Do a banks transactions in municipal fund securities have to comply with Commission and MSRB rules?
Answer #16: Banks must register as municipal securities dealers to deal in municipal securities that States issue to provide tax-favored vehicles for educational savings, such as 529 plans. All those banks’ municipal securities activities including municipal fund securities transactions in which the bank acts solely as an agent must conform with MSRB rules and all Commission rules that apply to municipal securities dealers. On the other hand, if a bank does not act as a dealer in municipal securities, then the bank may engage in agency transactions involving municipal fund securities without registering with the Commission and registering with the MSRB.
Related Questions
- Are Municipal Fund Securities subject to the requirements of MSRB Rules G-36 (official statements) and G-32 (disclosures in connection with new issues)?
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