General Characteristics of Municipal Securities
Chapters in this video
- 0:00 What a municipal security is and who issues it
- 1:04 The SEC registration exemption versus anti-fraud rules
- 2:25 Quotation methods: yield basis and dollar price
- 3:48 Par value, minimum denomination, and dollar price math
- 5:17 Serial, term, and balloon maturity structures
- 7:05 Legal opinion coverage and ex-legal bonds
- 8:11 Rapid-fire exam recap
What this video covers
- Why municipal securities are exempt from Securities and Exchange Commission (SEC) registration but never exempt from anti-fraud provisions, and how the exam tests this distinction
- The division of authority between the Municipal Securities Rulemaking Board (MSRB) as rule writer and the Financial Industry Regulatory Authority (FINRA) and SEC as enforcers
- How municipal bonds are quoted on a yield basis by default, and when dollar price as a percentage of par applies instead
- Why municipal par value is $1,000 per bond while the minimum denomination is $5,000, and how to calculate total cost without inflating the dollar price across the block
- The 30/360 day count convention for accrued interest, and why interest accrues up to but not including the settlement date
- The difference between serial bonds with multiple maturities, term bonds with a single maturity, and why a balloon maturity is a serial structure not a term bond
- What a bond counsel legal opinion actually covers: legality and tax-exempt status only, never credit worthiness, and what ex-legal means for marketability
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. When you're ready to drill the topic, the full Series 7 course adds adaptive practice questions and spaced-repetition flashcards.
Start on this site: free Series 7 practice questions · Series 7 pass rate