The Regional Firm: Its Customers, Traders, and Institutional Salespeople
Mychele Lindvall Vice President Manager of Institutional Sales and Trading Seattle Northwest Securities Corporation
In this chapter, I describe the mission and nuances of the “regional” municipal trader, institutional salesperson, and his or her customers.
There are several factors to consider as we look to understand the expertise of the regional trader and salesperson. These factors focus on:
• States with a personal income tax
• Regional economy
States with a Personal Income Tax
Most states with a personal income tax treat interest, or in the case of mutual funds dividends, paid by municipal issuers outside their state as taxable. There are some exceptions to this. Utah, for example has a personal income tax, but does not tax income on bonds issued in states that do not tax Utah bonds. State of Washington residents do not have a personal income tax, so by this very virtue, issuers in this state enjoy reciprocity with Utah. This is the case in several states. The local personal income tax can factor into the relative value of a bond issued in a particular state.
The demographics of the state often play an important role in how a state and local municipal bond trade. For example, Montana has a relatively high personal income tax. A trader or salesperson might conclude accordingly that bonds issued in Montana ...