ABA Seeks Additional Tweak to MSRB Rule Exception

In comments filed with the Municipal Securities Rulemaking Board this week, the American Bankers Association welcomed the MSRB’s acknowledgement of ABA concerns about its Rule G-34(a) amendment and reiterated the need for specific regulatory language. In amending Rule G-34(a), which otherwise requires dealers to obtain CUSIP numbers for new issue securities sold in private placement transactions, the MSRB provided an exception for placements of muni obligations to a single bank, its non-broker-dealer affiliates and consortia of these entities.

However, ABA said that the MSRB’s requirement that purchasers intend to hold securities to maturity in order to qualify “reflects a misunderstanding of the fundamental workings of the direct purchase market.” Instead, ABA urged the MSRB to allow the exception when purchasers have no intent to sell or distribute the securities. For more information, contact ABA’s Cris Naser.