If a municipal securities firm is subject to a 2-year ban under MSRB Rule G-37, it would be permitted to: A. act as a financial advisor to that municipality during the period of the banB. The underwriter for the issuer files a copy of the Official Statement with the MSRB, which puts it up on its EMMA website for public access. It regulates municipal brokers and dealers, including bank dealers in the municipal market. A municipal securities firm places the following advertisement: We Hold and Sell New York State 6% TANs. The maximum amount that can be given by an MFP to an elected officials campaign in which the MFP is entitled to vote is $250 without any problems. Establishes terms and conditions for sales by dealers of new issues of municipal securities in primary offerings, including provisions on priority of customer orders. Federal Deposit Insurance CorporationC. If more than $250 is contributed, then that firm is banned from engaging in municipal securities business with that issuer for the next 2 years. A. If a Municipal Finance Professional gives more than $250 to an elected officials campaign in which the MFP is entitled to vote, then the: A. MFP is banned for 1 year from being associated with a municipal securities dealerB.
Regulations - MSRB Rules : Review Questions Flashcards | Quizlet C) between member firms and members of the public. A. For purposes of this rule, the following terms have the following meanings: (i) The term "accumulation account" means an account established in . There is no spread disclosure on competitive bid offerings. In this example, the bond has a 7% coupon rate and was purchased by the dealer at par. The Securities Acts Amendments of 1975 which established the Municipal Securities Rulemaking Board allow the MSRB to do all of the following EXCEPT create regulations: A. covering municipal related recordkeepingB. 1/7.00 = 14% reduction in yield, which approximates the percentage mark-up. The MSRB limits gifts related to ones activities as a registered representative to $100 value per person per year. Anyone involved with municipal bond mutual funds (as opposed to individual issues) would be regulated by FINRA. A. This question is trying to confuse the MSRB gift limit with the MSRB Political Contribution Rule - and neither one applies in this scenario! capacity in which the broker-dealer actedC. broker-dealer against another broker-dealer. A. Under MSRB rules, confirmation disclosure for bonds sold at par must include which of the following? A. refer the customer to a municipal firm that has the B. contact at least 5 dealers and obtain quotes for the customerC. Which statement is TRUE? Quarterly Rule Books. regarding permitted gifts to persons where the gift is related to the municipal securities business. municipal dealersD. It relies on the existing enforcement network for this. MSRB must be notified in advance of the sharing arrangement. Guaranteeing a customer account against lossB. While the Municipal Securities Rule Board (MSRB) regulates all matters related to the underwriting and trading of state and municipal securities, it does not have enforcement powers of its rules. Explanation: Above.
Regulations -MSRB Rules Flashcards | Quizlet The MSRB states that if one is available, it must be given to purchasers at or prior to settlement of sale. Rather, the lowest interest rate bidder wins. A. If a non-MFP, such as a typical registered representative, gives a political contribution of any amount to an elected officials campaign in which he or she is, or is not, entitled to vote, this will not trigger a ban! Details of bonds that have been pre-refundedC. This is prohibited for both competitive bid and negotiated underwritings. the yield at which the transaction was effected and the resulting dollar price. Taking this individual to dinner is permitted because this is business entertainmentD. customer must be sent a copy of the Official Statement, if available. Under MSRB rules, which of the following documents, if prepared, must be sent to the purchaser of a new issue municipal bond? Series 6 Prep. (ii) The "RTRS Business Day" is 7:30 a.m. to 6:30 p.m., Eastern Time, Monday through Friday, unless .
A. The MSRB has no authority over municipal issuers. To buy the municipalitys bonds into discretionary accounts, specific customer authorization is required. A. $50 baseball mittB. If the customer refuses to disclose significant financial information, unsolicited trades can still be madeB. do none of the above. The MSRB does not require any filing of advertising, and advertisements can be placed in any medium. Registered representatives are not permitted to approve municipal advertising. MFPs are registered individuals in municipal finance departments and their supervisors. All of the following statements are true regarding the Official Statement EXCEPT that the Official Statement is: A. not required by the Securities Act of 1933 because municipal issues are exempt securitiesB. There is no requirement to disclose to a customer the underwriters spread in a competitive bid issue (that is true for negotiated issues only). Under MSRB rules, the firm should: A. refer the customer to a municipal firm that has the bonds in inventoryB. The syndicate member must disclose this to the manager when the order is placed; the manager will disclose any of these orders that have been filled to the other syndicate members when the account is closed; and the manager will fill these orders last- meaning they get priority after pre-sale, group, and designated orders. Under MSRB rules, confirmation disclosure for bonds sold at a discount or premium must include all of the following EXCEPT: A. the yield at which the transaction was effected and the resulting dollar priceB. Taking this individual to dinner is permitted because this is business entertainmentD. Since this firm effects trades solely on a principal basis, it carries inventory and is a market maker. Recommending the purchase of a put option to the customer as protection against lossC. Since municipal bond trades are effected over-the-counter, again, FINRA acts as the enforcement agent for broker-dealers. Federal Reserve BoardD. The $300 of out of pocket expenses are permitted because the MSRB places a $500 limit on the value of services that can be volunteered to each election campaign by an MFPD. Giving the ticket to the game to this individual violates the MSRB $100 gift limitB. On the other hand, if a broker-dealer initiates a claim against a customer and the customer has not signed an arbitration agreement, then the customer cannot be forced to arbitration (Choice IV). Thus, of the $500 contribution = $250 - the maximum that can be contributed without subjecting the member firm to a ban. Thus, there is an inherent conflict of interest between the two. I The syndicate member must disclose to the manager that the bonds are being purchased for an accumulation accountII The manager will disclose the order to the other syndicate members when the syndicate account is closedIII The order will be treated as a member takedown order by the manager. The municipal principal must handle the resolution of each written customer complaintD. A. A municipal principal that supervises municipal underwritingsD. The OTS - Office of Thrift Supervision, supervised Savings and Loans - and savings and loans do not deal in the municipal marketplace. It also sets rules for the conduct of municipal securities representatives - including imposing a $100 gift limit similar to that of FINRA. Federal Deposit Insurance Corporation. If the bond is reoffered at 100 1/2, the dealer is taking a 1/2% mark-up. The political contribution will result in a ban on the municipal securities firm performing negotiated underwritings for that issuer for 2 yearsD. Giving the ticket to the game to this individual violates the MSRB $100 gift limitB. The advertisement must show the bond rating assigned by Moodys or Standard and Poors. Form letters are defined as advertising, as are notices, circulars, reports, market letters and reprints of these items. The firm recently completed a $100 million underwriting for the city and the firm is hosting a dinner to celebrate the closing of the deal. A Municipal Finance Professional (MFP) and her spouse draw a $500 check from their joint checking account and submit it to a local mayoral campaign. No, the MSRB relies on the NASD to enforce their rules It makes no difference if the securities selected are not investment grade; nor if the securities are packaged products like mutual funds and unit trusts; or derivatives like options. Which statement is TRUE? The MSRB regulates all of the following EXCEPT: A. municipal salespersonsB. total dollar amount of the transactionD. Customer account statementsD. Initial offering price of each maturity but not spread B. It also sets rules for the conduct of customer accounts, including the items that should be considered when determining the suitability of recommendations to customers. The yield at which the transaction was effected and the resulting dollar priceB. Under MSRB rules, when a municipal dealer acts in an agency capacity, the price charged must be representative of the market for that type of security. Each Municipal TransactionC. If the Final is not going to be prepared, but a Preliminary Official Statement is available, then this document must be sent. All Primary and Secondary transactions. It does not include competitive bid underwritings, because the decision of the underwriter cannot be influenced.. The MSRB requires that such complaints be handled under the supervision and review of the municipal securities principal; and that records of complaints with their resolution (if any) be retained for 6 years (FINRA only requires a 4-year retention period for complaint records). It gives municipal investors access to municipal disclosure documents and municipal price reporting at no charge. However, statements made in advertising cannot be fraudulent. Which statement is TRUE about this? Which statement is TRUE? The Municipal Securities Rulemaking Board was created in 1975 to formulate rules to regulate all firms transacting business in municipal securities. The examination procedures contained in this booklet highlight significant aspects of the MSRB's rules. The MSRB is empowered to regulate municipal market participants - municipal brokers, dealers, and banks that deal in municipal bonds. municipal securities firm employing the MFP is banned for 2 years from engaging in municipal securities business with that issuer. A. SpreadB. If the bond is reoffered at 6.90%, the dealer is reducing the yield by .10 from the stated 7.00 yield. Customer account statementsD. Since this firm effects trades solely on an agency basis, it carries no inventory and is not a market maker. The Municipal Securities Rulemaking Board ( MSRB) is a United States self-regulatory financial organization that writes investor protection rules and other rules regulating broker-dealers and banks in the municipal securities market. Acting as a brokers broker for a large block of bonds that the investment company wishes to sellC. A registered representative wants to invite an individual to join him in the suite to watch the game. If a non-MFP, such as a typical registered representative, gives a political contribution of any amount to an elected officials campaign in which he or she is, or is not, entitled to vote, this will not trigger a ban! A General Principal or a Municipal Securities Principal. The Securities Acts Amendments of 1975 which established the Municipal Securities Rulemaking Board allow the MSRB to do all of the following EXCEPT create regulations: A. covering municipal related recordkeepingB. This is the situation in this question. 34-97423. Note that the MSRB writes rules for municipal market participants; but cannot enforce its own rules. There is no requirement to obtain a pre-set number of quotes nor is there a requirement to direct the customer to a dealer that physically has those bonds. This action will result in a 2-year ban on the municipal broker-dealer conducting municipal securities business with that issuer because the individual was not entitled to voteC. There is no spread disclosure on competitive bid offerings. A municipal bond dealer typically engages in which of the following activities? There is no requirement to provide a client with a copy of the Official Statement prior to executing a secondary market trade. If this occurs, the municipal firm is banned from doing municipal securities business with that municipal issuer for 2 years. Municipal securities business includes acting as a financial advisor to that issuer or performing negotiated underwritings for that issuer. The municipal broker-dealer has its headquarters in the municipality whose bonds are being recommendedC. The MSRB regulates all of the following EXCEPT: A. municipal brokersB. Which statement is TRUE regarding the enforcement of MSRB rules for broker-dealers? Which statement is TRUE? Which statement(s) is (are) TRUE? Upon customer request, a dealer in a competitive municipal syndicate must disclose: A. the spread taken by the underwritersB. The Official Statement is required to be delivered only to those customers who request one in writing. There is no requirement to disclose the names of the underwriters (though this information is readily available) nor their participation amounts (since this in no way affects the customer). None of the above. A municipal dealer is reoffering 7% bonds which were bought at par. The MSRB does not require any filing of advertising, and advertisements can be placed in any medium. However, unsolicited transaction are still permitted. There is no requirement to obtain a pre-set number of quotes. There is no requirement to notify the MSRB about the complaint. not disclosing the spread on reofferings of competitively bid issuesC. It does not include competitive bid underwritings, because the decision of the underwriter cannot be influenced.. This action will result in a 2-year ban on the municipal broker-dealer conducting municipal securities business with that issuer because the amount exceeded $250B. This is prohibited for both competitive bid and negotiated underwritings. Consider this to be a learning question about EMMA (Electronic Municipal Market Access). To do so, the individual must pass the principals exam. Any registered representative at a member firm is excluded from the definition of a Municipal Finance Professional and is exempt from the political contribution rule. Non-MFPs are not in a position to use campaign contributions as payment to an issuer official in return for getting future underwritings or financial advisory work from that municipality - so the rule does not apply. Trade comparisonsB. Under MSRB rules, a registered representative is prohibited from sharing in the gains and losses of a customers account unless the: A. registered representative has made a written guarantee of performance to the customerB. To buy the municipalitys bonds into discretionary accounts, specific customer authorization is required. An MFP (Municipal Finance Professional) gives $100 to the primary campaign of an elected official in which she is entitled to vote. Taking this individual to dinner is permitted because it has a de minimis value under the MSRB Political Contribution ruleC. A Financial and Operations Principal only C. Municipal Securities Rulemaking BoardD. . not disclosing the spread on reofferings of competitively bid issuesC. Any registered representative at a member firm is defined as Municipal Finance Professional and is subject to the political contribution ruleD. Thus, there is an inherent conflict of interest between the two. hosting a political reception for an issuer official on the dealers premisesC. There is no requirement to disclose the names of the underwriters nor their participation amounts. It regulates municipal brokers and dealers, including bank dealers in the municipal market. In addition, if an MFP gives ANY amount to an elected officials campaign in which he or she is not entitled to vote, this will result in a ban. The financial advisor is prohibited from acting as the underwriter in the bond offering. Sharing in a customer account is prohibited unless the registered representative opens a joint account with the customer; shares in gain and loss in proportion to the capital contributed; and gets written approval for the account from the principal. Under MSRB rules, the Chairman is considered to be a(n): A. affiliated personB. If the MSRB received a copy, they couldnt do anything anyway, since they dont have enforcement power. This action will not result in a 2-year ban on the municipal broker-dealer conducting municipal securities business with that issuer because the amount involved is under the de minimis exemption. If the customer alleges in a complaint that there has been a monetary loss, the MSRB must be notifiedC. FINRA has prepared a chart that summarizes . I, III, and IVD. Which statement is TRUE? May 2, 2023. Buying the securities issued by an investment company to fill existing customer orders. Enforcement is performed by the banking and securities regulators. Any municipal principal that supervises these functions is also an MFP. If the amount given is more than $250, or if ANY dollar amount is given to an elected officials campaign in which the MFP is not entitled to vote (as in this case), then the municipal broker-dealer is banned from doing negotiated underwritings and municipal financial advisory work for that municipality for 2 years. There is no requirement to disclose the bonds rating on the confirmation. There is a violation of Rule G-37 because the contribution was made to a campaign where the MFP is not entitled to voteC. Please note that instead of choosing arbitration, the customer could bring action in court, as long as the customer did not sign an arbitration agreement when the account was opened. Finally, the entertainment must comply with the firms policies and procedures - which is the case here because the firm is hosting the event. A. New AccountC. covering delivery of disclosure documents on new issues (Official Statements)C. setting maximum mark-ups and commissionsD. Control relationships must be disclosed in writing to customers who buy those bonds either at, or prior to, confirmation of sale. Capacity in which the broker-dealer actedD. All of the following statements are true regarding municipal advertising EXCEPT: A. all municipal advertising must be approved by either the Municipal Principal or General Principal prior to useB. $50 baseball mittB. Federal Reserve BoardD. The municipal principal must retain a file of all customer complaints with their resolution. $100 cashD. A registered representative wants to invite an individual to join him in the suite to watch the game. suitability requirements for making recommendations of municipal securities. II or IIID. A non-MFP (non-Municipal Finance Professional) contributes $300 to an elected officials campaign in which he is not entitled to vote. 10Qs and 10Ks.
Federal Register :: Self-Regulatory Organizations; Municipal Securities Municipal Securities Rulemaking BoardC. Municipal securities advertising may be approved prior to use by which of the following? If the customer refuses to disclose significant financial information, no trades can be madeD. A municipal securities firm based in Los Angeles that effects transactions solely on an principal basis places the following advertisement in the local newspaper: We Search The Market To Buy Bonds To Fill Your Orders At The Lowest Price!. Under MSRB rules, which of the following records is NOT required to be kept for specified time periods? A. sell short the security to the customerB. There is no required spread disclosure for competitive bid issues because the spread is very thin on such offerings. negotiate with the issuer to be the underwriter on a revenue bond offeringD. (Note: unsolicited transactions would still be acceptable.). The MSRB does NOT regulate which of the following? If a municipal finance professional signs a check, whether the check was drawn on a joint account or not, and submits it as a contribution to an issuer official, then the municipal finance professional is deemed to have made the full contribution, regardless of any writing accompanying the check that provides or directs otherwise.Thus, all $500 is attributable to the MFP and this would result in a ban. If the bond is reoffered at 108, the dealer is taking an 8% mark-up. The MSRB rule on this is simple - the financial advisor cannot be the underwriter. Under MSRB rules, confirmation disclosure for bonds sold at par must include all of the following EXCEPT: A. whether the securities are callableB. I, II, IVD. To show her support for her friend, the MFP sends a $150 check to her election campaign. MSRB may refer to: Karl G. Maeser Building, Brigham Young University; Municipal Securities Rulemaking Board, an organisation; Peptide-methionine (R)-S-oxide reductase (MsrB), an enzyme; See also. Because the contribution exceeds $250, the municipal securities firm will be subject to a 2-year ban on engaging in municipal securities business with that issuerC.
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