MSRB Notice 2013-13: Transactions in Direct-Pay Municipal Bonds Subject to Subsidy Reductions Due to Federal Sequester

MSRB released a notice explaining that, due to the effects of federal sequestration, the IRS will be reducing refundable credits payable to issuers of certain direct-pay municipal bonds.Dealers in particular must fully understand their customer protection obligations under MSRB rules in connection with such transactions because subsidy reductions have the potential to affect investors buying, selling or holding direct-pay bonds for which subsidy payments have been reduced.

See: MSRB Notice 2013-13.