MSRB Notice to Dealers that use the Services of Broker’s Brokers

In view of the important role that broker's brokers play in the provision of secondary market liquidity for municipal securities owned by retail investors, MSRB Rule G-43 sets forth particular rules to which broker's brokers are subject. Rule G-43(a)(i) provides:

Each dealer acting as a "broker's broker" with respect to the execution of a transaction in municipal securities for or on behalf of another dealer shall make a reasonable effort to obtain a price for the dealer that is fair and reasonable in relation to prevailing market conditions. The broker's broker must employ the same care and diligence in doing so as if the transaction were being done for its own account.

Effective Date: Rule G-43 and the related Interpretive Notice will be effective December 22, 2012.

View notice in full here (links externally to MSRB website).