FINRA questions sales tactics for municipal bonds

At SIFMA's Fixed Income Legal & Compliance Conference, an official with the Financial Industry Regulatory Authority said the regulator is looking into whether brokers are complying with requirements regarding sales and distribution of municipal bonds to retail investors. "We're looking at the terms of the distribution agreements with municipal issuers," said Malcolm Northan, a director of fixed-income securities at FINRA. The regulator is interested in how brokers define "retail" and whether they are meeting obligations to municipal bond issuers to distribute some portion of a deal to retail investors.

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