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MSRB Reaffirms Investor Protection Obligations for Transactions Involving Securities of Distressed Municipalities

MSRB reminded brokers, dealers and municipal securities dealers ("dealers") of their investor protection obligations regarding transactions in the municipal securities of distressed municipalities. MSRB Notice 2018-7 summarized the following applicable investor protection rules effecting customer transactions in these securities:

  • time-of-trade disclosure rules;​

  • suitability requirements for recommended transactions and investment strategies; and

  • standards for the fair and reasonable pricing of securities.

The MSRB reminder was issued in light of recent instances of substantial price fluctuations.

Primary Sources

  1. MSRB Notice 2018-07: Transactions in Municipal Securities of Distressed Municipalities

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Tags

Regulated Activities
Suitability and Consumer Protection Disclosures
Regulated Entities
Broker-Dealers
Regulated Products
Municipal Securities
Body of Law
Securities Law
Jurisdiction
US - Federal
Organization
FINRA / MSRB / SEC Exchanges / SIPC / Accountants
Sub-Author
MSRB