Suitability and Time-of-Trade Disclosure for Municipal Securities Transactions

Read the learning objectives and topics covered in this MuniEdPro® course. Log into MuniEdPro®.

Target Audience

  • Broker-dealers

Learning Objectives

At the end of this course, learners will be able to:

  • Determine the suitability of recommendations under MSRB Rule G-19;
  • Identify time-of-trade disclosures under MSRB Rule G-47; and
  • Distinguish obligations related to transactions with Sophisticated Municipal Market Professionals (SMMP) and non-SMMP customers.

Course Outline

1. Introduction
a. Day in the Life of a Financial Advisor
i. Research investment products and determine suitability
ii. Practice making suitability recommendations and providing disclosure

2. Review the Rules – Getting Acquainted with MSRB Rules
a. Preservation of Records: MSRB Rule G-9
b. Book and Records: MSRB Rule G-8
c. Conduct of Municipal Securities and Municipal Advisory Activities: MSRB Rule G-17
d. Suitability of Recommendations and Transactions: MSRB Rule G-19
e. Time of Trade Disclosure:  MSRB Rule G-47
f. Transactions with Sophisticated Municipal Market Professionals (SMMPs): MSRB Rule G-48
g. Sophisticated Municipal Market Professional: MSRB Rule D-15

3. Knowledge Check Scenarios - Do You Know the Rules? 
a. Time-of-trade disclosure obligations
b. Suitability obligations
c. Disclosure obligations
d. SMMP obligations  

4. A New Customer
a. Reviewing customer profiles

5. Existing Customer Request
a. Disclosure and recommendation decisions
b. Customer-specific suitability
c. Documentation
d. Material information
e. Reasonable diligence
f. Reasonable-basis suitability
g. Recommendation process
h. SMMP requirements
i. Time of trade disclosure obligations

6. Change of address and recommendations
a. Customer-specific suitability
b. Maintenance of customer profiles
c. Recommendation process
d. Tax implications of municipal securities

7. Changing Circumstances
a. Customer-specific suitability
b. Documentation
c. Reasonable diligence

8. Assessment