MSRB Rules

Question 1

What can the MSRB do, and not do?

Answer 1

The MSRB CREATES rules for municipal firms. They do NOT:

• Regulate issuers
• Enforce the rules that it creates

Question 2

Who enforces the MSRB rules for banks?

Answer 2

• Federal reserve
• FDIC
• OCC

Question 3

What is the municipal securities principal’s obligations?

Answer 3

They are directly engaged in management, and perform overall supervision. They must pass the Series 52.

Question 4

What is the municipal securities representative’s obligations?

Answer 4

Person that is not a principal, their responsibilities include:

• Underwriting, trading, and ales
• Research investment advice
• financial advisory and consulting

Question 5

How long does a person have to pass the Series 52 before they are fired by a Municipal dealer?

Answer 5

180 days after associating

Question 6

Who must perform overall muni dealer supervision?

Answer 6

Municipal #53 principal

Question 7

What must be kept in each office of an MSRB firm?

Answer 7

A copy of the MSRB Manual

Question 8

Can a financial adviser act as an underwriter in the issue of a municipal offering?

Answer 8

No - it does not matter if it is competitive or negotiated

Question 9

When is a new issue disclosure required to be sent to the customer with the Final official statement?

Answer 9

If it is prepared by the issuer. If final version is not ready, or won’t be prepared in final form a notice that no official statement is being prepared must be sent

Question 10

When is the spread on Municipal offerings disclosed?

Answer 10

On NEGOTIATED offerings

Question 11

When is the spread on municipal offerings NOT required to be disclosed?

Answer 11

On COMPETITIVE bid issues (since the spreads are so narrow)

Question 12

What must be sent to the customer when a complaint regarding a municipal investment is received?

Answer 12

An Investment Brochure must be sent to the customer

Question 13

How long must complaints to municipal dealers be retained per the MSRB?

Answer 13

Muni complaints must be retained for 6 years

Question 14

How many quotes can a joint account publish?

Answer 14

ONLY ONE

Question 15

What is the order in which municipal syndicates must fill orders?

Answer 15

PGDM

• Pre sale
• Group net
• Designated
• Member

Question 16

For which type of muni. order must the identify of the customer for whom the order is filled be disclosed to the manager?

Answer 16

Group net orders

Question 17

Which type of muni. order designates that one syndicate member receives extra profit allocation to complete sale of the issue?

Answer 17

Designated net orders

Question 18

What is a member takedown order?

Answer 18

These are any bonds that remain that manager confirms as unsold to syndicate members

Question 19

What must the manager disclose to syndicate once the syndicate is settled?

Answer 19

• Syndicate expenses
• Identity and size of portfolio
• Group order
• Aggregate value and price of securities sold

Question 20

What does the MSRB consider advertisements?

Answer 20

Notice, circulars, and abstracts

Question 21

How long are MSRB advertisements retained?

Answer 21

4 years

Question 22

What yields can be shown on a municipal advertisement?

Answer 22

They can show yields that change if the date is shown on the advertisement. If it shows yields, it should state that Yield to Maturity or Yield to call

Question 23

What must be included on municipal bond advertisements?

Answer 23

A statement that the securities may already be “sold out” or unavailable

Question 24

What is the max amount for contributions made to elected officials by municipal firms?

Answer 24

$250 dollars

Question 25

What is EMMA?

Answer 25

Electronic Municipal Market Access:

• Created by MSRB for retail customers
• Gives access to muni disclosure docs and price reporting for free

Question 26

What information can be found on EMMA?

Answer 26

• Official statements for new muni issues (includes 529s)
• pre funded bond info
• real time price and yields