On June 28, the MSRB sought approval from the SEC for a proposed amendment to Rule G-34 limiting the use by municipal securities dealers of the designation “not reoffered” or “NRO” without also including price or yield information in written communications about new issues of securities. The MSRB has requested that the proposed amendment be made effective 28 days after the date of SEC approval. MSRB Release. MSRB Proposed Amendment.
On June 25, the SEC approved (i) MSRB Rule G-43 establishing obligations for municipal securities dealer firms that act as “broker’s brokers” and (ii) interpretative guidance on the duties of dealers that use such firms. The rule and interpretive guidance will be effective on December 22. MSRB Release. MSRB Rule. MSRB Guidance.
On May 31, the MSRB published a concept release seeking comment on a possible proposal to require underwriters and municipal advisors to disclose whether they have made or received certain payments in connection with new issues of municipal securities. Comments must be submitted no later than July 31, 2012. MSRB Concept Release.
On June 1, 2012, the MSRB published a request for comment on a proposal to provide for more rapid public dissemination of trade size information for large municipal securities transactions through the MSRB Real-Time Transaction Reporting System. Comments must be submitted no later than July 2, 2012. MSRB Request for Comment.
On May 4, the SEC approved the MSRB’s proposed interpretive notice on the application of MSRB Rule G-17 to underwriters of municipal securities. According to the notice, underwriters of municipal securities will be required to make certain disclosures to their state and local government clients, including risks about complex financial transactions, potential conflicts of interest, and compensation received from third-party providers of derivatives and investments. The notice will become effective on August 2. MSRB Release. MSRB Notice. SEC Release.
On April 10, the MSRB requested comment on proposed changes to rules that would allow underwriters of municipality securities to satisfy certain of their obligations to submit information about new issues with their data submission to the New Issue Information Dissemination Service, which is operated by the DTCC. Comments must be submitted by May 8. MSRB Release.
On March 26, the MSRB requested approval from the SEC to revise the definition of “sophisticated municipal market professional” (SMMP) so that it is consistent with the new FINRA suitability rule for institutional customers. The proposal defines “SMMP” as an “institutional customer of a dealer that: (i) the dealer has a reasonable basis to believe is capable of evaluating investment risks and market value independently, both in general and with regard to particular transactions in municipal securities and (ii) affirmatively indicates that it is exercising independent judgment in evaluating the recommendations of the dealer. Request for Approval. MSRB Release.
On March 21, the MSRB received approval from the SEC to display price and yield data from inter-dealer municipal securities transactions on the EMMA website, which currently only displays yield data for municipal securities transactions between dealers and customers. Data from inter-dealer municipal securities transactions will be published on the EMMA website beginning April 30. MSRB Release.
On March 13, the MSRB requested comment on a proposal to prohibit brokers, dealers, and municipal securities dealers from using the term “not reoffered” or “NRO”, which indicates that certain maturities of a new issue are not offered to investors, in any written communication unless it also includes the initial offering price or yield information about the municipal securities. Comments are due by April 10. MSRB Release. Request for Comment.
On March 5, the MSRB requested approval from the SEC to put in place a new rule that would: (i) establish specific obligations for firms that provide secondary market liquidity for municipal securities retail investors and (ii) increase the duties of dealers that use these firms. The MSRB expects the rules to be effective six months after approval by the SEC. MSRB Release. Rule Proposal.