Securities markets provide liquidity true false quiz

One possibility would be to examine whether existing electronic trading platforms could be made more open. There are several key areas where additional reforms are needed, if the municipal securities market is to become as transparent, liquid, efficient, and fair as possible. Such systems, if required to publish their best bids and offers, could also help improve price transparency and liquidity.

The municipal securities market is characterized by stark disparities in the availability of timely, accurate, and complete financial information about issuers. But even without the Tower Amendment, the Commission and the MSRB would still lack the authority to determine what information municipal issuers need to disclose, and when they need securities markets provide liquidity true false quiz disclose it. Prior to the crisis, the availability of credit enhancements such as municipal bond insurance allowed investors, in many instances, to discount liquidity and default risks in pricing municipal bonds. It has been recognized that advances in recent years in the availability of post-trade transaction information have enhanced transparency and narrowed somewhat the information gap between dealers securities markets provide liquidity true false quiz individual investors. In the past, the large inventories of both liquid and illiquid securities maintained by dealers allowed issuers to make offerings with little regard for liquidity considerations.

Investors and other market participants have long criticized the quality, consistency, and timeliness of the disclosures provided by municipal issuers. It is unclear how, and to what extent, the changes described above will shape the municipal securities market in the future. The Tower Amendment, named after the late Senator John Tower of Texas, also plays a critical role in denying investors accurate and timely disclosures, by limiting securities markets provide liquidity true false quiz regulatory authority over issuers of municipal securities. Institutional investors have partly stepped in to fill the void left by bank-affiliated dealers.

For example, last year securities markets provide liquidity true false quiz MSRB implemented municipal advisor supervision and compliance requirements. The syndicate will purchase the bonds for a specified amount from the issuing firm and re-offer the bonds to the public, usually at a different price. Other members of the Commission have gone further, and have called for the development of electronic exchanges for municipal securities, much like the exchanges that currently exist for equities. For example, the new discount rate standards do not fully solve the chase-for-yield and cash-burning problems identified by critics. Muni-Bond Market Is on a Tear:

Many in the industry complained that a best execution requirement, like the ones for equities and corporate bonds, would be wholly unworkable in the highly fragmented municipal securities market. The MSRB has pursued other rules that will make investor protections more robust. Alternatively, Congress could leave these exemptions in place, but give the Commission broad authority to establish improved disclosure practices in the municipal securities market.