Wolfe & Hurst Jerry Wolfe & Hurst Bond Brokers, a division of BGC Financial, L.P.  
To all Wolfe & Hurst Municipal Bond Clients
MSRB Rule G-43 Disclosures

Wolfe & Hurst Bond Brokers ("Wolfe & Hurst"), a division of BGC Financial, L.P. ("BGCF"), is a Municipal Securities Broker's Broker ("MSBB") which acts exclusively as an agent or riskless principal in the purchase or sale of municipal bonds on behalf of undisclosed principals that are registered brokers, dealers, or municipal securities dealers.  Acting in this capacity, Wolfe & Hurst does not position municipal securities, participate in syndicates, hold customer funds, or safe-keep customer securities.  Wolfe & Hurst acts in the limited capacity of providing anonymity, communication, and contemporaneously matched orders for its clients.  Wolfe & Hurst does not exercise discretion as to the price at which customer transactions are executed or when they are executed.  We are compensated solely on the basis of commissions and markups.  A commission schedule is available to clients upon request.

Pursuant to Municipal Securities Rulemaking Board ("MSRB") Rule G-43, Wolfe & Hurst will make a reasonable effort to obtain a price for the client that is fair and reasonable in relation to prevailing market conditions.  A "bid-wanted" is defined by the MSRB as:

"... an auction for the sale of municipal securities in which:
   (A) the seller does not specify a minimum or desired price for the securities that are the subject of the auction at the commencement of the auction;
   (B) the identities of the bidders and the seller are not disclosed prior to the conclusion of the auction, other than to the broker's broker;
   (C) bidders must submit bids for the auctioned securities to the broker's broker; and
   (D) the seller decides whether to accept the winning bid."
See MSRB Rule G-43(d)(ii)
Wolfe & Hurst Bid-Wanted Auction Practices
» Unless otherwise agreed to in writing in advance of the bids-wanted, Wolfe & Hurst acts on behalf of the seller.
» Unless otherwise directed by the seller, Wolfe & Hurst will widely disseminate a bid-wanted to potential bidders, including, but not limited to, the underwriter of the issue and prior known bidders.
» If the item is of limited interest, Wolfe & Hurst will make a reasonable effort to contact dealers with specific knowledge of the issue or known interest in securities of the type being offered.
» Wolfe & Hurst will not accept bids or changes to bids after the deadline. The deadline may either be a "sharp" or an "around" time.
See MSRB Rule G-43(b)(iii)
º A "sharp" deadline is a time deadline that is fixed and not subject to later modification.
º The "around" time deadline ends upon the earliest of:
The time the seller directs Wolfe & Hurst to sell the securities to the current high bidder;
The time the seller informs Wolfe & Hurst that the bonds will not be sold in this particular auction; or
The end of the trading day, as publicly disseminated by Wolfe & Hurst prior to the bid-wanted.
» Wolfe & Hurst has adopted predetermined parameters for each bid-wanted. The Firm utilizes a proprietary algorithm developed by MuniBrokers in order to determine whether or not bids placed in a bid-wanted auction are fair and reasonable. The methodology used to create the PDP is non-discretionary, implemented systemically, and periodically tested.
º In the event that the high bid received in a bid-wanted is outside the predetermined parameters and Wolfe & Hurst believes that the bid may have been submitted in error, we may contact the bidder prior to the deadline to determine whether its bid was in fact submitted in error.
º In the event that the high bid is within the predetermined parameters, but Wolfe & Hurst believes that the bid may have been submitted in error, we must receive oral or written permission of the seller before we are able to contact the bidder to determine whether its bid was submitted in error.
º In the event that the high bid received in a bid-wanted is below the predetermined parameters, Wolfe & Hurst is required to disclose that fact to the seller and may only effectuate the trade if the seller acknowledges such disclosure either orally or in writing.
» Wolfe & Hurst will not change a bid price or offer price without the respective bidder's or seller's permission.
» We will notify the seller of the highest bid in a bid-wanted or offering.
» If the high bid or cover bid has changed, Wolfe & Hurst will disclose such change to the seller prior to execution and provide the seller with the original and changed bids.
» Once a bidder is notified that its submission is the winning bid, no additional bids will be accepted from that bidder in the same bid-wanted.
» We will not provide information about bid prices until the auction is completed, except that we may provide seller with all bid prices and the high bidder with notice that it is the winning bid prior to the end of the auction.
» Wolfe & Hurst does not provide information on a preferential basis to bidders, including but not limited to "last looks," directions to a specific bidder that it should "review" its bid, or that its bid is "sticking out."
» Wolfe & Hurst permits affiliates to place bids in a bid-wanted. We will disclose, either orally or in writing, if the high bid in a bid-wanted or offering is from an affiliate of Wolfe & Hurst.
» At no time does Wolfe & Hurst engage in self-dealing, encourage off-market bids, or take any action that works against the dealer's interest to receive advantageous pricing.

The MSRB offers additional guidance to dealers that use the services of a broker's broker.  Wolfe & Hurst advises all participants in bid-wanted auctions to review the notice, which is available at the MSRB web site.

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Copyright 2012 Wolfe & Hurst Bond Brokers, a division of BGC Financial