MSRB amends rule about bonds that do not pay interest semiannually

By Angela McDaniels

Tacoma, Wash., Feb. 23 – The Municipal Securities Rulemaking Board filed with the Securities and Exchange Commission on Tuesday an amendment to a rule about calculations for bonds that do not pay interest semiannually, according to an MSRB regulatory notice.

The amendment was made to MSRB Rule G-33, on calculations, to modernize the mathematical formula in Rule G-33(b)(i)(B)(2) governing how brokers, dealers and municipal securities dealers calculate the dollar price of interest-bearing municipal securities with periodic interest payments (e.g., daily, monthly, quarterly or annually) that have more than six months to redemption.

The amended pricing formula, which was effective upon filing, accounts for the actual interest payment frequency of such securities, eliminating the presumption in the calculation that interest is paid on a semiannual basis.

MSRB said this change better reflects the technologies currently available to efficiently conduct this more precise calculation.

The compliance date for the amended pricing formula is July 18.

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