MSRB Rules Practice Test

The rule governs what must appear on a municipal bond trade confirmation to ensure clear disclosure of how the trade was executed and at what price. Among the required items are who the broker-dealer was acting for (the capacity — agent or principal) and the total dollar amount of the transaction, as well as information about the security’s features, such as whether it is callable.

The detail about the yield at which the transaction was effected is not required when bonds are sold at par. If the price is par, the yield is effectively implied by the coupon and par price, so stating a separate yield adds no new, useful information on the confirmation. In these cases, the confirmation can omit that yield figure without reducing transparency. The other elements—capacity of the broker-dealer, and the total transaction amount (and relevant features like callability)—still must be disclosed.