MSRB Receives SEC Approval on Priority of Orders Proposal

Date: August 15, 2010

Contact: Jennifer Galloway, Chief Communications Officer
             (703) 797-6670


Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) has received approval from the Securities and Exchange Commission of its proposed rule change concerning priority of orders in primary offerings. The measure seeks to increase the distribution of new issues of municipal bonds to investors in the primary market by ensuring that underwriters follow provisions that generally give priority to customer orders over those for their own account.

The changes are effective for new municipal securities issues with a “time of formal award,” as defined in MSRB Rule G-34, after October 12, 2010. The “time of formal award” typically occurs on the sale date.

Under the new rules, underwriters are required to give priority to orders from customers over orders for their own accounts and orders from affiliates or other related accounts, unless specific exceptions apply. Underwriters that fail to follow issuers’ directions concerning retail order periods may violate Rule G-17, on fair dealing. 

To assist in enforcement of these rules, underwriters must keep records when they deviate from these customer priority rules and their reasons for doing so, as well as records of those issues for which there are retail order periods and the issuers’ definition of “retail,” if any. Records of all orders, filled or unfilled, must be retained for six years.


The MSRB protects investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. The MSRB fulfills this mission by regulating the municipal securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. To further protect market participants, the MSRB provides market transparency through its Electronic Municipal Market Access (EMMA®) website, the official repository for information on all municipal bonds. The MSRB also serves as an objective resource on the municipal market, conducts extensive education and outreach to market stakeholders, and provides market leadership on key issues. The MSRB is a self-regulatory organization governed by a 21-member board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is overseen by the Securities and Exchange Commission and Congress.