Suitability for SMMPs
Dealers are exempt from the suitability requirement if a client is a sophisticated municipal market professional (SMMP). Recall that SMMPs are customers that are one of the following:
- • Banks
- • Savings and loan associations
- • Insurance companies
- • Investment companies
- • Registered investment advisers
- • Any other person or entity having total assets of at least $50 million
And the broker-dealer must reasonably believe it is capable of independently evaluating investment risks and market value. An SMMP must affirmatively indicate that it is exercising independent judgment in evaluating the recommendations of the broker-dealer.
With respect to SMMPs, a broker-dealer does not have any obligation to disclose