By way of background, the market in fixed-income securities is not like the equity markets or the market in Treasury obligations. In such a market, broker-dealers play an important role by being familiar with the issuers and their credit, by selling bonds from their inventories to investors and by purchasing bonds from investors to hold in their inventory for later resale – at a profit governed by the markup and markdown rules of the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB).
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