Rule G-48 Transactions with Sophisticated Municipal Market Professionals

Upcoming Changes

Amendments to Rule G-48 will be 

A broker, dealer, or municipal securities dealer’s obligations to a customer that it reasonably concludes is a Sophisticated Municipal Market Professional, or SMMP, as defined in Rule D-15, shall be modified as follows:


(a) Time of Trade Disclosure. The broker, dealer, or municipal securities dealer shall not have any obligation under Rule G-47 to ensure disclosure of material information that is reasonably accessible to the market.

(b) Transaction Pricing. The broker, dealer, or municipal securities dealer shall not have any obligation under Rule G-30(b)(i) to take action to ensure that transactions meeting all of the following conditions are effected at fair and reasonable prices:

(i) the transactions are non-recommended secondary market agency transactions;

(ii) the broker, dealer, or municipal securities dealer’s services with respect to the transactions have been explicitly limited to providing anonymity, communication, order matching, and/or clearance functions; and

(iii) the broker, dealer, or municipal securities dealer does not exercise discretion as to how or when the transactions are executed.


(c) Suitability. The broker, dealer, or municipal securities dealer shall not have any obligation under Rule G-19 to perform a customer-specific suitability analysis.
(d) Bona Fide Quotations. The broker, dealer, or municipal securities dealer disseminating an SMMP’s “quotation” as defined in Rule G-13, which is labeled as such, shall apply the same standards regarding quotations described in Rule G-13(b) as if such quotations were made by another broker, dealer, or municipal securities dealer.
(e) Best Execution. The broker, dealer, or municipal securities dealer shall not have any obligation under Rule G-18 to use reasonable diligence to ascertain the best market for the subject security and buy or sell in that market so that the resultant price to the SMMP is as favorable as possible under prevailing market conditions.