The new MSRB rule, approved by the Securities and Exchange Commission on November 17 and effective no later than 18 months following the approval, requires that dealers disclose both dollar and percent markups paid by retail investors on bonds the dealer purchased from a third-party source on the same day. Additionally, a link to the MSRB's official information repository, Electronic Municipal Market Access (EMMA), will be included on the confirmation of all retail purchases.
"Gurtin is optimistic that the new rule represents a significant step toward enabling a more sophisticated and informed investing public, but we believe the new requirements still fall somewhat short of full transparency," said Co-CEO Michael Johnson. "For example, for bonds held in dealer inventories for longer than a day, it will still likely be difficult to determine with certainty the magnitude of dealer's markups. Although many institutional money managers, like Gurtin, have been buying wholesale bonds at bid price without a markup for years, this new regulation ushers in a whole new era for brokers, and it will be interesting to see how they react once it goes into effect."
About Gurtin Municipal Bond Management:
As an industry leader in municipal bond portfolio management, with $11.6 billion under management as of December 2016, Gurtin is committed to investors' complete comfort in their municipal bond investments. Gurtin strives to deliver peace of mind to investors and their advisors through first-class client service, deep analysis, and expertise, and creative strategies uncovering often overlooked value—and avoiding often concealed threats—in the municipal market. For more information, visit www.gurtin.com.
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SOURCE Gurtin Municipal Bond Management