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Contact: Jennifer A. Galloway, Chief Communications Officer


Washington, DC – The Municipal Securities Rulemaking Board (MSRB) today clarified existing guidance on MSRB Rule G-18, which requires dealers to seek the most favorable terms reasonably available for retail customer transactions in municipal securities. The updated guidance specifically addresses the practice of dealers posting a solicitation for bids simultaneously through multiple trading platforms or broker’s brokers as it relates to dealers’ best-execution obligations.

“Clarifying guidance is always important to help ensure understanding of and regulatory compliance with our rules,” said MSRB Chief Regulatory Officer Lanny Schwartz. “In the years since the best-ex rule took effect, we’ve had the opportunity to engage with market participants about its practical implications. Today we are amending our guidance appropriately as a result of feedback we received, both informally and through the formal comment process.”

Since best-execution requirements in the municipal securities market went into effect in 2016, some market participants have communicated that the practice of soliciting a bid-wanted for a municipal security simultaneously on multiple alternative trading systems (ATSs) or via multiple broker’s brokers may have harmful effects on dealers, investors and the municipal market. A bid-wanted is an announcement of an investor’s plan to sell a security in order to solicit bids from interested parties. This simultaneous posting is not prohibited by Rule G-18 and the practice—depending on the specific situation—may be consistent with a dealer’s best-execution obligation and be beneficial to customers.

The MSRB today is amending existing guidance to further clarify that a dealer is not required to put out a bid-wanted with multiple fixed income ATSs or broker’s brokers to meet its best-execution obligations (though this may be warranted in some cases) or subscribe to every ATS. The amended guidance also addresses the fact that a single ATS or broker’s broker can provide exposure to multiple dealers and therefore multiple markets under Rule G-18.

The Municipal Securities Rulemaking Board (MSRB) protects and strengthens the municipal bond market, enabling access to capital, economic growth, and societal progress in tens of thousands of communities across the country. The MSRB fulfills this mission by creating trust in our market through informed regulation of dealers and municipal advisors that protects investors, issuers and the public interest; building technology systems that power our market and provide transparency for issuers, institutions, and the investing public; and serving as the steward of market data that empowers better decisions and fuels innovation for the future. The MSRB is a self-regulatory organization governed by a 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.