What details are typically required on a municipal trade confirmation related to principal vs. agency transactions?

• A. Whether the firm acted as agent, the price/yield, and any compensation like markups or commissions
• B. The issuer’s rating and credit improvement plan
• C. Whether the firm acted as principal or agent, the price/yield, and any compensation like markups or commissions
• D. The settlement date and coupon only

Answer: (D)

When a municipal trade confirmation is issued, the most important details relate to how the trade was executed, the price or yield at which it was made, and any compensation the dealer receives. Specifically, the confirmation must show whether the firm acted as principal or as an agent, the price or yield of the trade, and any compensation such as markups, markdowns, or commissions. This information makes clear who was making the trade, how much the investor paid or received in yield, and exactly what the dealer earned, which is essential for transparency. Merely listing the settlement date and coupon does not convey who was taking on the risk (principal vs agent) or the total cost to the investor, so those items alone are not sufficient.