Muni Security Quoting Obligations

Overview

MSRB Rule G-13 requires that broker-dealers offering quotes in municipal securities have an obligation to determine that the quotes are "bona fide" and reflect the "fair market value" of the security that is the subject of the quote. This obligation generally applies even when the broker-dealer is distributing a quote on behalf of a third party, although an exception is available where the quote was provided by a "sophisticated municipal market professional." In the case, the broker-dealer is entitled, in the absence of a red flag, to rely on the judgment of the sophisticated municipal market professional as to the bona fides of the quote.

See also the topic pages on Best Execution and Mark-Ups.

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