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"List Offering Price" and Three-Hour Exception for Real-time Transaction Reporting: Rule G-14
The MSRB has received questions concerning the meaning of "list offering price" in Rule G-14 Real-Time Transaction Reporting Procedures. As used in this context, the term means the publicly announced "initial offering price" at which a new issue of municipal securities is to be offered to the public.
Real-time transaction reporting requires dealers to report most transactions within fifteen minutes of the time of trade execution. Transactions effected at the "list offering price" by syndicate or selling group members on the first day of trading in a new issue are eligible for an exception found in Rule G-14 RTRS Procedures section (a)(ii)(A). Such transactions instead are required to be reported by the end of the day. Note that syndicate and selling group members are not required to wait to report such transactions at the end of the day and may choose to report prior to the end of the day.
The exception from fifteen-minute transaction reporting for list-price syndicate trades is based on operational difficulties that otherwise might be presented for dealers when large numbers of transactions at the initial offering price must be reported by a dealer at one time. The MSRB viewed these operational considerations as sufficiently important to allow trades to be reported at the end of the day given that the price of such trades (the "list offering price") is public. Note that transactions by syndicate or selling group members at prices other than the "list offering price" on the first day of trading in a new issue are required to be reported within fifteen minutes of the time of trade execution. For example, transactions between the syndicate manager and syndicate members ("takedown" transactions) that are at prices other than the "list offering price" must be reported within fifteen minutes of the time of execution. Similarly, transactions done at offering prices that have not been publicly announced, e.g. "not reoffered" prices, also must be reported within fifteen minutes of the time of execution since these prices are not public.
Questions also have been asked about the availability of the three-hour trade reporting exception found in Rule G-14 RTRS Procedures section (a)(ii)(C). When a dealer effects a trade in an issue it has not traded in the past year and does not have CUSIP numbers and indicative data for the issue in its securities master file used to process trades for confirmations, clearance and settlement, it is allowed three hours to report. This exception is designed to allow a dealer time to set-up a security it has not traded and is available for transactions on the first day of trading in a new issue. Note this exception is not available for syndicate and selling group members.
 Rule changes to MSRB Rules G-14, on transaction reporting, and G-12(f), on automated comparison of inter-dealer transactions, that will require dealers to report transactions in real-time become effective January 31, 2005. See MSRB Notice 2004-36 (November 17, 2004) on www.msrb.org.
 References to "syndicate and selling group members" in this context are meant to include managers of syndicates as well as sole underwriters or placement agents in non-syndicated offerings.
 The three-hour exception sunsets one year after real-time transaction reporting is implemented.
Automated Comparison and Transaction Reporting of Certain Inter-Dealer Transactions in When-Issued Municipal Securities: Rules G-12(f) and G-14
The MSRB has received reports of problems with automated comparison and transaction reporting of certain inter-dealer transactions involving syndicate managers. These reports indicate that some dealers may have incorrectly identified some of their when, as and if issued ("when-issued") transactions in new issue municipal securities as "syndicate transactions." The MSRB reminds dealers that erroneous coding of comparison reports is a violation of Rule G-14, on transaction reporting, and that transactions with dealers that are not members of the syndicate or selling group for a new issue, by definition, cannot be considered "syndicate transactions" for purposes of comparison procedures.
MSRB Rule G-12(f), on automated comparison of inter-dealer transactions, requires dealers to submit for automated comparison all transactions eligible for comparison under National Securities Clearing Corporation's (NSCC) rules and procedures. For transactions by a syndicate manager with syndicate or selling group members, NSCC procedures call for the use of a special "syndicate" submission, which does not require a submission by the contra-side for comparison to occur. Transactions between syndicate managers and dealers that are not members of the syndicate or selling group are not "syndicate transactions" under NSCC's rules and procedures and both the selling and purchasing dealers are required to report its side to the transaction for automated comparison.
Various problems arise in the comparison process if the parties to a trade do not follow the correct procedures for comparison of the trade. Moreover, since the trade report submitted for comparison also serves as the transaction report to the MSRB, identifying a transaction as a "syndicate transaction" in trade reports, when such transaction is not a syndicate transaction under NSCC's rules and procedures, represents a violation of a dealer's obligation to accurately report transactions to the MSRB under Rule G-14.
 See "Municipal Bond Selling Group Trades," NSCC Important Notice # 2971 dated April 8, 1988.