Select regulatory documents by category:
Comments on MSRB Notice 2007-10 (March 5, 2007)
- Bear Stearns and Co. Inc.: Letter from Daniel L. Keating, Senior Managing Director, dated May 9, 2007
- CUSIP Service Bureau: Letter from Gerard Faulkner, Director of Operations, dated May 1, 2007
- First Southwest Company: Letter from Richard A. DeLong, Managing Director, Municipal Trading and Underwriting, dated May 3, 2007
- J.J.B. Hilliard, W.L. Lyons, Inc.: Letter from Lu Ann Vargo, Senior Vice President, Municipal Trader/Underwriter, dated April 4, 2007
- Joe Jolly and Co., Inc.: Letter from Joe Jolly, Jr., dated May 3, 2007
- Lehman Brothers: E-mail from Richard Sentochnik, Senior Vice President, dated May 3, 2007
- Roosevelt and Cross, Inc.: Letter from Raymond J. O'Sullivan, Executive Vice President,
dated April 30, 2007 - Securities Industry and Financial Markets Association: Letter from Leslie M. Norwood, Vice President and Assistant General Counsel, dated May 9, 2007
- Wiley Bros. Facsimile from Carrie Harris, dated May 3, 2007
Reminder Notice on Use of "List Offering Price/Takedown" Indicator: RULE G-14
On January 8, 2007, certain amendments to Rule G-14 concerning the “List Offering Price/Takedown” indicator became effective. These amendments require the use of the “List Offering Price/Takedown” indicator on primary market sale transactions executed on the first day of trading of a new issue:
- by a sole underwriter, syndicate manager, syndicate member or selling group member at the published list offering price for the security (“List Offering Price Transaction”); or
- by a sole underwriter or syndicate manager to a syndicate or selling group member at a discount from the published list offering price for the security (“RTRS Takedown Transaction”).[1]
Since implementation of the revised “List Offering Price/Takedown” indicator, the MSRB has received several questions concerning the use of the indicator on certain transactions executed by sole underwriters, syndicate managers, syndicate members, or selling group members on the first day of trading in a new issue. These questions relate to whether inter-dealer transactions at a price equal to the “list offering price” are included in the definition of “List Offering Price Transactions.” The MSRB wishes to clarify that inter-dealer transactions are not included in the definition of “List Offering Price Transactions.”[2]
The MSRB has previously clarified that the published list offering price is defined as the “publicly announced ‘initial offering price’ at which a new issue of municipal securities is to be offered to the public.”[3] A large number of sales to investors at the published list price are expected on the first day of trading of a new issue, and these transactions offer relatively little value to real-time transparency. Consequently, the “List Offering Price” exception provides these transactions with an end-of-day exception to the 15-minute deadline. An inter-dealer sale transaction at a price equal to the list offering price, however, does provide useful current market information, since it can be presumed that the security is destined to be redistributed to investors at a price above the published list offering price. Inter-dealer transactions at the list offering price, therefore, are not included in the definition of “List Offering Price Transactions,” and identifying such transactions with the “List Offering Price/Takedown” indicator would violate MSRB Rule G-14.
[1] See Rule G-14 RTRS Procedures (d)(vii). A transaction reported with the “List Offering Price/Takedown” indicator receives an end-of-day exception to the 15-minute reporting deadline.
[2] An inter-dealer transaction may meet the definition of an “RTRS Takedown Transaction” when a sole underwriter or syndicate manager executes a transaction with a syndicate or selling group member at a discount from the published list offering price for the security.
[3] See “Reminder Notice on ‘List Offering Price’ and Three-Hour Exception for Real-Time Transaction Reporting: Rule G-14,” MSRB Notice 2004-40 (December 10, 2004). If the price is not publicly disseminated (e.g., if the security is a “not reoffered” maturity within a serial issue), the transaction is not considered a “List Offering Price Transaction.”
