Municipal Securities Primary Financing
Chapters in this video
- 0:00 SEC exemption and MSRB jurisdiction
- 0:55 Competitive versus negotiated sale methods
- 2:40 Advance refunding and the 2017 tax law change
- 3:50 Syndicate priority: presale through member orders
- 5:24 Official statement, POS, and notice of sale equivalents
- 5:55 OS delivery rule, EMMA, and CUSIP application
- 6:26 Rapid-fire exam recap
What this video covers
- Why municipal securities are exempt from Securities and Exchange Commission (SEC) registration under the Securities Act of 1933, and which regulator actually governs them instead
- The three methods of municipal sale (competitive, negotiated, private placement), including what goes into a notice of sale and how price is determined in each method
- How advance refunding works with escrow, why the Tax Cuts and Jobs Act of 2017 killed tax-exempt advance refundings, and the 90-day rule for current refundings
- The exact priority of orders in a municipal syndicate (presale, group net, designated, member), why customer orders always beat member orders for its own account, and when the syndicate manager must disclose priority provisions
- The municipal equivalents to corporate documents (official statement to prospectus, preliminary official statement to red herring), and which document has no corporate equivalent
- The official statement delivery rule (no later than settlement, not trade date) and the Electronic Municipal Market Access (EMMA) submission requirement
- Why the same firm cannot be both financial advisor and underwriter on a single negotiated municipal issue
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