How are municipal bonds traded?
The municipal, or “muni,” market does not operate via a centralized exchange. Instead, it is an over-the-counter market—a network of dealers and brokers that connect buyers and sellers. Some bonds are “actively traded,” meaning that they are traded on a regular basis. However, many investors buy and hold their bonds until they mature, so certain municipal bonds may not trade for months or years at a time. Securities dealers that trade municipal securities must register with the Municipal Securities Rulemaking Board (MSRB), which sets the rules for the municipal bond market subject to the oversight of the U.S. Securities and Exchange Commission (SEC).
