Sophisticated Municipal Market Professionals ("SMMPs")

Overview

MSRB Rule G-48 provides broker-dealers with a number of exemptions, or reduced regulatory requirements, in certain transactions of theirs with "sophisticated municipal market professionals" ("SMMPs"), as defined in MSRB Rule D-15. These reduced obligations are available only as to transactions that were not recommended by the firm and that meet certain other conditions. The affected obligations are those related to (i) time of trade disclosure obligations under MSRB Rule G-47, (ii) transaction pricing under MSRB Rule G-30, (iii) suitability under MSRB Rule G-19, (iv) the distribution of quotations under MSRB Rule G-13, and (v) best execution obligations under MSRB Rule G-18.

See the definition of "institutional account" under FINRA Rule 4512(c) and the limitation on a broker-dealer's suitability obligations to "institutional accounts" under FINRA Rule 2111(b). See also the topic pages on Regulation Best Interest, Muni Best Execution, Muni Suitability, Muni Trading Obligations and Broker-Dealer Mark-Ups.

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Rules

  • MSRB Rule D-15 (Definition of "sophisticated municipal market professionals")
  • MSRB Rule G-48 (Exemptions for certain transactions with SMMPs)

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