Overview of MSRB Rule G-47
Rule G-47 (“Rule”) requires brokers, dealers, and municipal securities dealers (collectively, “dealers”) to disclose to their customers, at or prior to the time of a municipal bond trade, all material information known about the transaction, as well as material information about the security that is reasonably accessible to the market. Information is considered to be material if there is a substantial likelihood that the information would be considered important or significant to a reasonable investor’s decision to invest. The Rule currently includes a non-exhaustive list of information that is generally considered material, including OID and other factors.
Municipal Bond Transaction Disclosure Checklist
To assist you in complying with this requirement and documenting the sources used for disclosure, ESI Operations has created a Municipal Bond Transaction Disclosure Checklist.
The checklist is required on all transactions (both buy and sell orders, whether solicited or unsolicited) and must be uploaded to the applicable client folder in Docupace. The form should be completed at time of trade and uploaded by the end of the trade date. ESI’s trading group reviews this activity on a T+1 basis and will periodically reach out for this form if it is not filed in Docupace. Failure to upload the form within the required timeframe could result in reversal of any mark-up/down on the associated transaction(s) and could result in additional disciplinary action by the Firm.
Please note that information sources used to make required disclosures to the customer must be maintained in the representatives’ client file. If the client file is solely maintained electronically in Docupace, the information sources used must be uploaded into Docupace.
Questions
If you have questions regarding the procedure for Municipal Bond Transactions, please contact the Trading Desk at 1-800-344-7437.
TC131573(0223)1