How should a dealer handle cross-border or cross-market municipal transactions?

• A. Ignore cross-border differences if not in the United States.
• B. Defer to issuer's internal policies only.
• C. Comply with applicable securities laws, MSRB rules, and ensure transparent, fair treatment of clients.
• D. Apply only MSRB rules when dealing with retail clients.

Answer: (C)

In cross-border or cross-market municipal transactions, the dealer must operate under the full legal framework that applies to the deal. The right approach is to comply with all applicable securities laws and MSRB rules and to ensure transparent, fair treatment of clients. This means performing the necessary due diligence on foreign regulatory requirements, providing complete and accurate disclosures, seeking fair and reasonable pricing (best execution where applicable), and avoiding conflicts of interest or misrepresentation. Relying only on issuer policies or applying a subset of rules ignores other laws that may govern the transaction and can lead to unfair treatment or regulatory risk. These transactions require a comprehensive, diligent approach that respects both the MSRB framework and any relevant securities laws across jurisdictions.