Select regulatory documents by category:
Bank Dealers, Dealers, Municipal Advisors
1. Bond Dealers of America: Letter from Michael Nicholas, Chief Executive Officer, dated November 2, 2012
2. Dorsey & Company, Inc.: Letter from Steven Rueb, Vice President, dated November 14, 2012
3. Edward D. Jones & Co., L.P.: Letter from David Fischer-Lodike, Capital Markets & Operations Compliance, dated November 2, 2012
4. Financial Planning Association: Letter from David A. Cohen, Assistant Director - Government Relations, dated November 2, 2012
5. Government Finance Officers Association: Letter from Susan Gaffney, Director, Federal Liaison Center, dated November 5, 2012
6. Investment Company Institute: Letter from Dorothy Donohue, Deputy General Counsel - Securities Regulation, dated November 2, 2012
7. National Association of Independent Public Finance Advisors: Letter from Jeanine Rodgers Caruso, President, dated November 2, 2012
8. Rhode Island Health and Educational Building Corporation: Letter from Robert E. Donovan, Executive Director, dated October 15, 2012
9. Securities Industry and Financial Markets Association: Letter from David L. Cohen, Managing Director, Associate General Counsel, dated November 2, 2012
10. Vanguard: Letter from Christopher Alwine, Head of Municipal Bond Group, dated November 2, 2012
1. Securities Industry and Financial Markets Association: Letter from Leslie M. Norwood, Managing Director and Associate General Counsel, dated May 8, 2012
2. TD Securities (USA) LLC: E-mail from Frank Alessandro dated May 8, 2012
1. Alamo Capital: E-mail from Bill Mullally dated March 9, 2012
2. Bond Dealers of America: Letter from Michael Nicholas, Chief Executive Officer, dated April 13, 2012
3. CFA Institute: Letter from Kurt N. Schacht, Managing Director, Standards and Financial Market Integrity, and James C. Allen, Head, Capital Markets Policy, dated April 13, 2012
4. Edward D. Jones & Co., L.P.: Letter from David E. Fischer-Lodike, Capital Markets and Operations Compliance, dated April 13, 2012
5. Full Life Financial LLC: Letter from Keith Newcomb, Portfolio Manager, dated April 13, 2012
6. Government Finance Officers Association: Letter from Susan Gaffney, Director, Federal Liaison Center, dated April 13, 2012
7. Investment Company Institute: Letter from Dorothy Donohue, Deputy General Counsel-Securities Regulation, dated April 13, 2012
8. Li, Richard: Letter dated March 7, 2012
9. Melton, Chris: E-mail dated April 13, 2012
10. National Association of Independent Public Finance Advisors: Letter from Colette J. Irwin-Knott, President, dated April 13, 2012
11. Securities Industry and Financial Markets Association: Letter from David L. Cohen, Managing Director, Associate General Counsel, dated April 13, 2012
12. Thornburg Investment Management: Letter from Josh Gonze, Chris Ryon, and Chris Ihlefeld, Co-Portfolio Managers, dated March 12, 2012
13. Vanguard: Letter from Christopher Alwine, Head of Municipal Bond Group, dated April 13, 2012
14. Wells Fargo Advisors: Letter from Ronald C. Long, Director of Regulatory Affairs, dated April 13, 2012
Build America Bonds and Other Tax Credit Bonds
The American Recovery and Reinvestment Act of 2009 added a provision to the Internal Revenue Code that authorizes state and local governments to issue two types of “Build America Bonds” as taxable governmental bonds with Federal subsidies for a portion of their borrowing costs.
The first type of Build America Bond provides a Federal subsidy through Federal tax credits to investors in the bonds. The tax credits may also be “stripped” and sold to other investors, pursuant to regulations to be issued by the Treasury Department. In its Notice 2009-26, the Treasury Department refers to this type of Build America Bond as “Build America Bonds (Tax Credit).”
The second type of Build America Bond provides a Federal subsidy through a refundable tax credit paid to state or local governmental issuers by the Treasury Department and the Internal Revenue Service. The Treasury Department refers to this type of Build America Bond as “Build America Bonds (Direct Payment).” This Notice refers to both Build America Bonds (Tax Credit) and Build America Bonds (Direct Payment) as “Build America Bonds.”
Some municipal market participants have requested guidance on whether Municipal Securities Rulemaking Board rules are applicable to Build America Bonds. Build America Bonds are municipal securities, because they are issued by States and their political subdivisions and instrumentalities. Accordingly, all of the MSRB’s rules apply to transactions effected by brokers, dealers, and municipal securities dealers (“dealers”) in Build America Bonds, including rules regarding uniform and fair practice, political contributions, automated clearance and settlement, the payment of MSRB underwriting and transaction assessment fees, and the professional qualifications of registered representatives and principals.
For example, dealers in the primary market should note that current Rule G-36 requires underwriters to submit official statements to the MSRB, accompanied by completed Form G-36 (OS), for most primary offerings of municipal securities. Dealers also have official statement delivery responsibilities to customers under Rule G-32. Once final, recently proposed revisions to Rule G-32 will require underwriters to satisfy their official statement submission obligations electronically through use of the MSRB’s Electronic Municipal Market Access system (“EMMA”) and will allow dealers to satisfy their official statement delivery obligations by means of appropriate notice to customers.
The MSRB understands that many Build America Bonds may be sold by dealers’ taxable desks and reminds dealers that Rule G-27 requires that municipal securities principals must supervise all municipal securities activities, including such sales.
Dealers in the secondary market should note that Rule G-14 requires that all transactions in municipal securities must be reported to the MSRB within certain prescribed time periods.
The following additional types of tax credit bonds are also municipal securities subject to MSRB rules: Recovery Zone Economic Development Bonds, Qualified School Construction Bonds, Clean Renewable Energy Bonds, New Clean Renewable Energy Bonds, Midwestern Tax Credit Bonds, Energy Conservation Bonds, and Qualified Zone Academy Bonds.
This Notice does not address the securities law characterization of the tax credit component of Build America Bonds (Tax Credit) or other tax credit bonds, whether the credits are used by investors in the bonds or stripped and sold to other investors.
Comments on MSRB Notice 2006-19 (July 27, 2006)
- American Bar Association, Section of State and Local Government Law: Letter from Edward J. Sullivan, Chair, dated October 9, 2006
- American Governmental Financial Services Company: Letter from Robert W. Doty, President, dated September 15, 2006
- Automatic Data Processing, Inc.: Letter from Gerard F. Scavelli, Senior Vice President & General Manager, dated September 15, 2006
- Bernardi Securities, Inc.: Letter from Eric Bederman, Chief Compliance Officer, dated August 7, 2006
- Bond Market Association: Letter from Leslie M. Norwood, Vice President and Assistant General Counsel, dated September 15, 2006
- brokersXpress, LLC: Letter from Blaine Schwartz, President & CCO, dated September 15, 2006
- College Savings Plans Network: Letter from Jackie T. Williams, Chair, dated September 22, 2006
- Commerce Bancshares, Inc.: Letter from Michael A. Dardis, Manager of Trust and Investment Products Compliance, dated September 13, 2006
- Digital Assurance Certification LLC: Letter from Paula Stuart, Chief Executive Officer, dated September 29, 2006
- DPC DATA Inc.: Letter from Peter J. Schmitt, Chief Executive Officer, dated September 13, 2006
- Edward D. Jones & Co., LP: Letter from Robert Beck, Principal, Municipal Bonds, dated September 13, 2006
- First Southwest Company: Letter from Richard A. DeLong, Senior Vice President, Municipal Trading and Underwriting, dated September 15, 2006
- Griffin, Kubik, Stephens & Thompson, Inc.: Letter from Robert J. Stracks, Counsel, dated September 14, 2006
- Investment Company Institute: Letter from Elizabeth R. Krentzman, General Counsel, dated September 14, 2006
- J.J.B. Hilliard, W.L. Lyons, Inc.: Letter from Ronald J. Dieckman, Senior Vice President, Director of Public Finance/Municipals, dated August 4, 2006
- Morgan Keegan & Company, Inc.: Letter from Jerry L. Chapman, Managing Director, Municipal Product Manager, dated August 31, 2006
- Municipal Advisory Council of Texas: Letter from Gary P. Machak, Chairman, dated September 14, 2006
- National Association of Bond Lawyers: Letter from Walter J. St. Onge III, President, dated September 14, 2006
- National Federation of Municipal Analysts: Letter from Eric Friedland, Chairman, dated September 15, 2006
- Regional Municipal Operations Association: Letter from Thomas Sargant, President, dated September 27, 2006
- Securities Industry Association: Letter from Elizabeth Varley, Vice-President and Director of Retirement Policy, and Michael D. Udoff, Vice-President, Associate General Counsel and Secretary, dated September 20, 2006
- Standard & Poor’s CUSIP Service Bureau: Letter from Gerard Faulkner, Director – CUSIP Operations, dated September 15, 2006
- Stone, Daniel E.: Letter dated September 2, 2006
- TRB Associates: Letter from Ruth D. Brod, Consultant, dated September 14, 2006
- UBS Securities LLC: Letter from Terry L. Atkinson, Managing Director, dated September 15, 2006
- UMB Bank, N.A.: Letter from James C. Thompson, Divisional Executive Vice President, Investment Banking Division, dated September 14, 2006
- USAA Investment Management Company: Letter from Eileen M. Smiley, Vice President and Assistant Secretary, dated September 15, 2006
- Wells Fargo Institutional Brokerage & Sales: Letter from John McCune, President, dated September 14, 2006
- Zions Bank Public Finance: E-mail from Eric Pehrson, Vice President, dated September 8, 2006
