Final answer:
Good delivery under MSRB rules for municipal securities involves the securities being transferable, in the correct denominations, without restrictions, and accompanied by the necessary legal documents.
Step-by-step explanation:
Under the Municipal Securities Rulemaking Board (MSRB) rules pertaining to registered municipal securities, good delivery refers to the condition that securities must satisfy to be transferable upon settlement of a trade. Generally, for municipal securities to be considered in good delivery form, they must be in the appropriate denominations, fully registered in the name of the seller or endorsed to the buyer and be accompanied by the necessary legal documents. Additionally, the securities should not have any restrictions that prevent their transfer.
Examples of requirements for good delivery include that the securities must not have restrictions preventing their sale, they should be in denominations that conform to the trade, and any necessary endorsements or assignments must be properly executed. Certificates should also be physically intact and should not have any mutilations or alterations that could question their validity.
Ensuring good delivery is critical as it affects the settlement process. If the securities do not meet the standards of good delivery, the transaction may be delayed, or the buyer may reject the delivery, potentially leading to additional costs or losses for the seller.