Series 50: Unfair Practice In Municipal Securities

Unfair Practice in Municipal Securities

MSRB Rule G-17 prohibits fraudulent conduct. Under the rule, broker-dealers, municipal securities dealers, and advisors must deal fairly with all persons and may not engage in deceptive, dishonest, or unfair practices.

The MSRB gives a specific example of dealing fairly in Rule G-47. A dealer must disclose all material information known by the dealer concerning the security at the time of trade. The dealer must also disclose any material information about the security that is reasonably accessible to the market from established industry sources.

Information is considered material if a reasonable investor would consider it important in making an investment decision.