The Municipal Securities Rulemaking Board on Monday received final approval from the Securities and Exchange Commission for a requirement that retail investors get the best executions of their municipal bond transactions from brokers starting December 7, 2015.
The requirement is similar to the protection investors receive when they buy and sell stocks and corporate bonds.
It will require municipal securities dealers to use “reasonable diligence” to identify the best potential trading venue for a particular security and then make the transaction at a price as favorable as possible under prevailing market conditions.
Calling best execution for munis an important milestone, Municipal Securities Rulemaking Board executive director Lynette Kelly said the requirement will “buttress pricing standards, promote fair competition among dealers and enhance market efficiency all for the benefit of retail investors.”