Brokers and dealers would have to seek the most favorable terms for their customers in U.S. municipal bond trades under a proposal to create a "best execution" standard for the $3.7 trillion municipal market. Currently, the market only has a fair-pricing standard, but no requirement for dealers to put clients' interests first. The Municipal Securities Rulemaking Board said the draft rule, released Wednesday, resembles best-execution standards for equities and corporate bonds. "The draft rule requires brokers, dealers and municipal securities dealers to use reasonable diligence in seeking to obtain for their customer transactions in municipal securities the most favorable terms available under prevailing market condition," the board, a self-regulatory organization made up of banks, brokers, issuers and advisers, said in its proposal. Retail investors are the backbone of the municipal market, and regulators are growing increasingly alarmed that they are not given fair prices on
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