What is required of underwriters before bidding for or purchasing municipal securities, as per SEC Rule 15c2-12?

Under SEC Rule 15c2-12, underwriters are required to obtain and review the official statement before bidding for or purchasing municipal securities. This rule is designed to ensure that underwriters are fully informed about the details of the securities they are dealing with, as the official statement contains essential information about the issuer, the specific securities being offered, and any associated risks.

This requirement helps to promote transparency and facilitates informed decision-making by both the underwriters and potential investors. By reviewing the official statement, underwriters can better understand the financial health of the issuer, the purpose of the debt issuance, and other critical factors that influence investment risk. This process is an integral part of responsible underwriting practices in the municipal securities market, ensuring that all parties have access to necessary information that reflects the true nature of the investment.