MSRB Rules Practice Test

A control relationship with an issuer creates a potential conflict of interest, so investors must be informed about it. The MSRB requires this disclosure whenever a municipal broker-dealer has a control relationship with an issuer in any transaction involving that issuer. That means disclosures are needed in primary market offerings (both the underwriting and the selling group) and in secondary market agency transactions. Because the requirement covers all three types of transactions, the correct conclusion is that disclosure must occur in all of the above.