MSRB Requests Comment on Proposed Guidance for Prevailing Market Price (MSRB Notice 16-07)

The MSRB requested comments on draft amendments to MSRB Rule G-30. The amendments would include guidance on (i) establishing the prevailing market price for a security and (ii) calculating markups and markdowns for that prevailing market price. The MSRB asserted that the draft guidance would promote "consistent compliance" with existing fair-pricing obligations under MSRB rules, and also would be "generally harmonized with the approach taken in other fixed income markets."

The prevailing market price would be based on the relatively contemporaneous cost of a dealer's acquisition of a security sold to a customer. If no such price existed, then the guidance would establish a "waterfall" of procedures to determine the price based on existing FINRA guidance on the corporate securities markets.

Comments on the draft amendments must be submitted by March 31, 2016.