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Interpretive Guidance -
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Time of Trade Disclosures in Inter-Dealer Transactions
Rule Number:
For inter-dealer transactions, there is no specific requirement for brokers, dealers or municipal securities dealers (individually and collectively, “dealers”) to disclose all material facts to another dealer at time of trade. A selling dealer is not generally charged with the responsibility to ensure that the purchasing dealer knows all relevant features of the municipal securities being offered for sale. The selling dealer may rely, at least to a reasonable extent, on the fact that the purchasing dealer is also a professional and will satisfy their need for information prior to entering into a contract for the municipal securities.
The items of information that professionals in an inter-dealer transaction must exchange at or prior to the time of trade are governed by principles of contract law and essentially are those items necessary adequately to describe the municipal security that is the subject of the contract. As a general matter, these items of information do not encompass all material facts, but should be sufficient to distinguish the municipal security from other similar issues. The Board has interpreted Rule G-17 to require dealers to treat other dealers fairly and to hold them to the prevailing ethical standards of the industry. The rule also prohibits dealers from knowingly misdescribing municipal securities to another dealer. As a result, it is possible that non-disclosure of an unusual feature might constitute an unfair practice and thus become a violation of Rule G-17 even in an inter-dealer transaction.
For example, with respect to bonds that prepay principal, non-disclosure of the fact that a bond prepays principal could be a violation of Rule G-17. This would be especially true if the information about the prepayment feature is not accessible to the market and is intentionally withheld by the selling dealer. Whether or not non-disclosure constitutes an unfair practice in a specific case would depend upon the individual facts of the case. However, to avoid trade disputes and settlement delays in inter-dealer transactions, it generally is in dealers’ interest to reach specific agreement on the existence of any prepayment feature and the amount of unpaid principal that will be delivered.
Notice 2025-04 - Informational Notice
Publication date:
Information for:
General Public, Investors
Notice 2025-02 - Request for Comment
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Comment due:
Information for:
Bank Dealers, Dealers, General Public, Investors
No comments received.
Notice 2025-01 - Informational Notice
Publication date:
Information for:
Dealers, General Public, Investors
Rule Number:
Notice 2024-15 - Request for Comment
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Comment due:
Information for:
Dealers, General Public, Investors, Issuers, Municipal Advisors
All Comments to Notice 2024-15
- ABLE Savings Plan Network: Letter from Bette Ann Mobley, Chair, dated April 10, 2025
- AKF Consulting Group: Letter from Andrea Feirstein, Managing Director, and Mark Chapleau, Senior Consultant, dated April 11, 2025
- Arizona State Treasurer’s Office: Letter from Kimberly Yee, Treasurer, dated April 10, 2025
- Ascensus: Letter from Christal Fenton, Associate General Counsel, dated April 10, 2025
- Bank of North Dakota: Email from James Barnhardt dated April 3, 2025
- College Savings Foundation: Letter from Chris McGee, Chair, dated April 9, 2025
- College Savings Plans Network: Letter from Mary G. Morris, Chair, dated April 2, 2025
- Commonwealth Savers Plan: Letter from Mary G. Morris, Chief Executive Officer, dated April 11, 2025
- First Public, LLC: Email from Bill Mastrodicasa dated April 11, 2025
- Illinois State Treasurer’s Office: Letter from Michael W. Frerichs, Treasurer, dated April 10, 2025; and Letter from Michael Frerichs, Treasurer, dated April 10, 2025
- Investment Company Institute: Letter from Tara Buckley, Deputy General Counsel, Financial Regulation, and Shannon Salinas, Associate General Counsel, Retirement Policy, dated April 11, 2025
- Massachusetts Educational Financing Authority: Letter from Thomas M. Graf, Executive Director, dated April 9, 2025
- my529: Letter from Richard K. Ellis, Executive Director, dated March 31, 2025
- Nebraska State Treasurer’s Office: Letter from Rachel Biar, Deputy State Treasurer for Savings Programs, dated April 2, 2025
- Pennsylvania Treasury Department: Letter from Stacy Garrity, Treasurer, dated April 2, 2025
- Securities Industry and Financial Markets Association: Letter from Leslie M. Norwood, Managing Director and Associate General Counsel, and Gerald O’Hara, Vice President and Assistant General Counsel, dated April 11, 2025
- TIAA-CREF Tuition Financing, Inc: Letter from Christopher S. Lynch, President, dated April 10, 2025
- Vestwell: Letter from Aaron Schumm, Chief Executive Officer, dated April 11, 2025
Notice 2024-13 - Informational Notice
Publication date:
Information for:
Dealers, General Public, Investors, Issuers, Municipal Advisors
Notice 2024-12 - Approval Notice
Publication date:
Information for:
Dealers, General Public, Investors
Notice 2024-10 - Approval Notice
Publication date:
Information for:
Dealers, General Public, Investors
Rule Number:
Notice 2024-09 - Request for Comment
Publication date:
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Comment due:
All Comments to Notice 2024-09
- Association of Registration Management, Inc.: Letter from Richard Izzo, President, dated August 5, 2024
- Bond Dealers of America: Letter from Michael Decker, Senior Vice President, dated August 5, 2024
- Frost Bank Capital Markets Division: Letter from Jeff Beckel, SEVP and Director of Capital Markets, dated July 30, 2024
- Frost Bank Capital Markets Division: Email from Trevor Cross dated July 30, 2024
- Securities Industry and Financial Markets Association: Letter from Leslie M. Norwood, Managing Director and Associate General Counsel, Head of Municipal Securities, dated August 5, 2024
Notice 2024-08 - Informational Notice
Publication date:
Information for:
Dealers, General Public, Investors, Issuers
Rule Number:
SEC Filing SR-MSRB-2024-05
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Notice 2024-07 - Informational Notice
Publication date:
Information for:
Bank Dealers, Dealers, General Public, Investors
SEC Filing SR-MSRB-2024-04
Publication date:
Notice 2024-06 - Informational Notice
Publication date:
Information for:
Dealers, General Public, Investors, Issuers
Rule Number:
Notice 2023-08 - Request for Comment
Publication date:
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Comment due:
Information for:
Bank Dealers, Dealers, General Public, Investors
Rule Number:
- Securities Industry and Financial Markets Association: Letter from Leslie M. Norwood, Managing Director and Associate General Counsel, dated December 15, 2023
Notice 2023-02 - Request for Comment
Publication date:
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Comment due:
All Comments to Notice 2023-02
- AKF Consulting: Letter from Andrea Feirstein, Managing Director, and Mark Chapleau, Senior Consultant, dated April 20, 2023
- Bond Dealers of America: Letter from Michael Decker, Senior Vice President, dated April 17, 2023
- College Savings Plans Network: Letter from Rachel Biar, Nebraska Assistant State Treasurer, NEST 529 College Savings Program Director, Chairman, College Savings Plans Network, dated April 17, 2023
- Government Finance Officers Association: Letter from Emily Brock, Director, Federal Liaison Center, dated July 21, 2023
- McLane, Curtis: Email dated April 19, 2023
- my529: Letter from Richard K. Ellis, Executive Director, dated April 17, 2023
- Securities Industry and Financial Markets Association: Letter from Leslie M. Norwood, Managing Director and Associate General Counsel, Head of Municipal Securities, dated April 17, 2023
Notice 2022-08 - Approval Notice
Publication date:
Information for:
Bank Dealers, Dealers, Investors, Municipal Advisors
Rule Number:
Compliance Resource
Publication date:
Compliance Resource
Publication date:
Information for:
Bank Dealers, Dealers, Investors
Rule Number:
Compliance Resource
Publication date:
Information for:
Dealers, Investors
Rule Number:
Compliance Resource
Publication date:
Information for:
Dealers, General Public, Investors, Issuers, Municipal Advisors
Compliance Resource
Publication date:
Information for:
Bank Dealers, Dealers, General Public, Investors, Issuers, Municipal Advisors
Compliance Resource
Publication date:
Information for:
Bank Dealers, Dealers, General Public, Investors, Issuers, Municipal Advisors
