How should a dealer address customer privacy in muni transactions?

• A. Share customer information with all counterparties to improve service
• B. Protect customer information, limit sharing, and comply with applicable privacy regulations
• C. Post customer names publicly to demonstrate transparency
• D. Do not collect any personal data

Answer: (B)

In muni transactions, protecting customer information and following privacy rules is essential. Dealers handle nonpublic personal information about clients, so the right approach is to safeguard that data, limit disclosures to only what is necessary to service the account or comply with legal and regulatory requirements, and follow applicable privacy regulations and notices. This means using safeguards like access controls, encryption, and vendor confidentiality agreements; sharing information only with those who need it to process the trade or provide a service, not with every counterparty; and offering customers privacy notices with any opt-out options when required. Some personal data is needed to open accounts, perform KYC, and complete transactions, so avoiding data collection entirely isn’t practical. Posting customer names publicly or sharing broadly would undermine privacy protections.