MSRB retires guidance on inter-dealer confirmations

Bonds

The Municipal Securities Rulemaking Board has retired nine separate pieces of interpretive guidance related to Rule G-12(c) on inter-dealer confirmations following the board’s request for comment on the rule.

The move follows recent comments submitted by the Securities Industry and Financial Markets Association that urged the board to knock out the provision altogether, and the board specifically cites comments received in its notice, which urged the MSRB “to prioritize addressing guidance not being incorporated into the rule before taking further action on related initiatives noted in the RFC,” SIFMA said.

“The MSRB is retiring nine pieces of interpretive guidance that, at their respective times of publication, were designed to address a novel or frequently asked question but are now believed to have limited utility in the present market, are considered outdated due to current market practices or otherwise superfluous,” the MSRB said.

“The MSRB is retiring nine pieces of interpretive guidance that, at their respective times of publication, were designed to address a novel or frequently asked question but are now believed to have limited utility in the present market, are considered outdated due to current market practices or otherwise superfluous,” the MSRB said.

MSRB Rule G-12 on uniform practice establishes the industry standards for the processing, clearance and settlement of transactions between municipal securities dealers. Subsection Rule G-12(c) on inter-dealer confirmation has become obsolete over the years due to the vast majority of transactions being eligible for automated comparison following the general electronification of systems, SIFMA said.

Sections of Rule G-12 being retired are confirmation disclosures on put option bonds, tender option bonds with adjustable tender fees, and advance refunded securities, in addition to confirmations on the mailing of WAll confirmations, all established by the MSRB in the 1980s.

Along with those are the certain pieces of MSRB Rule G-15 on written confirmations that are also being retired such as pricing to call on callable securities, pricing transactions on construction loan notes, pricing as part of an agency transaction and securities descriptions on prerefunded securities.

The board requested comment on Rule G-12(c) specifically in September 2023 and only received comments from SIFMA.

Questions on the matter may be directed at the MSRB’s senior associate director of market regulation Abha Mohla.

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