MSRB Rule G-12: Uniform Practice and Close-Out Procedures

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Target Audience:                                                                                            

  • Broker-dealers

Learning Objectives:

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

  • Apply dealer obligations under MSRB Rule G-12 related to clearance, comparison and settlement of municipal securities transactions;
  • Identify the regular-way settlement process;
  • Distinguish different types of transaction settlement dates; and
  • Evaluate components for inter-dealer transactions eligible for comparison
Course Outline:

1. Introduction - Review Applicable MSRB Rules

a. MSRB Rule G-12: Uniform Practice
b. MSRB Rule G-8: Books and Records to be Made by Brokers, Dealers, and Municipal Securities Dealers
c. MSRB Rule G-27:  Supervision

2. Methods of Settlement
a. Settlement Dates
i. Non-automated transactions
b. Four Types of Settlement Dates
i. Cash
ii. Regular-way
iii. When, as and if issued
iv. All other transactions

3. Regular-Way Settlement Process
a. Trade
b. Clearance process
c. Comparison process
d. Settlement

4. Extended Settlement
a. Trade
b. Clearance process
c. Settlement

5. Matching Discrepancy
a. Clearance process
b. Comparison process
c. Delivery
d. Settlement

6. Unreported Trade
a. Clearance process
b. Confirmation process
c. Unrecognized transaction
d. Settlement

7. Partial Call
a. Clearance process
b. Partial delivery
c. Settlement

8. Close-Out of Open Inter-dealer Failed Transactions
a. Initial timeframe
b. Notification

9. Dealer Working with a Clearing Firm
a. Oversight of inter-dealer transactions
b. Clearance process
c. Settlement

10. Assessment