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Contact: Jennifer Galloway, Chief Communications Officer
             (703) 797-6670
             jgalloway@msrb.org


MUNICIPAL SECURITIES RULEMAKING BOARD RECEIVES APPROVAL FROM
SECURITIES AND EXCHANGE COMMISSION ON PRIORITY OR ORDERS PROPOSAL

Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) has received approval from the Securities and Exchange Commission of its proposed rule change concerning priority of orders in primary offerings. The measure seeks to increase the distribution of new issues of municipal bonds to investors in the primary market by ensuring that underwriters follow provisions that generally give priority to customer orders over those for their own account.

The changes are effective for new municipal securities issues with a “time of formal award,” as defined in MSRB Rule G-34, after October 12, 2010. The “time of formal award” typically occurs on the sale date.

Under the new rules, underwriters are required to give priority to orders from customers over orders for their own accounts and orders from affiliates or other related accounts, unless specific exceptions apply. Underwriters that fail to follow issuers’ directions concerning retail order periods may violate Rule G-17, on fair dealing. 

To assist in enforcement of these rules, underwriters must keep records when they deviate from these customer priority rules and their reasons for doing so, as well as records of those issues for which there are retail order periods and the issuers’ definition of “retail,” if any. Records of all orders, filled or unfilled, must be retained for six years.

 

The Municipal Securities Rulemaking Board (MSRB) protects and strengthens the municipal bond market, enabling access to capital, economic growth, and societal progress in tens of thousands of communities across the country. The MSRB fulfills this mission by creating trust in our market through informed regulation of dealers and municipal advisors that protects investors, issuers and the public interest; building technology systems that power our market and provide transparency for issuers, institutions, and the investing public; and serving as the steward of market data that empowers better decisions and fuels innovation for the future. The MSRB is a self-regulatory organization governed by a board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is overseen by the Securities and Exchange Commission and Congress.

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