MSRB requests comment on prohibiting 'not reoffered' designation

By Angela McDaniels

Tacoma, Wash., March 13 - The Municipal Securities Rulemaking Board is requesting comments on a proposal to prohibit brokers, dealers and municipal securities dealers from using the term "not reoffered" or "NRO" in any written communication unless it also includes the initial offering price or yield information.

"We see this proposal as an important protection for state and local governments," MSRB executive director Lynnette Kelly said in an MSRB news release. "We want to ensure that they are able to access complete pricing information about new bonds when in the market."

The not-reoffered or NRO designation indicates that some maturities of a new issue of municipal securities are not available to be offered to potential investors.

MSRB said underwriters are required to report complete price or yield information (including maturities designated as NRO) to the Depository Trust and Clearing Corp. and to the MSRB, but this information may not be readily available until the end of the first day of trading in the new issue.

In addition, underwriters often use the NRO designation for certain maturities of new issues of municipal securities when communicating to other market participants. MSRB said this results in inconsistent information in the market.

Comments can be submitted at www.msrb.org/CommentForm.aspx until April 10. They should reference notice number 2012-14.

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