Under MSRB rules, a control relationship exists between a municipal broker-dealer and an issuer; this must be disclosed to customers in which transactions?

• A. All of the above
• B. Primary Market selling group member only
• C. Primary Market underwriter only
• D. Secondary Market agency only

Answer: (A)

When there is a control relationship between a municipal broker-dealer and an issuer, that relationship creates a potential conflict of interest that could influence how terms are offered or allocated. The MSRB requires disclosure of this material conflict to customers in any transaction where the dealer participates with that issuer. This covers primary market activities—such as being part of the underwriting or a member of the selling group—as well as secondary market transactions where the dealer acts as an agent in trades of outstanding issues. Because the disclosure obligation applies across all the ways the dealer can interact with the issuer, it must be disclosed in all of these contexts. That’s why the best answer is that disclosure is required in all of the above scenarios.