Municipal Syndicate Operations
Chapters in this video
- 0:00 Forming the syndicate and the good faith deposit
- 2:02 Eastern undivided vs. Western divided liability
- 3:34 Slicing the spread and why selling concession wins
- 5:00 Total takedown vs. reallowance for non-members
- 5:48 MSRB order priority: presale, group, designated, member
- 7:21 The 30 calendar day syndicate settlement window
- 8:03 Rapid-fire exam recap
What this video covers
- What a municipal syndicate is, the role of the senior manager, and what the syndicate letter and good faith deposit actually commit a member to
- Why Eastern (undivided) accounts carry shared liability for unsold bonds and Western (divided) accounts do not, and which one is riskier and more common in municipal deals
- The three components of the underwriter's spread (management fee, underwriting fee, selling concession) and why the selling concession is always the largest
- How to compute total takedown as underwriting fee plus selling concession, and why the management fee is excluded
- Why a non-member dealer who helps sell bonds earns only the reallowance, a slice of the selling concession
- The Municipal Securities Rulemaking Board (MSRB) priority of orders (presale, group net, designated, member) and why customer orders beat dealer orders
- The 30 calendar day syndicate settlement window, and why it is not T plus one
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