MSRB seeks comment on revised rules regarding retail order periods

By Susanna Moon

Chicago, Oct. 2 - The Municipal Securities Rulemaking Board said it requested comment on revised amendments to rules that would bind dealers to the preferences of state or local government issuers that want to designate a specific amount or maturities of new bonds marketed to retail investors.

"So-called retail order periods are an important way that state and local governments can help individual investors access bonds in the primary market," MSRB executive director Lynnette Kelly said in the release.

The MSRB said it first sought comment on proposed amendments to MSRB rules concerning retail order periods in March in response to concerns about dealers ignoring the terms and conditions required by issuers for retail order periods.

The comment also addressed the failure of syndicate managers to timely notify issuer terms and conditions about retail order periods to all dealers, and whether retail order periods result in fair pricing to retail investors.

The MSRB reviewed the comments received and revised its proposed amendments to MSRB Rule G-11 to more narrowly define the term "selling group" and to clarify the obligations of syndicate managers to communicate pricing and other relevant information to members of the syndicate and selling group.

The MSRB revised its proposed amendments to Rule G-8 on recordkeeping to require both syndicate managers and managers to maintain records of all pricing information required to be distributed pursuant to Revised Draft Rule G-11. The revised draft interpretive notice limits its focus to retail order period pricing.

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