New Issue Municipal Securities Trade Reporting

SIFMA provides comments to the Municipal Securities Rulemaking Board (MSRB) on a request for extension of 3-hour exception for new issue municipal securities trade reporting.  In MSRB Notice 2005-03, it was noted that two exceptions in Rule G-14 apply to certain transactions executed on the first day of trading in a new issue. The first exemption applies to syndicate managers and members that effect trades at list offering price, and provides that they may report trades by the end of the first day of trading. The second exemption provides relief for dealers that are not syndicate managers or members, have not traded an issue in the previous year, and do not have the CUSIP information or indicative data for that issue in their security master file (the “3-hour exception”). The second exemption was scheduled to sunset on December 31, 2006, but was extended to December 31, 2007 for “when, as and if” issued transactions.

SIFMA’s concern is with the imminent lapsing of the second exemption in light of delays in the system being designed to disseminate new issue information.