General Securities Sales Supervisor (Series10) Practice Exam

When a dealer accepts an order for municipal bonds offered "When, As and If Issued," it allows the dealer to accept the order immediately. This term indicates that the bonds are not yet issued and that they will be available to be traded once they are officially issued. Customers can place orders for these bonds based on anticipated availability without having to wait for additional documentation, such as an official statement or the actual issuance date.

This flexibility is important since the process of issuing municipal bonds can involve various stages, and investors may want to secure their interest in an anticipated bond offering without delay. The key aspect is that the dealer is equipped to handle these orders ahead of the actual issuance, which can help maintain market liquidity and facilitate investor participation.

Orders on a "When, As and If Issued" basis do not require the dealer to have customer funds deposited in full or to wait for the official issuance date, allowing for a more responsive trading environment in the municipal bond market.