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Interpretive Guidance - Interpretive Notices
Publication date:
"List Offering Price" and Three-Hour Exception for Real-time Transaction Reporting: Rule G-14
Rule Number:

The MSRB has received questions concerning the meaning of "list offering price" in Rule G-14 Real-Time Transaction Reporting Procedures.  As used in this context, the term means the publicly announced "initial offering price" at which a new issue of municipal securities is to be offered to the public. 

Real-time transaction reporting requires dealers to report most transactions within fifteen minutes of the time of trade execution.[1]  Transactions effected at the "list offering price" by syndicate or selling group members[2] on the first day of trading in a new issue are eligible for an exception found in Rule G-14 RTRS Procedures section (a)(ii)(A).  Such transactions instead are required to be reported by the end of the day.  Note that syndicate and selling group members are not required to wait to report such transactions at the end of the day and may choose to report prior to the end of the day. 

The exception from fifteen-minute transaction reporting for list-price syndicate trades is based on operational difficulties that otherwise might be presented for dealers when large numbers of transactions at the initial offering price must be reported by a dealer at one time.  The MSRB viewed these operational considerations as sufficiently important to allow trades to be reported at the end of the day given that the price of such trades (the "list offering price") is public.  Note that transactions by syndicate or selling group members at prices other than the "list offering price" on the first day of trading in a new issue are required to be reported within fifteen minutes of the time of trade execution.  For example, transactions between the syndicate manager and syndicate members ("takedown" transactions) that are at prices other than the "list offering price" must be reported within fifteen minutes of the time of execution.  Similarly, transactions done at offering prices that have not been publicly announced, e.g. "not reoffered" prices, also must be reported within fifteen minutes of the time of execution since these prices are not public.

Questions also have been asked about the availability of the three-hour trade reporting exception found in Rule G-14 RTRS Procedures section (a)(ii)(C).  When a dealer effects a trade in an issue it has not traded in the past year and does not have CUSIP numbers and indicative data for the issue in its securities master file used to process trades for confirmations, clearance and settlement, it is allowed three hours to report.[3]  This exception is designed to allow a dealer time to set-up a security it has not traded and is available for transactions on the first day of trading in a new issue.  Note this exception is not available for syndicate and selling group members.

[1]  Rule changes to MSRB Rules G-14, on transaction reporting, and G-12(f), on automated comparison of inter-dealer transactions, that will require dealers to report transactions in real-time become effective January 31, 2005.  See MSRB Notice 2004-36 (November 17, 2004) on

[2]  References to "syndicate and selling group members" in this context are meant to include managers of syndicates as well as sole underwriters or placement agents in non-syndicated offerings.

[3]  The three-hour exception sunsets one year after real-time transaction reporting is implemented.

Interpretive Guidance - Interpretive Notices
Publication date:
Automated Comparison and Transaction Reporting of Certain Inter-Dealer Transactions in When-Issued Municipal Securities: Rules G-12(f) and G-14
Rule Number:

Rule G-12

The MSRB has received reports of problems with automated comparison and transaction reporting of certain inter-dealer transactions involving syndicate managers.  These reports indicate that some dealers may have incorrectly identified some of their when, as and if issued ("when-issued") transactions in new issue municipal securities as "syndicate transactions."  The MSRB reminds dealers that erroneous coding of comparison reports is a violation of Rule G-14, on transaction reporting, and that transactions with dealers that are not members of the syndicate or selling group for a new issue, by definition, cannot be considered "syndicate transactions" for purposes of comparison procedures.

MSRB Rule G-12(f), on automated comparison of inter-dealer transactions, requires dealers to submit for automated comparison all transactions eligible for comparison under National Securities Clearing Corporation's (NSCC) rules and procedures.  For transactions by a syndicate manager with syndicate or selling group members, NSCC procedures call for the use of a special "syndicate" submission, which does not require a submission by the contra-side for comparison to occur.[1]  Transactions between syndicate managers and dealers that are not members of the syndicate or selling group are not "syndicate transactions" under NSCC's rules and procedures and both the selling and purchasing dealers are required to report its side to the transaction for automated comparison. 

Various problems arise in the comparison process if the parties to a trade do not follow the correct procedures for comparison of the trade.  Moreover, since the trade report submitted for comparison also serves as the transaction report to the MSRB, identifying a transaction as a "syndicate transaction" in trade reports, when such transaction is not a syndicate transaction under NSCC's rules and procedures, represents a violation of a dealer's obligation to accurately report transactions to the MSRB under Rule G-14.

[1]  See "Municipal Bond Selling Group Trades," NSCC Important Notice # 2971 dated April 8, 1988.

Interpretive Guidance - Interpretive Notices
Publication date:
Reporting of Transactions Arising from Repurchase Agreements: Rule G-14
Rule Number:

The MSRB has received inquiries from dealers as to whether they must report purchase and sale transactions that arise from repurchase agreements as "transactions" under Rule G-14, on transaction reporting. Typically, a bona fide, properly documented repurchase agreement ("repo") is an agreement consisting of two transactions whereby one party purchases securities from a second party, and the second party agrees to repurchase the securities on a certain future date at a price that will produce an agreed-upon rate of return. The parties may be dealers, investors, or others. There is a repo program known to the MSRB in which one party to the repo transaction is a dealer and the other party is a customer, so this type of repo results in a sequence of two customer transactions.

The Transaction Reporting Program, which disseminates prices of municipal securities trades reported to the Board by dealers under Rule G-14, has an objective to provide price transparency about the current market. Repos, however, are not the type of transactions that were intended for reporting under Rule G-14. This is because the paired transactions of a repo function as a financing agreement and the underlying transactions, while technically purchase-sale agreements, are not necessarily effected at market prices. Since there is no way in today's batch Transaction Reporting System to suppress customer transaction reports from being portrayed as market prices, dealers should not report repos to the current Transaction Reporting Program. This approach is consistent with the practice for reporting of corporate bond transactions to the NASD's TRACE system, in that NASD advises dealers not to report corporate bond repo transactions.[1]

In January 2005, the MSRB plans to begin operation of the Real-Time Transaction Reporting System (RTRS) and to require reporting of transactions in real-time under a proposed change to Rule G-14.[2] In RTRS there is an indicator by which a dealer can report that a trade was done under special conditions, including trades done at other than the market price.[3] The MSRB plans to amend the RTRS specifications to add a value to this indicator by which a dealer would report that a transaction was done at a price away from the market because it was a customer transaction and was part of a repo. Such reporting will support the creation of a complete "audit trail" for market surveillance purposes. The indicator in this case will cause the trade to be suppressed from publication to avoid misleading transparency reports.

When the RTRS Specification is amended to add the value for "repo not at market price," an effective date will be stated for required reporting of such repos. Between January 2005 and the effective date of the amended Specification, dealers have the option to report such repos, or not, depending upon the configuration of their trade reporting systems. Before the effective date, if a dealer reports a repo that is a customer transaction away from the market, the report should include the value "R004" in the SPXR field, to indicate that it is a non-market price with "reason not listed" among currently used values.

[1] See, e.g., "TRACE Frequently Asked Questions (Reporting)" on

[2] The proposed amendment was filed with the Commission on June 1, 2004. See "Real-Time Transaction Reporting: Notice of Filing of Proposed Rule Change to Rules G-14 and 12(f)," Notice 2004-13, on

[3] See Specifications for Real-time Reporting of Municipal Securities Transactions, Version 1.2, section 4.3.2, field "SPXR."

Interpretive Guidance - Interpretive Notices
Publication date:
Certain Inter-Dealer Transfers of Municipal Securities: Rules G-12(f)and G-14
Rule Number:

Rule G-12, Rule G-14

The MSRB has received questions about whether certain transfers of municipal securities between dealers to move securities between safekeeping locations are required to be reported to the MSRB Transaction Reporting System under Rule G-14, on transaction reporting.  When a transfer of municipal securities does not represent a purchase-sale transaction and is not required to be recorded on a dealer's books and records under MSRB Rule G-8 or SEC Rule 17a-3, such transfers should not be reported under Rule G-14 and a transaction report must not be sent to the MSRB. 

One scenario that has been brought to the MSRB's attention is when a dealer ("Dealer A") that self-clears inter-dealer transactions contracts with another dealer ("Dealer B") for the safekeeping and maintenance of customer accounts.  As part of this process, Dealer A transfers securities sold to customers to Dealer B for safekeeping.  The transfer of securities from Dealer A to Dealer B in this example is not an inter-dealer purchase-sale transaction and must not be reported to the MSRB as such.  However, Dealer A and Dealer B may wish to utilize the comparison and netting facilities of a registered clearing agency to effect the delivery of securities.   

In March 2004, the MSRB published a notice addressing the processing of certain inter-dealer transfers of securities that do not represent inter-dealer purchase-sale transactions through the automated comparison facilities of National Securities Clearing Corporation (NSCC).[1]  Since data sent to NSCC for comparison of an inter-dealer purchase-sale transaction also is sent to the MSRB for transaction reporting purposes, the March 2004 notice described use of the "B" indicator for identifying such data submissions relating to transfers of securities so that they are not confused with transaction reports between dealers that represent trades made through the comparison system.  Dealers should refer to the March 2004 notice if they chose to use the facilities of NSCC for such transfers to ensure that erroneous inter-dealer transaction reports are not sent to the MSRB Transaction Reporting System.[2]

[1] See MSRB Notice 2004-9, "Notice on Deliveries of Step Out Transactions Through the Automated Comparison System," March 3, 2004, on

[2] Note, however, that a different procedure will be used to effect inter-dealer transfers of securities, using the NSCC comparison system, and without reporting the transfer to the MSRB as a transaction when MSRB's Real-Time Transaction Reporting System goes into operation, currently planned for January 2005.

Interpretive Guidance - Interpretive Notices
Publication date:
Reminder Regarding Accuracy of Information Submitted to the MSRB Transaction Reporting System: Rule G-14
Rule Number:

The Municipal Securities Rulemaking Board ("MSRB") wishes to remind brokers, dealers and municipal securities dealers (collectively "dealers") of the need to carefully monitor error reports sent by the Transaction Reporting System on T+1.

Under Rule G-14, dealers are required to report all transactions to the MSRB on trade date and have an obligation to report the information specified in the Transaction Reporting Procedures accurately and completely. The MSRB provides several services that allow dealers to monitor their transaction reporting compliance. The MSRB Dealer Feedback System ("DFS") provides a "snapshot" report two days after trade date of inter-dealer transactions reported. The DFS also provides a monthly report covering both customer and inter-dealer transactions that provides statistical information on transactions reported and information about individual transactions. An important report, that should be reviewed daily, is the report that provides feedback on customer transactions. This report is known as the "customer report edit register" and it indicates trades successfully submitted and those that contained errors or possible errors.[1]

In addition to the reports the MSRB generates to assist dealers in their compliance with Rule G-14, staff members of the MSRB's Transaction Reporting Program contact various dealers on a daily basis to alert them to specific errors or possible errors. However, the MSRB cannot contact each dealer with a transaction reporting error or possible error on a daily basis. Dealers should review the customer report edit register and make any necessary corrections to ensure trades are reported accurately with valid formats and values. Failure to do so will affect the accuracy of the information published in price transparency reports as well as the information retained in the surveillance database.[2]

For additional information on the services the MSRB provides to assist dealers in complying with Rule G-14, please visit the Transaction Reporting System section of the MSRB's web site at or call the MSRB at 703-797-6600 and ask to speak with a Transaction Reporting Assistant.


1 For additional information about these services and the compliance information they provide, see "Reminder Regarding MSRB Rule G-14 Transaction Reporting Requirements," MSRB Notice 2003-7 dated March 3, 2003, on

2 Transactions reported to the MSRB are made available to the NASD and other regulators for their market surveillance and enforcement activities.