3.10.  Municipal Fund Securities

A municipal fund security is a fund of securities that is issued by a state or municipality. Investments in a municipal fund may consist of a wide variety of securities, including corporate stocks and bonds and government securities of every stripe. It is not to be confused with a municipal bond fund, which is a mutual fund consisting entirely of municipal bonds. A municipal fund security is different from a typical investment company because its issuer is a state or local government.

Because a municipal fund security is issued by a state or local government, it is exempt from the rules of the