Series 53 key terms

A self-regulatory organization created by Congress that writes and enforces rules for firms and individuals that underwrite, trade, or advise on municipal securities and municipal fund securities.

A debt obligation issued by a state, local government, or their agencies to finance public projects or operations. Interest is often exempt from federal income tax.

The primary disclosure document for a municipal bond offering, prepared by the issuer, containing information about the securities, the issuer's finances, and the risks of investing.

A near-final draft of the official statement distributed before the sale date. It is marked preliminary and may be updated with final pricing and other details.

The completed official statement delivered after the bonds are priced, including final terms such as interest rates, maturities, and offering prices.

An issuer's ongoing obligation under SEC Rule 15c2-12 to provide annual financial information and notices of specified events to the MSRB's EMMA system.

An SEC rule that prohibits underwriters from purchasing municipal bonds unless the issuer has agreed to provide ongoing disclosure to investors through annual reports and event notices.

A method of selling new municipal bonds in which the issuer solicits sealed bids from underwriting syndicates and awards the bonds to the bidder offering the lowest true interest cost.

A method of selling new municipal bonds in which the issuer selects an underwriter in advance and negotiates the terms, pricing, and underwriting spread.

A temporary group of broker-dealers formed to underwrite and distribute a new municipal bond issue, sharing the risks and the underwriting spread.

The firm that leads a syndicate, negotiates with the issuer, allocates bonds to syndicate members, and is responsible for compliance and settlement.

Firms that help distribute a new municipal issue but are not members of the underwriting syndicate and do not share underwriting risk.

The difference between the price paid by the underwriter to the issuer and the price at which the bonds are sold to investors, which compensates the underwriter for risk and services.

The portion of the underwriting spread paid to a syndicate member or selling group member for selling bonds to investors.

An independent law firm that reviews a municipal bond issue for legal compliance and issues an opinion on the validity and tax-exempt status of the bonds.

A person or firm that provides advice to a municipal entity or obligated person about the issuance of municipal securities or municipal financial products, subject to MSRB rules.

An MSRB rule that prohibits a municipal securities dealer from engaging in municipal securities business with an issuer for two years after certain political contributions to issuer officials.

A small political contribution to an issuer official, up to $250 per election by a covered person, that does not trigger the two-year ban if certain conditions are met.

A quarterly MSRB filing in which dealers report political contributions to issuer officials, municipal securities business, and certain consultant payments.

An MSRB rule requiring dealers to establish and maintain a supervisory system, including written procedures, to ensure compliance with municipal securities rules.

A firm's documented policies and processes that assign supervisory responsibilities and describe how the firm will monitor and enforce compliance with applicable rules.

An MSRB rule that sets qualification, examination, and continuing education requirements for municipal securities principals, representatives, municipal advisors, and other covered persons.

An MSRB rule requiring dealers to deal fairly with all persons and not engage in deceptive, dishonest, or unfair practices in municipal securities transactions.

An MSRB rule requiring dealers to have a reasonable basis for recommending municipal securities and to ensure recommendations are suitable for the customer's investment profile.

An MSRB rule limiting gifts and non-cash compensation that dealers may give to employees of other dealers and to customers, with exceptions for certain items.

An MSRB rule requiring that prices and commissions charged to customers be fair and reasonable, taking into account market factors and services provided.

An MSRB rule requiring dealers to report municipal securities trades to the Real-Time Transaction Reporting System within 15 minutes of execution.

An MSRB rule specifying the information that must appear on customer confirmations for municipal securities transactions, including price, yield, and capacity.

An MSRB rule requiring underwriters to deliver the official statement to customers and to submit certain issue information to the MSRB's EMMA system.

An MSRB rule listing the books and records that dealers must make and keep, including transaction records, customer account records, and supervisory records.

An MSRB rule specifying how long dealers must keep records required by Rule G-8 and the conditions for storing them electronically.

A municipal security that represents an interest in a fund, such as a 529 savings plan or a local government investment pool, rather than a direct debt obligation.

A qualified tuition program sponsored by a state or educational institution that allows tax-advantaged saving for education expenses, often sold as municipal fund securities.

A pooled investment vehicle created by a state or local government to manage public funds, often treated as a municipal fund security under MSRB rules.

An MSRB rule governing advertisements and sales literature about municipal securities and municipal fund securities, requiring fair and balanced presentation and principal approval.

Interest that has accumulated on a bond since the last coupon payment date and is paid by the buyer to the seller when the bond trades.

The total return an investor would receive if a bond is held to maturity, accounting for the purchase price, coupon, and time remaining.

A provision allowing the issuer to redeem a bond before maturity, often at a specified price and after a set date, which creates reinvestment risk for investors.

A municipal bond backed by the full faith, credit, and taxing power of the issuing government, rather than by a specific revenue stream.

A municipal bond payable from the revenues of a specific project or enterprise, such as a toll road or water system, rather than from general taxes.