s 4

Question 1

Spread

Formal definition

Answer 1

Difference between price paid to issuer (the bid) and the price sold to the public (reoffering yield)
Called Underwriting Spread or Production

Question 2

management fee

Answer 2

any amount realized by the syndicate manager and not realized by the syndicated

Question 3

takedown

Answer 3

also called total takedown

Spread Minus Management fee

Question 4

Total Takedown composition

Answer 4

additional takedown and concession

Question 5

The price at which a selling group member buys the issue

Answer 5

concession

Question 6

Rule G-23

Answer 6

Establishes standards for financial advisors that advise on issues for the issuer.
MAP

Question 7

MAP

Underwriting

Answer 7

Forbidden regardless if it’s a negotiated or competitive bid

Question 8

MAP

Remarketing Agent

Answer 8

generally prohibited from acting as a remarketing agent with respect to the same issuer of
municipal securities

Question 9

Remarketing Agent

Defined

Answer 9

A remarketing agent is defined as a municipal securities dealer responsible for
reselling to investors securities (such as variable rate demand obligations) that have been tendered for
purchase by their owner

Question 10

MAP

Successor Remarketing Agent

Answer 10

A firm is permitted to serve as a successor remarketing agent for an issue if the
financial advisory relationship has been terminated for a period of at least one year prior to the firm being
selected as the remarketing agent

Question 11

Underwriter giving advice

Answer 11

as stated earlier, a broker-dealer may provide advice to an issuer relating to
the issuance of municipal securities in the capacity of acting as an underwriter and not as a financial
advisor. This may include the structure, timing, and terms of the issue. In order for the firm to be
considered an underwriter and not a financial advisor, it must clearly identify to the issuer at the earliest
possible stage that it’s acting as an underwriter

Question 12

SEC Rule 15c2-12

Answer 12

will also assist an underwriter in meeting the obligation to have a reasonable basis
1. Must obtain and review an official statement prior to bidding for or purchasing the securities. The
official statement must be considered to be in final form by the issuer at that time. Since the following
information may not yet be known, it can be omitted:
– Offering price, interest rate, selling compensation, aggregate principal amount
– Principal amount per maturity, delivery dates, ratings, and identity of the underwriter(s)
 Must send to customers the most recent copy of the preliminary official statement, if any, within one
business day of request (for negotiated offerings)
 Must contract with the issuer to receive sufficient quantities of the final official statement within seven
business days after the agreement to purchase, offer, or sell the securities,

Question 13

Exemptions SEC Rule 15c2-12

Answer 13

pertains to most primary offerings of municipal securities, with the
following exceptions:
 A primary offering of municipal securities with an aggregate principal amount of less than $1,000,000
 Bonds that are sold to investors in units of no less than $100,000 and are sold to no more than
35 sophisticated investors (private placement)
 Bonds that are sold in $100,000 minimum denominations and mature in nine months or less

Question 14

Delivery of Official Statement to Customers

Answer 14

If an underwriter has submitted the official statement to EMMA, a broker-dealer may send a notice to any
customer who purchases a new issue of municipal securities advising them how to obtain the official
statement from EMMA. This may be done in lieu of sending the official statement to a customer. The
notice must state that a copy of the official statement will be provided by the broker-dealer upon request. If
the customer contacts the broker-dealer to request the official statement, it must be sent by first class mail
within one business day of the request.

Question 15

MSRB’s Electronic Municipal Market Access (EMMA) System

Answer 15

The MSRB has established EMMA
as the primary market disclosure service for official statements, other related primary market documents,
and information. The EMMA website can receive documents from issuers and underwriters and provides
access free of charge to the public

Question 16

Syndicate Letter

Answer 16

The syndicate manager will invite other firms to participate by sending a syndicate
letter. The syndicate letter will specify the obligations and participation of the members, when the
syndicate will settle, the type of account, and priority of orders.
In a negotiated issue, the syndicate will form under an agreement among underwriters rather than a
syndicate letter.

Question 17

Good-faith checks can range from

Answer 17

1% to 5% of the issue’s par value, with 2% being the typical amount

Question 18

Disclosure of Capacity

Answer 18

Every syndicate member that submits an order to purchase municipal securities being held by the
syndicate must disclose, at the time of submission, if the securities are being purchased for:
 Its dealer account (for inventory)
 The account of a related portfolio
 A municipal securities investment trust sponsored by the dealer, or
 An accumulation account that’s established in connection with a
municipal securities investment trust

Question 19

related portfolio,

Answer 19

The syndicate manager also must confirm sales made by the syndicate to a related portfolio, municipal
securities investment trust, or accumulation account. The confirmation can be sent to the member that
submitted the order or directly to the account. Sales made to these organizations don’t have to be group
allocations—the sale can be done for the benefit of the firm that entered the order

Question 20

Priority Provisions

Answer 20

Pre-sale orders
Retail Orders - For a negotiated underwriting, retail orders will have the highest priority.
Group Orders
Designated orders Orders placed at the offering level with the profit going to the dealers that were
designated by the customer. These orders are usually allowed only for large clients.
Member orders - These orders receive the lowest priority

Question 21

Before the syndicate sells any securities, the senior syndicate manager must provide to the other members
of the syndicate the following information in writing:

Answer 21

The priority provisions
 The procedure, if any, by which such priority provisions may be
changed
 If the senior syndicate manager or managers are to be permitted, on a
case-by-case basis, to allocate securities in priority provisions, the
fact that they’re to be permitted to do so
 If there’s to be an order period, whether orders may be confirmed
prior to the end of the order period

Question 22

Disclosure of Allocation of Securities

Answer 22

Within 24 hours of sending the commitment wire, the senior syndicate
manager must complete the allocation of securities
Within two business
days from the date of sale, the syndicate manager must provide to the
syndicate members a written summary of the allocation of securities to
orders which, under the priority provisions adopted by the syndicate,
were entitled to a higher priority than a member’s “takedown” order

Question 23

Date of sale

Answer 23

is defined as the date on which the contract to purchase the bonds has been executed or
awarded. The summary must show the aggregate par value and maturity of each series that’s allocated, and
the price of each series including any order that’s confirmed at a price other than the original list price.

Question 24

takedown directed to a member by the issuer

disclosure

Answer 24

15 business days following the date of sale or three business days following receipt by
the manager of notification of such set-asides of the takedown.

Question 25

Payment disclosure

Answer 25

he syndicate manager is also required to disclose to each member of the syndicate all available information concerning payments to syndicate and non-syndicate members within 10 business days following the date of sale.

Question 26

Discretionary fees for clearance costs and management fees | Disclosure

Answer 26

must also be disclosed by the manager to the syndicate members. For competitive offerings, this disclosure must be made prior to the submission of a bid. For negotiated offerings, this disclosure must be made prior to the execution of a purchase contract with the issuer. In addition to amounts categorized as management fees by the syndicate manager, management fees include any amount to be realized by a syndicate manager and not shared with the other members of the syndicate.

Question 27

Payments of Designations

Answer 27

Payments of designations refer to payments made to syndicate members of a portion of the underwriting spread in which the purchaser (usually an institutional customer) has chosen (designated) to a member of the syndicate. The rule states that all syndicate account members shall submit the allocations of their designations to the syndicate manager within two business days following the date the issuer delivers the securities to the syndicate. Any credit designated by a customer in connection with the purchase of securities as due to a member of a syndicate or similar account shall be distributed by the municipal securities dealer handling such order within 10 calendar days following the date the issuer delivers the securities to the syndicate

Question 28

payment disclosure

Answer 28

senior syndicate manager is required to disclose to each member of the syndicate all available information concerning payments to syndicate and non-syndicate members within 10 business days following the date of sale

Question 29

Negotiated Sales In connection with a negotiated sale of new issue municipal securities, the following information concerning underwriting arrangements must also be disclose

Answer 29

To customer  The underwriting spread  The amount of any fee received by the municipal securities firm as agent for the issuer in the distribution of the securities  The initial offering price for each maturity in the issue that’s offered or to be offered in whole or in part by the underwriters

Question 30

Under MSRB Rule G-32, if two or more customers share the same address,

Answer 30

a dealer may satisfy its official statement delivery requirements by sending one copy of the document, provided:  The dealer addresses the official statement to the group (for a fund or corporation) or by addressing the documents to both or all of the names of the clients  The investors consent in writing to the delivery of one official statement A firm is not required to obtain the written consent if both investors have the same last name or it reasonably believes that the clients are members of the same family.

Question 31

under writing assessment

Answer 31

f .00275% of par value ($.0275 | per $1,000).

Question 32

under writing assessment | exemptions

Answer 32

Both commercial paper, which is defined as municipal securities having a maturity of nine months or less, and certain municipal funds securities [i.e., 529 ABLE (or 529A) plans and Local Government Investment Pools (LGIPS)] are exempt from the underwriting assessments.

Question 33

under writing assessment | 529 college savings plans

Answer 33

The assessment is .0005% ($.005 per $1,000 of the total aggregate assets as reported on Form G45 for the fund. The assessment is payable by the managing underwriter that’s listed in the official statement as of December 31 of the current year

Question 34

Submission of the OS and Advance Refunding Documents

Answer 34

These documents must be submitted to EMMA in an electronic format (PDF). within one business day after the receipt of the official statement from the issuer or its designee If the official statement for the offering has not be submitted by the underwriter (due to the fact the underwriter has not received it from the issuer), the underwriter is required to submit to EMMA a notice that the official statement has not been submitted and that the official statement will be submitted when its becomes available, submit the official statement within one business day after receipt from the issuer, and submit either a preliminary official statement or a notice that no preliminary official statement has been prepared. In addition, Form G-32 must also be submitted by the managing underwriter within one business day after receiving the OS from the issuer, and within five business days after receiving the ARD from the issuer

Question 35

The following records and forms must be prepared by the managing underwriter in a primary offering of a municipal securities issue:

Answer 35

1. The name, par value, and CUSIP number(s) for each offering of municipal securities 2. The dates that the documents are received from the issuer and are sent to the MSRB 3. The date that the issue is delivered to the underwriters 4. The date that the underwriting agreement is signed 5. Copies of forms Form G-32

Question 36

No underwriting fee is charged if all securities in the primary offering:

Answer 36

 Have an aggregate par value of less than $1,000,000  Have a maturity of nine months or less  Are marketed with a put period of nine months or less, or  Are issued in denominations of $100,000 or more and are sold to no more than 35 sophisticated (knowledgeable) investors who are not looking to redistribute the securities. (This is often referred to as a limited placement.)

Question 37

submitting OS amendments to emma

Answer 37

within one business day up to the 25th day after settlement of underwriting.

Question 38

cusip application time frame | new issues

Answer 38

The application must be made so that the assignment of CUSIPs is received by no later than the date of award for competitive offerings and, for negotiated sales, by no later than the day on which the contract to buy the securities from the issuer is executed (the day on which the purchase contract is signed).

Question 39

When filing an application for CUSIP numbers, the following information must be provided:

Answer 39

1. The name of the issue and series designation, if applicable 2. The interest rate(s) and maturity date(s) 3. The dated date (first day of interest accrual) 4. The type of issue (general obligation, revenue, etc.) 5. The type of revenue generated if the issue is a revenue bond 6. The details of any redemption provisions 7. Any other party who may be obligated to pay debt service on the issue (an issuer or other political subdivision)

Question 40

A “going away

Answer 40

is one in which a customer is already conditionally committed. I.e.e a member order during the retail order period has going away orders that it will distribute the share to.

Question 41

niids | new issue filing

Answer 41

The underwriter is required to file an application no later than one business day from the award by the issuer (in the case of a competitive sale) and no later than one business day after the execution of the contract to purchase the securities from the issuer (in the case of a negotiated sale).

Question 42

NIIDS | CLEARING

Answer 42

Once the application is filed, the underwriter communicates information about the new issue to other dealers and data vendors within two business hours using the New Issue Identification System (NIIDS) so it can clear, confirm, and settle transactions in these securities through the National Securities Clearing Corporation (NSCC)

Question 43

NIIDS | HOURS

Answer 43

Business hours refers to 9:00 A.M. to 5:00 P.M. Eastern Time. Both NIIDS and the NSCC are part of the Depository Trust and Clearing Corporation’s (DTCC).

Question 44

Underwriters are required to make submissions to the New Issue Identification System (NIIDS) for municipal securities with the following exceptions:

Answer 44

 An issue that’s not depository-eligible  Any issue maturing in 60 days or less  Commercial paper

Question 45

The following information must be submitted through NIIDS no later than two business hours after Time of Formal Award, which is:

Answer 45

 For competitive issues, the later of the time the issuer announces the award or the time the issuer notifies the underwriter of the award  For negotiated issues, the later of the time the contract to purchase the securities from the issuer is executed or the time the issuer notifies the underwriter of its execution

Question 46

Time of first execution

Answer 46

no sooner than 2 business hours after everything is submitted to NIIDS.

Question 47

form G-37(x)

Answer 47

E Dealers that don’t engage in municipal securities business for consecutive calendar quarters may file form G-37(x), allowing these dealers to forgo submitting form G-37. However, if the dealer thereafter engages in municipal securities business, it must once again begin filing form G-37.