Series 53: Executing A Close-Out

Taken from our Series 53 Online Guide

Executing a Close-Out

The purchaser may execute a close-out in one of three ways:

  • It may purchase the securities at the current market price for the account and liability of the seller (a buy-in)
  • It may accept delivery of municipal securities that are comparable to those originally bought in quantity, quality, yield or price, and maturity from the seller, with any additional expenses being borne by the seller
  • It may require the seller to repurchase the securities plus accrued interest and bear the burden of any change in market price.

A purchaser executing a close-out must notify the selling broker-dealer the method that was used to close-out the transaction and immediately confirm it in writing afterwards. It must also send a copy of the trade confirmation. If the seller has issued a retransmittal notice to another party, the retransmitting party must immediately notify the seller of the execution of the close-out. Any money due on either the completed transaction or the close-out must be forwarded to the purchaser within five business days after the close-out has been executed.

MSRB Rule G-12(h)(i)

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