GFOA Weighs In On Retail Order PeriodsThe GFOA submitted a letter to the Municipal Securities Rulemaking Board in response to proposed rule changes related to retail order periods. The MSRB proposal would outline specific instructions that dealers must follow to accurately execute an issuer’s criteria for retail orders. The dealer would also be responsible for notifying syndicate managers of the issuer’s criteria.
GFOA’s response, developed by members of the Governmental Debt management Committee, generally supported MSRB’s efforts to strengthen the proposal in order to ensure compliance with the issuer’s criteria in a retail order period. However, the GFOA noted that there are two areas where the MSRB could strengthen the proposal even more to better assist – and protect – issuers:
- The MSRB could develop a baseline definition of “retail order” for infrequent issuers that may not be using the advice of a financial advisor. This baseline definition, which may be altered or substituted by the issuer, would allow the issuer to easily access and use this definition, rather than having to solely depend on the dealer for assistance with developing retail order criteria.
- The GFOA’s letter urged the MSRB to move cautiously when they apply fair pricing rules on retail orders, as there are many reasons why the pricing of bonds with the may be different during the retail order period and institutional sale period.
Click here for the GFOA’s comments
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