Series 53: Municipal Fund Securities

Municipal Fund Securities

A municipal fund security is a fund of securities that is issued by a state or municipality. Investments in a municipal fund security may consist of a wide variety of securities, including corporate stocks and bonds and government securities of every stripe. It is not to be confused with a municipal bond fund, which is a mutual fund consisting of municipal bonds. A municipal fund security is distinguished from the typical investment company by its issuer.

Because it is issued by a state or local government, it is exempt from the rules of the Investment Company Act of 1940. As such, it does not have to register with the SEC, prepare a prospectus, calculate and post its net asset value on a daily basis, or include independent directors on its board. In additio