MSRB Issues Guidance on ARS Buybacks

Date: September 2, 2008

Contacts:          Lynnette Kelly Hotchkiss, Executive Director
                        (703) 797-6600

                        Jennifer A. Galloway, Chief Communications Officer
                        (703) 797-6600


Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) today reminded dealers to report buybacks of municipal auction rate securities to the MSRB as they would ordinary auction-rate transactions.  The MSRB is also taking this opportunity to note that ARS buyback transactions will be transparent in public MSRB trade data available on the Electronic Municipal Market Access system, or EMMA. 

A number of securities dealers recently announced programs to buy back auction rate securities from customers, largely as a result of settlement agreements with state attorneys general.  However, the additional trade volume represented by ARS buybacks does not necessarily represent a recovery of the ARS market from the unprecedented number of failed ARS auctions this year. Consequently, this trade data may not reflect the market value of these securities.

To view the MSRB’s notice to dealers, click here.


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.