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MSRB Notice

Industry Preparations for Expiration of Three Hour Exception from Real-Time Transaction Reporting

The MSRB reminds dealers of the expiration dates of the three-hour exception to real-time transaction reporting and recommends that underwriters of municipal securities review the Depository Trust and Clearing Corporation’s (DTCC) planned New Issue Information Collection and Dissemination Service. 

Rule G-14 RTRS Procedures (a)(ii)(C) allows a dealer three hours to report a trade to the Real-Time Transaction Reporting System (RTRS) if the dealer: (i) does not have the CUSIP number and indicative data of the issue traded in the securities master file used by the dealer to process trades for confirmation, clearance and settlement; (ii) has not traded the security in the previous year; and (iii) did not act as a syndicate manager or syndicate member for the security (“three hour exception”).  For transactions on a when, as and if issued basis (“when-issued” transactions), the three-hour exception will expire on December 31, 2007 and for all other transactions (“secondary market” transactions), the three-hour exception will expire on December 29, 2006.[1]           

To report a transaction that currently qualifies for the three hour exception to RTRS within fifteen minutes of the time of trade, dealers will need to have improved access to securities information.  When-issued transactions are of particular concern since the dealer’s source for securities information, generally an information vendor, may not have the information necessary for real-time trade processing and reporting at the time of trade. 

Vendors of securities information currently obtain much of their information on new issue securities through voluntary cooperation from underwriters.  To facilitate the dissemination of information on new issues of municipal securities and to help ensure that fifteen minute reporting can be achieved for new issue securities, The Bond Market Association (TBMA) and DTCC are currently working on a project that will centralize the collection of new issue securities data and redistribute that information on to vendors in an electronic real-time format.  Under this plan, underwriters will be required to submit comprehensive information about a new issue of municipal securities to DTCC electronically for immediate redissemination to vendors.  This project is scheduled for implementation in mid-2007, and information on the project may be found at  In addition, DTCC representatives will be presenting, or available at the DTC booth, at a number of industry conferences.  Please review the DTCC Reengineering web-site under industry presentations, Calendar of Events for details.  The MSRB recommends that underwriters review and keep current on the status of the project to help prepare for the elimination of the three hour exception for when-issued trades in 2007.

Questions about this notice may be directed to Justin Pica, Uniform Practice Specialist.  Questions about the DTCC New Issue Information Collection and Dissemination Service should be directed to Peter Inguanta, DTCC’s Director of Product Marketing and Development for Underwriting at (212) 855-5696 or

April 24, 2006

[1] See “ SEC Approves proposed Rule Change to MSRB Rule G-14 RTRS Procedures, Paragraph (a)(ii)(C) to Extend the Expiration Date of the Three-Hour Exception,” MSRB Notice 2005-62 (December 22, 2005).