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Notice 2024-15 - Request for Comment
Publication date: | Comment due:
Information for:

Dealers, General Public, Investors, Issuers, Municipal Advisors

All Comments to Notice 2024-15

  1. ABLE Savings Plan Network: Letter from Bette Ann Mobley, Chair, dated April 10, 2025
  2. AKF Consulting Group: Letter from Andrea Feirstein, Managing Director, and Mark Chapleau, Senior Consultant, dated April 11, 2025
  3. Arizona State Treasurer’s Office: Letter from Kimberly Yee, Treasurer, dated April 10, 2025
  4. Ascensus: Letter from Christal Fenton, Associate General Counsel, dated April 10, 2025
  5. Bank of North Dakota: Email from James Barnhardt dated April 3, 2025
  6. College Savings Foundation: Letter from Chris McGee, Chair, dated April 9, 2025
  7. College Savings Plans Network: Letter from Mary G. Morris, Chair, dated April 2, 2025
  8. Commonwealth Savers Plan: Letter from Mary G. Morris, Chief Executive Officer, dated April 11, 2025
  9. First Public, LLC: Email from Bill Mastrodicasa dated April 11, 2025
  10. Government Finance Officers Association: Letter from Emily Brock, Director of Federal Liaison Center, dated June 3, 2025
  11. Illinois State Treasurer’s Office: Letter from Michael W. Frerichs, Treasurer, dated April 10, 2025; and Letter from Michael Frerichs, Treasurer, dated April 10, 2025
  12. Investment Company Institute:  Letter from Tara Buckley, Deputy General Counsel, Financial Regulation, and Shannon Salinas, Associate General Counsel, Retirement Policy, dated April 11, 2025
  13. Massachusetts Educational Financing Authority: Letter from Thomas M. Graf, Executive Director, dated April 9, 2025
  14. my529: Letter from Richard K. Ellis, Executive Director, dated March 31, 2025
  15. Nebraska State Treasurer’s Office: Letter from Rachel Biar, Deputy State Treasurer for Savings Programs, dated April 2, 2025
  16. Pennsylvania Treasury Department: Letter from Stacy Garrity, Treasurer, dated April 2, 2025
  17. Securities Industry and Financial Markets Association: Letter from Leslie M. Norwood, Managing Director and Associate General Counsel, and Gerald O’Hara, Vice President and Assistant General Counsel, dated April 11, 2025
  18. TIAA-CREF Tuition Financing, Inc: Letter from Christopher S. Lynch, President, dated April 10, 2025
  19. Vestwell: Letter from Aaron Schumm, Chief Executive Officer, dated April 11, 2025
Notice 2024-14 - Request for Comment
Publication date: | Comment due:
Information for:

Dealers, General Public, Municipal Advisors

All Comments to Notice 2024-14

  1. American Securities Association: Letter from Jessica R. Giroux, General Counsel and Head of Fixed Income Policy, dated January 28, 2025
  2. Bond Dealers of America: Letter from Michael Decker, Senior Vice President, dated January 28, 2025
  3. ICE Bonds Securities Corporation: Letter from Robert Laorno, General Counsel, dated January 21, 2025
  4. National Association of Municipal Advisors: Letter from Susan Gaffney, Executive Director, dated January 28, 2025
  5. Public Resources Advisory Group, Inc.: Letter from Thomas F. Huestis, Senior Managing Director, dated January 27, 2025
  6. Securities Industry and Financial Markets Association: Letter from Leslie M. Norwood, Managing Director and Associate General Counsel, and Gerald O’Hara, Vice President and Assistant General Counsel, dated January 28, 2025
Notice 2024-13 - Informational Notice
Publication date:
Information for:

Dealers, General Public, Investors, Issuers, Municipal Advisors

Notice 2024-12 - Approval Notice
Publication date:
Notice 2024-09 - Request for Comment
Publication date: | Comment due:
Information for:

Bank Dealers, General Public, Investors

Rule Number:

Rule G-7, Rule A-12

All Comments to Notice 2024-09

  1. Association of Registration Management, Inc.: Letter from Richard Izzo, President, dated August 5, 2024
  2. Bond Dealers of America: Letter from Michael Decker, Senior Vice President, dated August 5, 2024
  3. Frost Bank Capital Markets Division: Letter from Jeff Beckel, SEVP and Director of Capital Markets, dated July 30, 2024
  4. Frost Bank Capital Markets Division: Email from Trevor Cross dated July 30, 2024
  5. Securities Industry and Financial Markets Association: Letter from Leslie M. Norwood, Managing Director and Associate General Counsel, Head of Municipal Securities, dated August 5, 2024
Notice 2024-08 - Informational Notice
Publication date:
Notice 2024-07 - Informational Notice
Publication date:
Information for:

Bank Dealers, Dealers, General Public, Investors

Rule Number:

Rule G-12, Rule G-15

Notice 2024-06 - Informational Notice
Publication date:
Notice 2024-05 - Informational Notice
Publication date:
Notice 2024-04 - Informational Notice
Publication date:
Notice 2024-02 - Informational Notice
Publication date:
Notice 2024-01 - Informational Notice
Publication date:
Interpretive Guidance - Interpretive Notices
Publication date:
Supervisory Responsibility of Municipal Securities Principals and Municipal Securities Sales Principals
Rule Number:

Rule G-27

The Board has received questions concerning the appropriate allocation of supervisory responsibility between municipal securities principals and the new category of municipal securities sales principals. The Board recently amended its rule G-3 to permit a person associated with a securities firm whose activities with respect to municipal securities are limited to supervising sales to and purchases from customers to qualify as a "municipal securities sales principal" ("sales principal"). The Board also amended rules G-8 on recordkeeping, G-26 on the administration of customer accounts, and G-27 on supervision to permit securities firms to designate sales principals as responsible for certain supervisory functions insofar as they relate directly to transactions in municipal securities with customers.

In particular, rule G-27 concerning supervision requires municipal securities dealers to designate at least one municipal securities principal as responsible for supervising its municipal securities activities, including the municipal securities activities of branch offices or similar locations. In addition, rule G-27 permits the municipal securities dealer to designate a sales principal (e.g., a branch office manager) as responsible for the "direct supervision of sales to and purchases from customers." The rule also requires that a dealer adopt written supervisory procedures which, among other matters, reflect the delegation of supervisory authority to these personnel.

As a result of these amendments, in designating under rule G-27 one or more municipal securities principals as responsible for supervising the business and activities of the firm’s associated persons, a securities firm may choose to designate a qualified sales principal with limited responsibility for the direct supervision of sales to and purchases from customers. If so, the firm’s written supervisory procedures may allocate responsibility to a sales principal for reviewing and approving (to the extent that they relate to sales to and purchases from customers) the suitability of the opening of, and transactions in, customer accounts, the handling of customer complaints and other correspondence, and other matters permitted by Board rule to be reviewed or approved by a sales principal. A municipal securities principal, however, must be responsible for directly supervising the firm’s other municipal securities activities such as underwriting, trading, and pricing of inventories.

With respect to the relationship between a sales principal and the designated municipal securities principal, Board rule G-27 provides that a branch office manager who acts as the sales principal for his office will be responsible for the municipal securities sales activities under his direct supervision. Rule G-27 also provides that a designated municipal securities principal will be responsible for all municipal securities activities of the branch office including those that may be under the direct supervision of a sales principal. However, the branch office manager, under the particular organizational structure of a firm, may be responsible to some other designated supervisor for the discharge of his other duties.

Interpretive Guidance - Interpretive Letters
Publication date:
Syndicate Records: Participations
Rule Number:

Rule G-8

Syndicate records: participations. This will acknowledge receipt of your letter of November 24, 1981 concerning certain of the requirements of Board rule G-8(a)(viii) regarding syndicate records to be maintained by managers of underwritings of new issues of municipal securities.

You note that this provision requires, in pertinent part, that,

[w]ith respect to each syndicate..., records shall be maintained ... showing ... the name and percentage of participation of each member of the syndicate or account...

You inquire whether this provision necessitates the designation of an actual percentage or decimal participation, or, alternatively,

whether a listing of the ... dollar participation [of each member] ... along with [the] aggregate par value of the syndicate meets the requirement ... of the Rule.

The rule should not be construed to require in all cases an indication of a numerical percentage for each member's participation, if other information from which a numerical percentage can easily be determined is set forth. The method you propose, showing the par value amount of the member's participation, is certainly acceptable for purposes of compliance with this provision of the rule. MSRB interpretation of December 8, 1981.

Interpretive Guidance - Interpretive Letters
Publication date:
Records of Original Entry: Unit System

Records of original entry: unit system. This will acknowledge receipt of your letter of November 20, 1981 concerning compliance with certain of the provisions of Board rule G-8 through the use of a "unit system" method of recordkeeping. In your letter you indicate that the bank wishes to maintain the record of original entry required under rule G-8(a)(i) in the form of a collection of duplicate copies of confirmations filed in transaction settlement date order; in addition, you enclose a copy of the confirmation form used by the bank. You inquire whether maintaining the record in this manner would be satisfactory for purposes of the rule.

In a July 29, 1977 interpretive notice on rule G-8 the Board stated:

Under rule G-8, records may be maintained in a variety of ways, including a unit system of recordkeeping. In such a system, records are kept in the form of a group of documents or related groups of documents....

A unit system of recordkeeping is an acceptable system for purposes of rule G-8 if the information required to be shown is clearly and accurately reflected and there is an adequate basis for audit. This would require in most instances that each record in a unit system be arranged in appropriate sequence, whether chronological or numerical, and fully integrated into the over-all recordkeeping system for purposes of posting to general ledger accounts.

Therefore, the type of recordkeeping system you propose may be used for purposes of compliance with rule G-8 if (1) the records show, in a clear and accurate fashion, all of the information that is required to be shown, and (2) the records are maintained in a form that provides an adequate basis for audit by bank employees or examiners. It is my understanding that recordkeeping systems similar to that which you propose have been inspected by banking regulatory authorities during examinations of other bank municipal securities dealer departments, and have been found to meet these two criteria.

In your letter you indicate that the confirmation form used by your bank "contains all the information needed" to meet the recordkeeping requirement. Our review of your form indicates that this is not the case. The rule requires the record of original entry to contain

an itemized daily record of all purchases and sales of municipal securities, all receipts and deliveries of municipal securities (including bond or note numbers and, if the securities are in registered form, an indication to such effect), all receipts and disbursements of cash with respect to transactions in municipal securities, [and] all other debits and credits pertaining to transactions in municipal securities ... The records of original entry shall show the name or other designation of the account for which each such transaction was effected (whether effected for the account of such municipal securities broker or municipal securities dealer, the account of a customer, or otherwise), the description of the securities, the aggregate par value of the securities, the dollar price or yield and aggregate purchase or sale price of the securities, accrued interest, the trade date, and the name or other designation of the person from whom purchased or received or to whom sold or delivered.

The confirmation form you enclosed does not appear to provide a space for notation of "the name or other designation of the account for which [the] transaction was effected." This information is distinct from "the name or other designation of the person from whom purchased ... or to whom sold ..." (which would appear in the "name and address" portion of your form) and requires an indication of the account, whether it be the bank's trading inventory or portfolio, or the contra-principal on an agency transaction, in which the securities were held prior to a sale or will be held subsequent to a purchase. For example, if the bank sells $100,000 par value securities from its trading account to "Mr. Smith", the record of original entry would reflect that this transaction was effected for the account of the [bank's] trading account. A subsequent sale of these securities effected as agent for the customer would be reflected on the record of original entry as for the account of "Mr. Smith."

I note also that, in addition to a record of purchase and sale transactions (which could easily be maintained in the form of duplicate copies of confirmations), the record of original entry must contain information about transactions cleared on the date of the record as well as cash disbursements and receipts. Your letter does not indicate how your bank would comply with these latter requirements. As you may be aware, other banks using unit recordkeeping systems use additional copies of the confirmation as "clearance" records, with information on receipts and deliveries of securities and movements of cash noted on these copies. These "clearance" records are then aggregated with the purchase and sale records to form a complete record of original entry.

In summary, the method of maintaining a record of original entry which your bank proposes can be used to comply with the requirements of the rule. Certain aspects of the information required by the rule are not contained on the document you propose to use, however, and provision would have to be made for inclusion of these items in the records before the system you propose would be satisfactory for compliance with the rule's requirements. MSRB interpretation of November 24, 1981.

Interpretive Guidance - Interpretive Letters
Publication date:
Syndicate Records
Rule Number:

Rule G-9

Syndicate records. I am writing in response to your letters of October 2 and October 19, 1981 concerning a particular recordkeeping arrangement used by an NASD-member firm in connection with its underwriting activities. In your letters you indicate that the firm conducts its underwriting activities from its main office and four regional branch office "commitment centers," with the committing branch offices authorized to commit to underwriting new issues on the firm's behalf. You inquire whether the firm is in compliance with the Board's recordkeeping and record retention rules if it maintains only part of the records on its underwritings in the main office. Correspondence from a field examiner attached to your letters indicates that the committing branch office originating a particular underwriting maintains all of the records with respect to such underwriting. The majority of these records are the original copies; the copies of confirmations, good faith checks, and syndicate settlement checks maintained at the committing branch office are duplicates of original records maintained at the firm's main office.

Rule G-9(d) requires that books and records shall be maintained and preserved in an easily accessible place for two years and shall be available for ready inspection by the proper regulatory authorities. The fact that the member firm does not maintain all records with respect to all of its underwriting activities in a single location does not contravene these provisions of Board rule G-9. Rule G-9 would permit the arrangement described in your letters, whereby a firm maintains copies of all of the records pertaining to a particular underwriting in the office responsible for that underwriting.

Thank you for your prompt assistance in providing the additional information we needed in order to respond to your inquiry. MSRB interpretation of October 21, 1981.

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