
A BD that holds a customer’s cash and securities is known as a ______________.
A BD that holds a customer’s cash and securities is known as a carrying firm.
An RR receives a text message from a client who is upset, is this considered a written complaint?
Yes
A political contribution is made by the spouse of an MFP of a municipal securities BD. Is this covered under Rule G-37?
No. Provided the contribution was not directed by the MFP, it is not covered under Rule G-37.
What is the disclosure document, similar to a prospectus, that is used for municipal bonds?
Official Statement
Name some of the different items found on a customer confirmation.
Description, amount, purchase/sale, execution price, trade/settlement date, BD capacity, commission (on agency)
How is interest on municipal bonds treated for tax purposes?
Federally tax-exempt, but may be subject to state and local tax
What is created when a BD employee has influence over the debt service of an issuer (e.g., an employee is a mayor)?
Control relationship
If a control relationship exists, how may the relationship be disclosed?
Orally, before a trade, and then in writing, at or before settlement
Political contribution rules allow MFPs NOT able to vote for a candidate to contribute a max. of $___ (per election).
Political contribution rules allow MFPs NOT able to vote for a candidate to contribute a max. of $0 (per election).
An MFP gives an excessive campaign contribution and as a result is fired. Does this eliminate the u/w ban to the firm?
No, dismissing employees for violating the political contribution rule does NOT eliminate the 2 year ban on the firm.
Does the MSRB have the authority to enforce its own rules?
No. The MSRB has no enforcement authority.
A municipal firm considering hiring an MFP would look at contributions he had given in the last ___ years .
A municipal firm considering hiring an MFP would look at contributions they had given in the last 2 years.
A non-MFP officer has made a political contribution. May the firm engage in municipal business with the issuer?
Yes. Business is only prohibited if the contribution is made by the firm, its MFPs, or any PAC controlled by the firm.
When do corporate bond trades settle?
T + 2 (two business days after the trade date)
Is it mandatory for a municipal issuer to prepare an Official Statement?
No, but if one has been prepared, the MSRB requires BDs to distribute it.
A BD that does not hold a customer’s cash or securities is known as a _____________.
A BD that does not hold a customer’s cash or securities is known as a non-carrying firm.
What is an MFP?
Municipal Finance Professional (those subject to political contribution rules)
If an MFP makes the maximum contribution to a losing candidate, may she make a contribution to defray expenses?
Yes. MFPs are NOT subject to contribution limits to defray expenses.
True or False: Political contributions made to defray inaugural expenses may be deemed a violation of the rules.
True
Series ____ or Series _____ will qualify an individual to sell municipal securities.
Series 7 or Series 52 will qualify an individual to sell municipal securities.
How often is Form G37 filed with the MSRB?
Quarterly to list all political contributions
How does G-37 treat a check signed by an MFP from a joint account and submitted as a contribution to an issuer official?
G-37 considers the full contribution to have been made by the MFP.
$_____ is the MSRB gift rule limitation.
$100 is the MSRB gift rule limitation (same as FINRA).
