Chapter 5 Practice Question Answers
1. Answer: A. For inter-dealer transactions reported to the MSRB, the MSRB will assess each broker-dealer an inter-dealer transaction fee equal to 0.001% ($0.01 per $1,000) of the total par value of the reported sales. If the inter-dealer transactions were reported by a submitter for another broker-dealer, the fee must be paid by the submitter. The submitter, in turn, must seek reimbursement from the broker-dealer on whose behalf it reported the transaction.
2. Answer: C. For inter-dealer transactions reported to the MSRB, each broker-dealer must pay the MSRB a technology fee equal to $1.00 per transaction for any reported sale. For inter-dealer transactions reported by a submitter, the technology fee must be paid by the submitter. The submitter must then collect the technology fee from the dealer for whom it made the report.
3. Answer: D. For reported customer transactions, the MSRB will assess a customer transaction fee equal to 0.001% ($0.01 per $1,000) of the total par value of sales to customers that it reports. The fee must be paid by the broker-dealer that made the sale to the customer.
4. Answer: B. Sales of municipal securities to customers are assessed a technology fee equal to $1.00 per transaction for each reported sale. The technology fee is paid by the broker-dealer that effected the transaction for the customer.
5. Answer: C. For reported customer transactions, the MSRB will assess a customer transaction fee equal to 0.001% ($0.01 per $1,000) of the total par value of sales to customers that it reports. The fee must be paid by the broker-dealer that made the sale to the customer. For this transaction, it will be $0.01 x 150 = $1.50. It doesn’t matter whether the bond is sold at a discount, because the transaction fee is charged on par basis.
6. Answer: B. For inter-dealer transactions reported to the MSRB, the Board will assess each broker-dealer an inter-dealer transaction fee equal to