BDA Submits Comment Letter: Amendments to MSRB G-34 on CUSIPs

BDA submitted a comment letter, available here, in response to MSRB’s request for comment on draft amendments and clarifications to Rule G-34 on obtaining CUSIP numbers.

The draft letter focuses on the following:

  • The Draft Amendments will not permit issuers to issue and investors to purchase privately placed municipal securities without CUSIP numbers even though there are good reasons why issuers and investors alike may not want the securities to be assigned a CUSIP number
  • To the extent that the MSRB views the Draft Amendments as a solution to direct bank transactions, the BDA believes that the Draft Amendments would be ineffective and cause unintended consequences
  • Requiring CUSIP numbers in private placements will have the effect of eliminating placement agents in many transactions
  • Requiring CUSIP numbers in private placements may create an un-level playing field with non-dealer affiliated municipal advisors in direct bank transactions
  • BDA urges the MSRB to change the definition of “underwriter” in the Proposed Rule to exclude private placements
  • Recommend that if the MSRB change the definition of “underwriter”, they also consider revisions to other parts of the rule to ensure that dealers are not under a requirement that is impossible for them to satisfy
  • Urges the MSRB to apply the Proposed Rule only prospectively
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