MSRB Rules Governing Municipal Securities

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Chapters in this video

  1. 0:00 Bona fide quotes and the unlabeled nominal trap
  2. 2:03 Fair dealing to issuers, not just customers
  3. 2:54 Principal markups versus agency commissions
  4. 3:37 Employee account duplicate confirmations and solicitor rules
  5. 5:01 MSRB writes rules, FINRA and SEC enforce them
  6. 5:43 Rapid-fire exam recap

What this video covers

  • Why an unlabeled quotation is presumed bona fide, and the legal trap of forgetting the "nominal" label
  • The fair-dealing rule's duty to all persons, including issuers in negotiated underwritings, not just retail customers
  • Fair pricing for principal trades: markups and markdowns must be fair and reasonable based on prevailing market conditions
  • Fair pricing for agency trades: commissions must be fair and reasonable, and the distinction between markup and commission on test day
  • Employee account rule (G-28): written notice and duplicate confirmations to the employing dealer, not the employee's own firm
  • Solicitor payment rule (G-38): prohibition on paying unaffiliated outsiders to solicit municipal business
  • Municipal fund securities reporting (G-45): 529 plans and ABLE accounts require separate MSRB reporting, with LGIPs excluded
  • MSRB enforcement gap: the MSRB writes rules but FINRA, the SEC, and federal banking regulators enforce them

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