What is the purpose of the MSRB’s anti-manipulation expectations?

• A. To ensure that all quotes are published in real time.
• B. To promote higher commissions for dealers.
• C. To permit price manipulation if it benefits clients with consent.
• D. To prevent schemes that distort price formation and mislead investors in the municipal market.

Answer: (D)

Anti-manipulation expectations are about preventing any actions that distort price formation or mislead investors in the municipal market. The MSRB prohibits activities that could influence the market price or create a false impression of supply, demand, or value. This covers things like spreading false information, trading practices intended to move prices, or colluding to mislead investors. The rules apply regardless of any client consent or claimed benefit, because allowing manipulation would undermine fairness, transparency, and investor protection. So the purpose is to prevent schemes that distort price formation and mislead investors in the municipal market.