Request for Comment on Rule G-43 on Broker’s Brokers

MSRB Notice 2011-18

February 24, 2011

The MSRB published a notice to solicit comment on draft Rule G-43, regarding broker's brokers. The new rule would define a "broker's broker" as a broker, dealer, or municipal securities dealer that "principally effects transactions for other [such entities] or that holds itself out as a broker's broker." The proposed rule would set forth basic duties for broker's brokers that would be similar to the duties in current Rule G-18. Among other things, this would require a broker's broker to make reasonable efforts to obtain a price for the dealer that is fair and reasonable relative to market conditions, and that broker's brokers must act with the "same care and diligence" as though they were acting for their own account. The proposal would also make related changes to Rules G-8, G-9, and G-18, relating to recordkeeping and related matters.

Cross References

MSRB Notice 2010-35 (Initial request for comments)

Comments received on 2010-35

MSRB Rules G-8, G-9, G-18, G-43