Municipal Market Activity - Tuesday, September 11 - Thursday, September 13, 2001

Municipal Market Activity  - Tuesday, September 11 – Thursday, September 13, 2001

The Transaction Reporting System operated by the MSRB collects trade information on all dealer-dealer and customer-dealer trades each evening and makes available a report the following morning.  The dealer-dealer trade information is forwarded to us by a subsidiary of the Depository Trust and Clearing Corporation.  While dealer-dealer trades were reported and processed (cleared and settled) by DTCC on Tuesday and Wednesday, technical difficulties caused by the interruptions in communications lines running into the World Trade Center have prevented us from receiving the information in a reliable form that we can process.  Efforts are being made to remedy this problem as soon as possible. 

We have received files relating to customer-dealer trades (both buys and sells) executed by firms around the country.  For Tuesday, we received information on 846 trades in 652 different securities, totaling $118,568,000 in par value.  For Wednesday, we received information on 1321 trades in 541 issues, totaling $440,575,000 in par value.  By comparison, on average in the first half of this year, we would have expected at least 20,000 customer-dealer trades in 10,000 different securities, totaling about $6 billion par value, to have taken place on a given day.

Underwriting activity has been negligible.  It appears that a few new issues did come to market on Wednesday and that some closings with issuers did take place as well.  Many new issues have been postponed until next week or the week after.  It is expected that new issue bond volume in 2001 will approach $230 billion from more than 14,000 separate offerings by states, cities, and other political subdivisions in the United States.

Rule-related Matters

Settlement Dates– We have received a number of inquiries from dealers about settlement dates.  Dealers are reminded that unless both parties expressly agree to a different settlement date, all trades will settle “regular way” – the third business day following the trade date.

Rule G-36 – We have spoken with the NASD and asked them to exercise judgment and forbearance with regard to the requirement that dealers send the MSRB official statements within the timeframes specified in the rule.

September 13, 2001