Just a reminder to teach your Reps about disclosing 'material information' to customers (except institutional buyers--sophisticated muni market participants) when selling munis. Even if not recommended. The EMMA portal is the place to find most such information. And here is a link to FINRA's news release on the subject--don't forget to search for "material events" in my blog to be treated to some other useful information...like a reminder that this rule applies to 529 sales.
FINRA provided in the news release a 'checklist' for Reps to use as a means of documenting their notification efforts (necessary! always document!). It's pretty lengthy and for some reason I don't envision Reps reading it. But if they did, they would surely be enlightened: it's full of instructions and explanations and ultimatums and guilt trips (jk). You may want to put your brilliant word processing staffers to work on this in order to create a more user-friendly checklist (send it to me and I'll send you my thanks and maybe chocolates!).
Also, MSRB's Fact Sheet is a very lovely tool for educating your muni customers. I hope they don't mind me passing it along.
Showing posts with label 529 plans. Show all posts
Showing posts with label 529 plans. Show all posts
Tuesday, September 21, 2010
Wednesday, July 15, 2009
YES--Material Event Disclosures for 529 Plans
So I should trust my FINRA sources more, that is my conclusion. I've taken my skeptical hat off for now.
Spoke to a very helpful, very pleasant gentleman at MSRB today. He very clearly conveyed this reality: SEC has determined that Rule 15c2-12 applies to municipal fund securities. I'm talking about material event disclosure requirements--G-17 (see blog entry below)--in the context of 529 plans. To the extent municipal issuers file notices on MSRB's new EMMA portal, firms that offer/sell 529 plans MUST review those notices and provide the material event information to their customers prior to the sale. As a practical matter, you won't see many such notices relating to 529 plans.
So here's what you do: build into your procedures this requirement; train your reps on how to use EMMA; supervise 529 sales to make sure disclosures are being made when required.
The EMMA site is easy to use. Go to http://emma.msrb.org/. Click on the '529 Plan Search' box with the graduation cap icon; accept the site terms; in the orange box, select a state and hit the arrow; then look for the plan you are about to sell to a customer. Click on that plan and you'll see links to the disclosure statements and, IF there are material event notices, you'll see a link to those. That is what you'll review and discuss with your customer... ta da!
It's not a bad idea to inform your customers about the EMMA portal--knowledge is power. That way, you'll be educating your customers as you should.
One more helpful link for you, courtesy of the nice man at MSRB: http://www.msrb.org/msrb1/mfs/mfs7.asp This is the 'securities regulation' page explaining which regs apply to 529 plan sales.
Hmm. Wonder how long it will take before I put that hat back on? Stay tuned.
Spoke to a very helpful, very pleasant gentleman at MSRB today. He very clearly conveyed this reality: SEC has determined that Rule 15c2-12 applies to municipal fund securities. I'm talking about material event disclosure requirements--G-17 (see blog entry below)--in the context of 529 plans. To the extent municipal issuers file notices on MSRB's new EMMA portal, firms that offer/sell 529 plans MUST review those notices and provide the material event information to their customers prior to the sale. As a practical matter, you won't see many such notices relating to 529 plans.
So here's what you do: build into your procedures this requirement; train your reps on how to use EMMA; supervise 529 sales to make sure disclosures are being made when required.
The EMMA site is easy to use. Go to http://emma.msrb.org/. Click on the '529 Plan Search' box with the graduation cap icon; accept the site terms; in the orange box, select a state and hit the arrow; then look for the plan you are about to sell to a customer. Click on that plan and you'll see links to the disclosure statements and, IF there are material event notices, you'll see a link to those. That is what you'll review and discuss with your customer... ta da!
So, while this is one more thing you have to worry about (and document), it's pretty easy to implement.
It's not a bad idea to inform your customers about the EMMA portal--knowledge is power. That way, you'll be educating your customers as you should.
One more helpful link for you, courtesy of the nice man at MSRB: http://www.msrb.org/msrb1/mfs/mfs7.asp This is the 'securities regulation' page explaining which regs apply to 529 plan sales.
Hmm. Wonder how long it will take before I put that hat back on? Stay tuned.
Monday, July 13, 2009
Update: It's Sunny (and a note on MSRB Rule G-17)
One of my favorite clients just reprimanded me for not updating my blog to correctly identify our NH weather as SUNNY. Which it is. Thanks so much, Mr. Get Back to Work...
Oh, and I just talked to a gentleman at FINRA who was happy I wasn't a reporter when I asked about a rule interp. ?? Are they bombarded these days by the Geraldos of the world who aren't busily churning M.J. rumors? Guess so.
His answer to my question was that, yes, BD's who do nothing but 529 plans--that is, they sell municipal FUND securities, not municipal securities--are required to comply with interpretive material on G-17 about material event disclosures. See Notice 09-35 at http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p119067.pdf .
This means that before having your customer sign onto that 529 plan, make sure you visit MSRB's new EMMA site at http://emma.msrb.org/ to gather and convey important disclosures about the issuer. Document that you did this; and you supervisors: check the records to make sure it's being done. Oh, and update your procedures for this new one.
I dunno. I'm a bit skeptical. I have a call into MSRB. I hope they call back before it starts raining again...
Oh, and I just talked to a gentleman at FINRA who was happy I wasn't a reporter when I asked about a rule interp. ?? Are they bombarded these days by the Geraldos of the world who aren't busily churning M.J. rumors? Guess so.
His answer to my question was that, yes, BD's who do nothing but 529 plans--that is, they sell municipal FUND securities, not municipal securities--are required to comply with interpretive material on G-17 about material event disclosures. See Notice 09-35 at http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p119067.pdf .
This means that before having your customer sign onto that 529 plan, make sure you visit MSRB's new EMMA site at http://emma.msrb.org/ to gather and convey important disclosures about the issuer. Document that you did this; and you supervisors: check the records to make sure it's being done. Oh, and update your procedures for this new one.
I dunno. I'm a bit skeptical. I have a call into MSRB. I hope they call back before it starts raining again...
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