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Municipal Advisor Representative
Qualification Examination
(Series 50)
Municipal Advisor Representative
Qualification Examination
(Series 50)
1300 I Street NW, Suite 1000 | Washington, DC 20005 | |
© 2016 Municipal Securities Rulemaking Board | Last Updated August 2016
This content outline is intended to help candidates prepare for the Municipal Advisor Representative
Qualification Examination (Series 50) by providing relevant information about the examination itself and
sharing pertinent information about the content areas that are covered. The sample questions that appear
on page 11 are similar to the types of multiple-choice questions that will appear in the examination. In
addition, regulatory and industry websites and other references that may be useful in preparing for the
examination are provided at the end of the outline.
The questions used in the examination are reviewed and updated on a regular basis and reflect current
market practices. Questions that test new rules or amendments will be included in the examination after
the effective date of the rule or rule change. Existing questions on rules or portions of rules that have been
deleted will be removed from the examination prior to the effective date of the amendment. The Series
50 exam is developed and maintained by the Municipal Securities Rulemaking Board, the self-regulatory
organization that establishes rules for municipal securities dealers and municipal advisors.
The Dodd-Frank Wall Street Reform and Consumer Protection Act required that the MSRB develop a
regulatory framework for municipal advisors, including establishing professional standards. The Series
50 examination for municipal advisor representatives was developed as a part of the fulfillment of that
mandate. A municipal advisor representative is a natural person associated with a municipal advisor who
engages in municipal advisory activities on the municipal advisor’s behalf.
The content areas covered by the examination were determined by a panel of practicing municipal
advisor professionals who represented various types of municipal advisors that were nationally diverse.
The examination is intended to measure the degree to which candidates have demonstrated knowledge
and skills necessary to perform the responsibilities of a municipal advisor representative.
In order to register for the Series 50 examination, a candidate must be associated with a municipal advisor
firm that is registered with both the Securities and Exchange Commission and the MSRB.
Municipal Securities Rulemaking Board 1
The Series 50 examination consists of 100 multiple choice questions that are organized under the following
major functions:
Number of
Understanding SEC and MSRB Rules Regarding Municipal Advisors
Understanding Municipal Finance
Performing Issuer’s Credit Analysis and Due Diligence
Structuring, Pricing and Executing Municipal Debt Products
Understanding Requirements Related to the Issuance of Municipal Debt
Each candidate receives a unique sample of 100 questions that are drawn from the collection of test
questions available for the examination, subject to two constraints—the content covered by the examination
and the overall difficulty of the examination is the same for all candidates.
Consistent with the administration of other securities industry examinations, this 100-question examination
is administered at a computer. The examination also includes 10 additional questions, which serve to pretest
items to ensure that they meet acceptable measurement standards prior to use in future administrations of
the Series 50 examination. These 10 pretest items are randomly distributed throughout the examination and
do not count for scoring purposes. Candidates receive a short tutorial providing details of the examination
administration prior to initiating the test. Including the 30 minutes permitted for the tutorial, candidates
are allowed three and one-half hours to complete the Series 50 examination.
A candidate must select one of the four answer choices that are presented for each question in order to
complete the examination. Candidates should remember these relevant points about the examination:
ƒƒThe exam consists of a total of 110 items (100 scored and 10 unscored).
ƒƒEach correct answer of a scored item is worth one point.
ƒƒIt is to the candidate’s advantage to answer each question, even if the candidate is uncertain
of the correct response.
ƒƒCandidates are given three hours to complete the examination.
ƒƒAny materials needed to complete the examination will be provided by the test center or
within the test itself.
Municipal Securities Rulemaking Board 2
A candidate’s total score will be equal to the number of questions answered correctly. To establish the
passing score for the examination, the MSRB administered a pilot exam based on the content of the
final outline. Following a well-established practice known as standard setting, a committee of industry
professionals working as municipal advisors evaluated the results of the pilot, assessing such factors as
content difficulty and industry trends, among others. The passing score set by the Board for the Series 50
exam is 71%.
In order to ensure that its examinations constitute valid tests of the qualifications of persons who take
them, the MSRB has instituted various procedures, in the question-writing and administrative phases,
which are designed to preserve the confidentiality of the examinations. On several occasions, the MSRB
has found it necessary to take legal action, alleging copyright violations, against securities training schools
that had used in their training material questions and answers that were determined to have been taken
from questions contained in MSRB qualification examinations. In addition, candidates are advised that the
practice of “debriefing” persons who have taken a qualification examination may not only give rise to an
infringement of the MSRB’s copyright but would be a violation of MSRB rules for the candidate. MSRB Rule
G-3(f) on “Confidentiality of Qualification Examinations” states that:
No associated person of a broker, dealer, municipal securities dealer, or municipal advisor shall:
(i) in the course of taking a qualification examination required by this rule receive or give
assistance of any nature;
(ii) disclose to any person questions, or answers to any questions, on any qualification
examination required by this rule;
(iii) engage in any activity inconsistent with the confidential nature of any qualification
examination required by this rule, or with its purpose as a test of the qualification of persons taking
such examinations; or
(iv) knowingly sign a false certification concerning any such qualification examination.
Municipal Securities Rulemaking Board 3
FUNCTION 1: Understanding SEC and MSRB Rules Regarding Municipal Advisors
(12% of exam questions)
1.1 Assess application of SEC and MSRB rules to firm activities
Educate clients on implication of rules for issuers
Use various resources (web, books, internal policies, etc.) to gain understanding of
regulatory framework and rules
Maintain records for compliance with SEC and MSRB rules
Knowledge Required
Dodd-Frank anti-fraud provision
SEC rules: Activities requiring registration as a municipal advisor; municipal advisor
SEC Rules
Exchange Act 15B Exchange Act 17a-3 Exchange Act 17a-4
Registration of municipal advisors
Records to Be Made by Certain Exchange Members, Brokers,
and Dealers
Records to Be Preserved by Certain Members, Brokers, and
MSRB rules governing activities of municipal advisors (e.g., professional qualification;
fiduciary duty; recordkeeping)
MSRB Rules
Rule A-12
Rule D-11
“Associated Persons”
Rule D-13
“Municipal Advisory Activities”
Rule D-14
“Appropriate Regulatory Agency”
Rule G-3
Professional Qualification Requirements
Rule G-8
Books and Records to Be Made By Brokers, Dealers, Municipal Securities
Dealers and Municipal Advisors
Rule G-9
Preservation of Records
Rule G-17
Conduct of Municipal Securities and Municipal Advisory Activities
Rule G-20
Gifts, Gratuities, Non-Cash Compensation and Expenses of Issuance
Rule G-37
Political Contributions and Prohibitions on Municipal Securities Business and
Municipal Advisory Business
Rule G-42
Duties of Non-Solicitor Municipal Advisors
Rule G-44
Supervisory and Compliance Obligations of Municipal Advisors
Municipal Securities Rulemaking Board 4
FUNCTION 2: Understanding Municipal Finance (35% of exam questions)
2.1 Identify market participants
Understand roles of participants in the issuance of municipal securities
Identify and determine the participant roles needed to complete the issuance of municipal
Develop selection criteria for participants in an issuer transaction
Monitor performance and completion of participant tasks in an issuer transaction
Knowledge Required
Definitions and categories of municipal advisor professionals: Financial advisors, pricing
consultants; investment advisers (GIC; investment of municipal bond proceeds); swap
advisors; pension funds and advisors; financial feasibility consultants; appraisers; market
consultants; rate consultants; solicitors (third-party marketers; placement agents)
Issuer participants: State governments and instrumentalities (states and state treasurers;
state agencies and authorities; state conduit issuers); municipal entities and instrumentalities;
501(c)(3)organizations; obligated persons (e.g., health care entities, private colleges); quasigovernmental agencies (Joint powers agencies, inter-local agencies); multi-state agencies
Non-issuer participants: Legal (bond/issuer counsel; disclosure counsel; tax counsel;
underwriter’s counsel; general/issuer’s counsel; trustees counsel; borrower’s counsel;
specialized counsel; product counsel (for structured products); swap counsel); market
intermediaries (broker dealers and dealer banks—underwriters, traders, placement agents,
market makers; lease marketers; solicitors for investments)
Credit enhancers/liquidity providers (bond insurer; letter of credit banks; standby
purchasers for variable rate obligations; guarantors)
Rating agencies (rating agencies; underlying ratings; absence of rating)
2.1.6Investors (retail; direct institutional (including banks, insurance companies, corporations);
mutual funds and ETFs; public entities (e.g., GSEs))
Trustees, paying agents and registrars
Verification agents
Other service providers (DTCC; CUSIP Service Bureau)
2.2 Consider possible financing solutions for municipal issuers
Understand benefits and risks of various financing products
Identify types and purpose of products
Knowledge Required
2.2.1Bonds: General obligation (limited, unlimited); revenue; special type (special tax; special
assessment; moral obligation; double-barreled); tax increment/allocation financing; taxable
municipal securities (Build America Bonds (BABs); other taxable municipal bonds; tax credit
bonds); notes (e.g., variable rate demand obligations (VRDOs); tax anticipation notes (TANs);
tax and revenue anticipation notes (TRANs); construction loan notes (CLN); tax-exempt
commercial paper); leases; installment purchase agreements and certificates of participation
(annual appropriation leases; abatement leases; installment purchase provisions); bank loans
(securities; non-securities transactions); other funding alternatives (other federal programs;
grants; state or federal appropriations; pay-as-you-go funding; bond banks and clean water
Municipal Securities Rulemaking Board 5
2.2.2 2.2.3 2.2.4 2.2.5 Bond proceeds investment strategies: Escrow (e.g., open market, SLGS); Treasury,
federal agencies, investment contracts (GICs; forward delivery agreements); money market
instruments (certificates of deposit; commercial paper); investment of bond proceeds
(investment suitability; investment policy of issuer; liquidity and spending schedules;
indenture requirements)
Municipal fund securities (Local Government Invest Pools (LGIP) and 529 College Savings
Swaps/derivatives: swap markets; market participants; use of derivative products in
liabilities structuring and management: types and structures (mark-to-market (MTM), fixed/
floating, basis, options); applications: hedging (cash flows, future issuance); risks (basis risk,
termination, collateral, counterparty); ISDA documentation: credit terms, collateral and legal
provisions; suitability and use of swap advisors
Risks associated with products: Types (credit risk, counterparty risk, interest rate risk;
liquidity risk (for variable debt), market access risk, basis risk, political risk); issuer risk
management (policies, monitoring, metrics)
2.3 Perform quantitative analysis
Knowledge Required
2.3.1 Bond valuation Security calculations and quoting conventions: Mathematical calculations for bonds (day
count conventions, accrued interest; price vs. price plus accrued interest (clean price and
dirty price); price-yield conversion (yield to maturity (YTM), yield to call (YTC), YTP, YTW, cash
flow yield (CFY); dollar value of a basis point (DV01); dollar price of 1/32nd; portfolio based
yields (CFY; true interest cost (TIC); option-adjusted TIC); net interest cost (NIC); premiums
and discounts; average life; arbitrage yield limit) Valuation of bonds: Spot rates derived from optionless yield curve; discounting of certain
cash flows; valuation of call option given uncertain interest rates; new issue structuring;
duration, convexity and option-based risk measures
2.3.2Refundings Refunding considerations: present value (PV) savings; forfeited option value; future
value savings; “high to low” advance refunding; “low to high” advance refunding; other
considerations (e.g., covenants) Current refunding Advance refunding: Net cash; full net cash; crossover
Interest rate derivatives valuation fundamentals (e.g., swaps; options)
Defeasance of bonds
Monitor current interest rates and market conditions
Determine optimal timing for issuer transactions
Evaluate municipal supply
Understand general factors affecting interest rates
Knowledge Required
Monetary policy
Fiscal policy
Economic policy (e.g., supply and demand)
Other factors affecting interest rates
Municipal Securities Rulemaking Board 6
FUNCTION 3: Performing Issuer’s Credit Analysis and Due Diligence (12% of exam
Review relevant financial information
Consider feasibility and suitability of financing plan
Evaluate cost and benefits of obtaining credit rating
Evaluate credit factors that may impact ability to access market
Evaluate issuer risk tolerance
Financial reporting and accounting
Knowledge Required
Economic and demographic factors
Financial information: budgets; financial plans
Financial statements: Comprehensive Annual Financial Reports (CAFR (annual audits))
Debt and liabilities
Components of financial statements: Derivative’s disclosure; auditor’s opinion; pension
liabilities; Other Post Employment Benefits (OPEBs)
Performing due diligence to know your client
Distressed events (e.g., bankruptcy, default)
FUNCTION 4: Structuring, Pricing and Executing Municipal Debt Products (31% of
exam questions)
Define characteristics of proposed transaction
Assist issuer with creation of debt model
Articulate structure of proposed transaction to issuer and other participants
Structure financing according to financing plan
Determine need for credit enhancement (i.e., insurance)
Knowledge Required
Debt service structure: serial, term bonds
Legal/credit provisions
Redemption/call/prepayment provisions
Proceed funds commonly created: project/construction/acquisition fund; reserve fund;
revenue fund; debt service fund
Coverage requirements/ratios
Additional bonds requirements
4.1.7 Default provisions and remedies
Put options/tender options
When/how to use expert work products (e.g., feasibility consultants, etc.): types, issues
4.1.10 Non-appropriation provisions
4.1.11 Federal and state tax treatment: interest income; alternative minimum tax; amortization
of premium/accretion of discount; capital gains/loss; taxable securities; bank qualified; de
minimis rule
Municipal Securities Rulemaking Board 7
Price negotiated bond transactions
Research comparable transactions
Understand factors considered in pricing
Obtain indicative scales/pricing from underwriters
Evaluate proposed pricing strategy (account, timing, etc.)
Conduct discussions with existing and potential investors
Knowledge Required
Comparable securities pricing
Presale orders
Effects of flipping on pricing
Market volatility
Bank qualified vs. non-bank qualified
Cost and value of ratings and credit enhancements
Economic indicators
Par/premium/discount bonds (couponing)
4.3 Conduct competitive sales
Evaluate and determine method of sale
Knowledge Required
Methods of primary financing: public offering (competitive sale, negotiated sale); private
placement; direct loans
4.3.2 Dealers (sales and trading): underwriting syndicate preliminary pricing; priority of orders;
order period
4.4 Participate in disclosure preparation process
Knowledge Required
Primary sources of information: Notice of Sale; official statement (preliminary, final); issuer/
borrower websites; new issue wires
Aggregators of information: EMMA (issuer/borrower information, trading/pricing
information); print and electronic news services
Municipal Securities Rulemaking Board 8
FUNCTION 5: Understanding Requirements Related to the Issuance of Municipal
Debt (10% of exam questions)
5.1 Monitor for arbitrage rebate compliance (ARC)
Assist with preparation and filing of continuing disclosure obligations
Knowledge Required
5.1.1 Broker/dealer registration requirements related to loans vs. the issuance of securities
Taxable vs. tax-exempt issues: private activity limits; private activity TEFRA requirements
Issuer disclosure: initial offering (official statement content, municipal advisor
responsibilities, underwriter’s responsibilities); continuing disclosure (annual filings; event
5.1.4Arbitrage: Transferred proceeds; yield restriction; rebate; tax rules for investment of
proceeds; project funds (general spending exceptions and temporary periods); exception
for small issuers; debt service funding limitations; record keeping requirements (time period,
documents retained, document format)
5.2 Develop process for post-issuance compliance
Knowledge Required
Written post-issuance policies
Issuer recordkeeping
Municipal Securities Rulemaking Board 9
The following list of reference materials has been suggested by municipal advisors as having been helpful
in the performance of the job functions of a municipal advisor. It is not intended to be all-inclusive, nor is
it intended to specifically represent knowledge covered on the examination.
Ballard, Frederic L. Jr., ABCs of Arbitrage. Tax
Rules for Investment of Bond Proceeds by
Municipalities. Chicago, IL: ABA Book Publishing
California Debt and Investment Advisory
Commission, California Debt Issuance Primer.
Fabozzi, Frank J. and Steven V. Mann (ed.), The
Handbook of Fixed Income Securities. Seventh
edition. New York, NY: McGraw-Hill (2005)
Hull, John C., Fundamentals of Futures and
Options Markets. Eighth edition. Upper Saddle
River, NJ: Prentice-Hall (2013)
Internal Revenue Service. Information for the
Tax Exempt Bond Community.
Lamb, Robert, James Leigland, Stephen P.
Rappaport, The Handbook of Municipal Bonds
and Public Finance. New York, NY: New York
Institute of Finance / Simon & Schuster (1993)
Lamb, Robert, Stephen P. Rappaport, Municipal
Bonds: The Comprehensive Review of Municipal
Securities and Public Finance. New York, NY:
McGraw-Hill Companies (1987)
Mintz, Joel A., Larry Allen Bakken, Ronald H.
Rosenberg, The Fundamentals of Municipal
Finance. Chicago, IL: ABA Book Publishing (2010)
Municipal Securities Rulemaking Board. MSRB
Education Center. Washington, DC: MSRB.
Municipal Securities Rulemaking Board. MSRB
Rule Book. Washington, DC: MSRB. http://www.
Mysak, Joe, Encyclopedia of Municipal Bonds.
Hoboken, NJ: John Wiley & Sons, Inc. (2012)
Securities and Exchange Commission, Office
of Municipal Securities.
SIFMA, The Fundamentals of Municipal Bonds.
Sixth edition. Hoboken, NJ: John Wiley & Sons,
Inc. (2011)
Temel, Judy Wesalo, The Fundamentals of
Municipal Bonds. Fifth Edition. New York, NY:
John Wiley & Sons, Inc. (2001)
White, Wilson, The Municipal Bond Investment
Advisor. Chicago, IL: Probus Professional
Publishing (1991)
Marlin, George J., Joe Mysak, The Guidebook to
Municipal Bonds: The History, The Industry, The
Mechanics, New York, NY: Thomson Financial
Municipal Securities Rulemaking Board 10
The following questions are similar in format and content to questions on the Series 50 examination.
The sample questions, however, are not intended to parallel either the level of difficulty or the subject
coverage of the examination. The sample questions are only intended to assist candidates in preparing for
the types of multiple-choice questions that will appear on the examination.
General information which may be
provided to a municipal entity without
being considered advice includes all of the
following except:
(A) Information regarding a financial
institution’s currently available
(B) Recommendations regarding the
municipal entity’s refinancing
Current prices and yields on the
municipal entity’s outstanding bonds
Comparison of the risks and
advantages of variable rate debt
Non-compliance with federal tax law
requirements applicable to a tax-exempt
bond transaction may result in which two of
the following?
Interest on the bonds is taxable
for federal income taxes
purposes as of issuance of
the bonds.
An investor is likely to analyze all of the
following information to determine whether
the anticipated earnings of a project would
support a municipal revenue bond issue
Tax collection record
Additional bonds test
Demographic report
Feasibility study
Which two of the following would be
advantages to an issuer of investing in U.S.
Treasury securities rather than entering into
guaranteed investment contracts (GICs)?
Increased trading liquidity
Reduced counterparty risk
Negotiable maturity dates
IV. Negotiable principal repayment
(A) I and II
(B) II and III
(C) I and IV
(D) III and IV
III. Additional arbitrage rebate
penalties may be owed by the
A municipal revenue bond has a net
revenue pledge. From the debt service
reserve fund, the flow of funds then goes
into which fund?
Debt service fund
Operations and maintenance fund
Renewal and replacement fund
Revenue fund
Interest on the bonds is taxable
for federal income tax purposes
as of the date of the
IRS determination.
The borrower is prohibited
from using tax-exempt debt for
a period of five (5) years.
I and III
I and IV
II and III
II and IV
ANSWERS 1. (B) 2. (A) 3. (A) 4. (A) 5. (C)
Municipal Securities Rulemaking Board 11

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