Muni Distribution Procedures

Overview

While Congress generally has avoided direct regulation of the issuers of municipal securities, the MSRB regulates the process by which municipal securities are distributed by virtue of its authority over municipal securities firms. In this regard, the MSRB regulates various practices in connection with the activities of underwriting syndicates for muni offerings (see MSRB Rule G-11), prohibits certain conflicts of interest in connection with a firm servicing as both an underwriter and a muni advisor (see MSRB Rule G-23(d)), requires muni dealers to obtain CUSIP numbers and make depository arrangements for new issues (see MSRB Rule G-34), and imposes certain reporting requirements in connection with muni fund securities (see MSRB Rule G-45). In addition, MSRB Rule G-17 imposes a variety of "fair dealing" requirements in connection with muni underwriting activities, including an obligation of a muni underwriter to make disclosures regarding itself to an issuer.

See also the pages on Muni Offering Disclosures, EMMA, Muni Financial Advisory, Muni Offering Disclosures, and Muni Best Execution.

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Statutes and Rules

  • SA Section 3(a)(2) (Exemption from registration under the Securities Act for States, territories, political subdivisions and public instrumentalities)
  • SEA Section 15B(b)(2)(K) (Authority of the MSRB to establish rules as to sales of new issues to related accounts)
  • SEA Section 15B(d) (Limitations on the authority of the SEC and MSRB as to requiring documents from an issuer and grant of authority to the MSRB as to documents from broker-dealers)
  • MSRB Rule G-11 (Primary offering practices)
  • MSRB Rule G-17 (Conduct of muni securities and muni advisory activities)
  • MSRB Rule G-23(d) (Prohibition on engaging in underwriting activities)
  • MSRB Rule G-34 (CUSIP numbers, new issue and market identification requirements)
  • MSRB Rule G-45 (Reporting of information on muni fund securities)