SIE Understanding Trading, Customer Accounts and Prohibited Activities Question 64: Answer and Explanation

Question: 64

Which of the following directs that municipal securities dealers and broker-dealers who assist a municipality to offer municipal securities to the general public do their reasonable best to make certain the municipality submits to the MSRB expected information that would aid a potential investor in making a decision whether to buy the offered security?

• A. 1934 Act 15c2-12 – Municipal Securities Disclosure
• B. FINRA 2231 – Customer Account Statements
• C. MSRB G-47 – Time of Trade Disclosure
• D. MSRB G-13 – Quotations

Correct Answer: A

Explanation:

A: Choice A is correct because such information as changes in the financial strength of the municipality offering the security would be helpful to a potential investor making a decision whether to purchase the security. Choice B is incorrect because this rule has to do with the content and frequency of customer account statements sent by FINRA member firms to their customer. Choice C is incorrect because this rule specifies that the dealer informs the customer, at least by the trade date, any relevant aspects of the investment and trade. Choice D is incorrect because this rule deals with quotes made reflecting prices and quantities of municipal securities actually available by the firm making the quotes.