Municipal Market 101
Want to know how state and local governments often
pay for public projects such as bridges, roads and schools?
Follow a city as it borrows money from investors to pay for a
new school. Then, learn more about the $4 trillion municipal
bond market and how its primary regulator, the Municipal
Securities Rulemaking Board, protects the city and its investors
along the way.
City
Decides to Issue Bonds
City uses MSRB Education Center to learn about the
issuance process.
City decides whether to hire a municipal
advisor. If no, skip ahead two spaces.
City Hires Municipal Advisor
Municipal advisors owe a fiduciary duty to put
City’s interest first.
City Selects Underwriter
Underwriter must deal fairly with City and investors and offer a fair
price.
City determines priority of orders from investors.
Underwriter provides City’s Preliminary Official Statement to
investors.
Underwriter Sells Bonds to Investors
City Has Money for New School
MSRB Education Center resources help City understand
disclosure obligations.
City Makes Ongoing Continuing Disclosures
Investors use EMMA to access information about
City’s bonds.
City Pays Interest Until Bonds Mature
City Repays Principal at Maturity
Real-time trade prices available on EMMA.
Brokers Report Trades to EMMA
Brokers must give suitable recommendations,
disclose risks and provide a fair price for investors.
Investors Trade Bonds Through Brokers
Investors learn about buying and selling bonds in
the MSRB Education Center.
MSRB ROLE
-
Regulation of Municipal Advisors, Underwriters
and Broker-Dealers
-
Transparency through Electronic Municipal
Market Access (EMMA®) Website
-
Resources in MSRB Education Center
Players
-
City Officials
-
Investors
-
Municipal Advisor
-
Underwriter
-
Broker-Dealer
Finish
