Under MSRB rules, what is the difference between primary market communications and secondary market communications?

• A. Primary market communications relate to trading of existing issues.
• B. Secondary market communications relate to new issues.
• C. Primary market communications relate to new issues.
• D. Secondary market communications relate to issuer credit ratings only.

Answer: (C)

The key idea here is the distinction between communications about securities that are being issued (primary market) and communications about securities that are already outstanding and trading (secondary market). Primary market communications are the materials and messages used to market a new issue to investors before or at the time of issuance—things like the preliminary and final official statements and roadshow materials that describe the new issue, its terms, and the offering process. Secondary market communications, by contrast, relate to securities that have already been issued and are trading; they cover information about current trading activity, prices, yields, liquidity, and ongoing credit information, not just ratings. Therefore, the statement that primary market communications relate to new issues is the best description. The other options mix up which market they apply to or unnecessarily limit the scope to ratings.