Series 53 cheat sheet

MSRB Rule G-27 requires each dealer to adopt written supervisory procedures reasonably designed to prevent violations of municipal securities rules and to designate a municipal securities principal.

A municipal securities principal must be qualified under MSRB Rule G-3 by passing the Series 53 examination; representatives qualify through the Series 52 examination.

Rule G-27 supervisory systems must include review of municipal securities transactions, correspondence, customer complaints, and the activities of supervised persons.

Rule G-20 limits gifts to $100 per person per year and restricts non-cash compensation; gifts and compensation arrangements must be recorded.

Rule G-37 imposes a two-year ban on municipal securities business with an issuer after certain covered associates make political contributions to issuer officials.

Rule G-38 requires written agreements and records when a dealer uses a non-affiliated placement agent to obtain municipal securities business.

Rule G-17 prohibits deceptive, misleading, or unfair practices and requires disclosure of material conflicts and compensation to customers and issuers.

Rule G-21 requires principal approval of municipal securities advertising and retention of records showing approval and distribution.

Continuing education for registered municipal securities principals includes an annual regulatory element and a firm element set by the dealer.

In a municipal offering, the issuer is responsible for the official statement's content; the underwriter must perform due diligence and deliver the final official statement to customers.

MSRB Rule G-32 requires underwriters to submit official statements and certain primary offering documents to EMMA.

SEC Rule 15c2-12 requires an underwriter to obtain and review the issuer's continuing disclosure undertaking and reasonably determine that the issuer will comply.

Continuing disclosure event notices are generally due within 10 business days after the event; annual financial information is due by the undertaking's specified date.

MSRB Rule G-34 requires CUSIP numbers for new municipal issues and governs applications for those identifiers.

In a competitive sale, the issuer awards bonds to the syndicate whose bid produces the lowest true interest cost or other specified bid parameter.

A negotiated sale uses a senior manager and syndicate; the agreement among underwriters sets participation, order priority, fees, and liability.

MSRB Rule G-11 governs syndicate practices, including priority of orders, allotments, and records for the syndicate account.

Bond counsel typically opines on the bonds' validity and federal tax status; underwriter's counsel reviews disclosure and due diligence.

MSRB Rule G-18 requires a dealer to use reasonable diligence to obtain best execution for customer orders, considering price, speed, and likelihood of execution.

MSRB Rule G-19 requires recommendations to be suitable on both a reasonable-basis and a customer-specific basis.

MSRB Rule G-17 requires fair dealing and disclosure of material conflicts, compensation, and the dealer's capacity in a transaction.

MSRB Rule G-30 requires fair and reasonable prices and commissions and disclosure of markups on retail principal transactions.

MSRB Rule G-15 requires customer confirmations to disclose CUSIP, trade date, price, yield, capacity, compensation, and settlement date.

MSRB Rule G-14 requires dealers to report municipal securities transactions to RTRS within 15 minutes of execution, subject to specified exceptions.

A markup is the difference between the customer's price and the dealer's cost or the prevailing market price; it must be fair and reasonable.

Principals review trading activity for fair pricing, order execution quality, markups, odd-lot handling, and customer complaints.

MSRB Rule G-21 requires principal approval and recordkeeping for advertisements and sales literature concerning municipal securities.

Interests in 529 plans are municipal fund securities; they are exempt from Securities Act registration but remain subject to MSRB rules.

529 plan recommendations require suitability analysis of state tax benefits, fees, beneficiary age, investment options, risk tolerance, and residency.

MSRB Rule G-17 requires disclosure of fees, compensation, conflicts, and material differences among 529 plan share classes.

529 plan share classes often differ in sales charges, distribution fees, and expense ratios, which affect suitability and cost comparisons.

Local government investment pools are municipal fund securities subject to MSRB disclosure, sales, and supervision rules.

MSRB Rule G-45 requires program managers to report information about municipal fund securities, such as 529 plans, to the MSRB.

Qualified 529 withdrawals are federally tax-free; nonqualified withdrawals are taxable to the extent of earnings and generally face a 10% penalty.

MSRB Rule G-8 specifies books and records dealers must keep, including order tickets, confirmations, complaints, advertising, and political contribution records.

MSRB Rule G-9 requires records to be preserved for at least three years, with the first two years in an easily accessible place.

MSRB Rule G-14 requires transaction reporting to RTRS within 15 minutes of execution; Rule G-32 governs EMMA submission of offering documents.

MSRB Rule G-3 sets qualification requirements, including the Series 53 examination for municipal securities principals.

Dealers must maintain an anti-money-laundering program with policies, a compliance officer, training, and independent testing.

Customer complaints must be recorded and reviewed by supervisory personnel; related correspondence and resolution records must be retained.

Political contribution and placement agent records under Rules G-37 and G-38 must be maintained for supervisory review and regulatory examination.

EMMA is the MSRB system for official statements, continuing disclosure, and municipal market disclosures; RTRS receives trade reports.