T 4 Flashcards
purchaser executes a close-out?
Purchase at current market value all or any part of the securities necessary to complete the transaction
Execute the close-out no earlier than the third business day following the notice of close-out
employee opening an account that can only purchase government securities or securities other then municipals
No notification or confirms needed by carrying firm.
When opening an account for an employee of another municipal securities firm, the carrying firm is required to give written notice to the employing firm only if the employee is executing transactions in municipal securities.
advertising related to OS
Any advertising regarding municipal fund securities should contain a statement that more information is available in the issuer’s official statement and if the firm is the source of the official statement, it should also be disclosed
The purchaser of a municipal security may initiate a close-out procedure no earlier tha
The purchaser of a municipal security may initiate a close-out procedure no earlier than the first business day following the settlement date
If a trade is confirmed by both parties but a discrepancy exists,
ither party may void the transaction. However, if voiding the transaction is to the dismay of either party, legal recourse may be taken. Typically, such a discrepancy will be taken to arbitration if a compromise cannot be reached.
sellers price stands unless overruled by arbitration
A municipal securities dealer operates an online data base of municipal securities based on the securities the firm holds in inventor
The suitability rules concerning these types of search engines differ in the municipal securities industry as compared to the equity securities industry. There is no central exchange trading municipal securities and the number of municipal securities is extremely large resulting in a fragmented market. Since the online database in this question is based only on the municipal securities the firm holds in inventory, the client is limited in her selection. Given these facts, the firm would be making a recommendation
Build America Bonds (BAB
BABs pay taxable interest but the Treasury will reimburse 35% of the interest paid on the bonds to the issuer, which reduces the cost of borrowing.
Note not a tax credit
Municipal securities confirmation exemption
A municipal securities dealer must maintain copies of all confirmations regarding the purchase or sale of municipal securities, as well as other notices sent to customers concerning debits and credits to customer accounts. Confirmations (and therefore records) of each transaction in municipal fund securities are not required provided the clients receive a periodic statement (and the firm maintains these records) showing the purchase or sale and investment earnings of municipal fund securities
According to MSRB rules pertaining to the reporting requirements for interdealer transactions,
They must only be reported by one side and monitored by the contraparty
reporting contributions on g-37/g-38
firms must keep records of all contributions but they only report those over $250.00
Regarding the MSRB underwriting assessment for municipal securities dealers,
The fee when applicable is $.0275 per $1,000 of face value.
The fee is payable on all maturities underwritten if the final maturity is more than nine months.
In a syndicate account the manager makes payment on behalf of the participants.
The fee is payable not more than 30 calendar days after the invoice is sent by the MSRB.
re transmittal of info from issuer
The firm must demonstrate that it has made a reasonable effort to retransmit any official communication to the beneficial owner of the securities. The firm may seek reimbursement for the costs of retransmittal concurrently with the retransmission of the information
who can supervise municipal sales to other delears
only a 53
Oftentimes, a state agency will enlist the services of a broker-dealer to market the state’s qualified tuition plans. When serving in this capacity, the firm would be known as a:
Primary distributor
The time limitation for submitting disputes to arbitration is:
6 years
If municipal bond transactions fail to compare at a registered clearing agency, the broker-dealer or municipal securities dealer submitting the transaction for comparison must reconcile the trade using procedures of the registered clearing agency or MSRB:
he broker-dealer or municipal securities dealer submitting the transaction for comparison must resolve the discrepancy as soon as possible.
A purchaser’s close-out notice may be initiated:
No earlier than one business day after the original settlement date
RTRS Time Frames
The RTRS system is in operation each business day from 7:30 a.m. to 6:30 p.m
data submission by reporting members is allowed between 7:00 a.m. and 8:00 p.m.
All nonsupervisory branch offices must be inspected
at least once every three years
what type of office does order execution
executing orders makes it an OSJ
The following descriptive information must be disclosed on a municipal securities customer confirmation
The name (portfolio) used by the issuer to identify the securities purchased by the customer in order for the client to differentiate the securities from other municipal fund securities sold by the issuer For variable rate securities, the interest rate is shown as variable. Since the interest rate is not known, the customer's first coupon payment would not be disclosed. In the case of revenue bonds, a notation of the primary source of revenue backing the bonds (project name) must be disclosed. For securities with additional credit backing (insured or letter of credit), the name of the company and/or bank that is obligated to make payments must be disclosed.
In the case of an agency order on behalf of a joint account the order ticket
The date and time of receipt of the order
The price of execution of the order
The name and address of the person entering the order
If a dealer solicits business and the transactions bill be executed by another dealer
If a primary dealer solicits municipal fund securities business that will be effected by another dealer, the other dealer must also be indicated in any promotional ads
A syndicate manager offering municipal notes is required to confirm a sale to a dealer in which Situation
A syndicate manager is required to confirm the sale of municipal securities to either a syndicate member or to the dealer that submitted a related portfolio order, an order for a municipal securities unit investment trust, or an order for an accumulation account established for a municipal securities investment trust. An investment portfolio of a dealer (whether or not they are a member of a syndicate) is an example of a related portfolio. Although all customers purchasing municipals will receive a confirmation, MSRB Rule G-11 requires the syndicate manager to confirm the sales of these types of orders to the dealer placing the order.
broker to broker transactions
confirmation delivery
The trade confirmation must be sent on the trade date
issuer prepared OS
Delivery Requirements
When an official statement in final form is prepared by or on behalf of an issuer, the managing underwriter, upon request, is required to provide copies to any dealer that has purchased the securities. The managing underwriter is required to send one copy plus one additional copy per $100,000 par value of the securities purchased by the dealer. In addition, information and instructions must be provided on how to order additional copies directly from the printer.
The latest date a close-out can be completed is:
The last date a close-out can be completed is normally 10 calendar days after settlement, unless the buyer extends for an additional 10 calendar days, which allows for it to occur 20 calendar days after settlement
nonbranch locations should be reviewed
periodically
brokers broker
Bids in error
If the bid is outside the parameters no permission is needed to contact the bidder.
If the bid is inside the parameters but believed to be made in error then permission is needed to contact the seller.
