Broker dealers

Alleged supervisory failures led to unsuitable trading patterns of Puerto Rico and other bonds, FINRA found.

Ed Sisk, a managing director and head of public finance at Bank of America Merrill Lynch, has been MSRB chair since Oct. 1, 2019.

The New York-based firm agreed to be censured, pay the penalty, and remedy alleged problems with its supervisory system.

The board had planned to abolish the requirement that MAs advising on competitive deals apply for CUSIP numbers, but has now decided to keep the rule as is.

A case settled this week was the first brought in decades by FINRA for a rule violation on quotations.

The agenda includes discussion of possible changes to MSRB Rule G-10, on investor and municipal advisory client education and protection.

In two municipal bond transactions, Aegis Capital Corp. sold to its customers at prices that were 40% higher than the market rate.

Among over 1,200 dealers registered with the MSRB, 21 firms are bank dealers who would be impacted by the change.

The charges against Ricky Mantei stem from allegations of prearranged trading in violation of his firm's established procedures.

Much of the material being retired dates back more than 35 years.

Dealers say increased focus on systemic pennying has decreased its activity, while others aren't so sure.

The dealer group is concerned the SEC may provide another exemption for municipal advisors to work on private placement deals.

The reduction would be the largest the MSRB has done, substantially more than a previous one which caused a loss of $5.2 million.

Since a temporary exemption allowing muni advisors to facilitate certain private placement deals expired, a federal court cannot strike it down, the SEC argued.

This will be MSRB’s first board meeting of the calendar year.

The group specifically revised six of its model disclosure documents for risk disclosure including floating rate notes, fixed-rate bonds, interest rate swaps, forward delivery bonds, tender offer bonds and variable rate demand obligations.

Sources say pricing of bonds will be a prevalent issue in 2021 following comments made by bipartisan SEC commissioners.

The program has drawn comparisons to the Securities and Exchange Commission's MCDC.

The firm violated municipal advertising and fair dealing rules, the SEC found.

SEC Chair Clayton told Rep. French Hill, R-Ark., late last week that he expects the program to sunset at year's end as scheduled.