The Reinvestment Compliance File: What Issuers Should Keep

For a bond-proceeds investment, the records an issuer keeps come in two layers: its own arbitrage and tax file, and the transaction records its Bidding Agent makes and preserves under the municipal advisor rules.

The IRS says material records of a tax-exempt issue should generally be kept for the life of the bonds plus 3 years, and the arbitrage regulations add a specific record set and retention period for the competitive-bidding safe harbor.

This page sits inside mGIC's guide to how bond-proceeds investments are competitively bid, and it covers what each layer holds and how long each clock runs.

What do the arbitrage record-retention rules require?

The issuer's file starts with the IRS record-retention guidance for tax-exempt bonds, which rests on the recordkeeping duty of IRC 6001 and says material records should generally be kept for as long as the bonds are outstanding, plus 3 years after the final redemption date.

The records the IRS lists include documentation of investments: securities trades, SLGS subscriptions, yield calculations for each investment class, investment income, guaranteed investment contracts and arbitrage rebate calculations.

Those investment records are one part of a broader post-issuance compliance effort that runs from the tax certificate through spending exceptions and the issue's arbitrage computations.

GFOA recommends that issuers adopt formal written post-issuance compliance policies and procedures, list the key documents for each issue at closing (the tax certificate, escrow documents and indenture), and identify which records to keep and how long to keep them.

GFOA also notes the limits of outsourcing: a government may hire out tasks such as arbitrage rebate computation, but it keeps ultimate responsibility for meeting its compliance procedures.

The most specific federal record set applies to a competitively bid guaranteed investment contract or an investment bought for a yield-restricted defeasance escrow, which Treasury Regulation §1.148-5(d)(6)(iii) treats as purchased at fair market value when all of its conditions are met; the conditions are on the fair-market-value safe harbor page.

Condition (E) is the retention condition: the issuer retains specified records with the bond documents until 3 years after the last outstanding bond is redeemed (Treas. Reg. §1.148-5(d)(6)(iii)(E)(1)-(5)).

How administrative costs and provider-paid fees fit into bids is the subject of the Bidding Agent fees page.

SLGS subscriptions carry their own certifications: under 31 CFR 344.2(e)(1)-(4), the subscriber certifies yield, certifies that the term is no longer than reasonably necessary to accomplish the issuer's governmental purpose, and certifies eligibility, with a duty to tell Treasury if eligibility ends.

An agent certification applies where a bank or other agent subscribes for the issuer, and SLGS subscriptions are among the records the IRS lists.

The file also feeds the IRS return: the instructions for Form 8038-T ask whether gross proceeds were invested in a guaranteed investment contract, with the provider's name and the term to the nearest tenth of a year (line 30), and ask for the qualified administrative costs taken under the GIC and defeasance-escrow rules (line 26).

The same form asks whether proceeds were invested beyond the temporary periods (line 31) and who prepared the calculations (line 32).

State law can add records of its own.

Texas Government Code §2256.025 requires a governing body to review, revise and adopt a list of qualified brokers at least annually, and §2256.023 requires the investment officer's written report at least quarterly.

Texas §2256.021 addresses ratings: an investment that requires a minimum rating under the subchapter and loses it stops being authorized while unrated, and the entity must take prudent measures to liquidate it, while the subchapter's GIC provisions require collateral rather than a provider rating.

Those provisions bind Texas entities; a state's record requirements come from its own statutes.

The bid-level records are not ceremony: in Press Release 2011-276 (December 23, 2011), the SEC described corrupted bidding as having deprived municipalities of the conclusive presumption that reinvestment instruments were purchased at fair market value.

In the same release, the SEC said more than $743 million had been recovered from financial institutions in these settlements and that 18 individuals had been indicted or had pled guilty.

What records do MSRB G-8, G-9 and SEC Rule 15Ba1-8 cover?

MSRB Rule G-8(h), SEC Rule 15Ba1-8 and MSRB Rule G-9 define the advisor's side of the file: the books and records a municipal advisor acting as Bidding Agent must make and preserve, from written communications to the documents behind each recommendation.

The recordkeeping duty comes from the permanent municipal advisor registration rules, which the SEC adopted on September 20, 2013 in Release No. 34-70462, listing an effective date of January 13, 2014.

SEC Rule 15Ba1-8 requires the advisor to make a defined set of records, and the categories include:

• all written communications sent and received relating to municipal advisory activities, regardless of format;
• check books, bank statements, ledgers and reconciliations;
• each version of the advisor's policies and procedures;
• any document material to making a recommendation, or that memorializes its basis;
• all written agreements with clients;
• the names of associated persons and the required lists of associated persons, clients over the past 5 years, and persons paid to solicit or paying to solicit;
• and consents to service of process.

Records predating July 1, 2014 are carved out.

MSRB Rule G-8(h) layers MSRB-specific records on top of the 15Ba1-8 set, and the rule-specific set includes records of gifts, of political contributions, of documents material to reviewing another party's recommendation or to a suitability determination, supervisory procedure and annual certification records, written client complaints, training and continuing education records and advertisement records.

The MSRB's advertising rule requires a separate file of all advertisements, which Rule G-8(h) mirrors in the advertisement records above; the advertising rule first took effect August 23, 2019.

The MSRB's standards of conduct for municipal advisors, at paragraph (c), require the advisor to evidence the municipal advisory relationship in a dated writing delivered before, upon or promptly after the relationship begins, stating the form and basis of compensation, the required disclosures, the scope and limits of the engagement, the termination date or trigger and the withdrawal terms, and to promptly amend it for material changes.

For the issuer, that writing is the record of who the advisor is, what the engagement covers and how it is paid.

These are the advisor's records: SEC Rule 15Ba1-8 governs the municipal advisor's books, not the issuer's tax-compliance records.

The overlap is practical: the bid results and the solicitation form come out of the advisor's solicitation, and an issuer relying on the safe harbor keeps them with the bond documents under condition (E).

The advisor-side rules are laid out in full in the guide to MSRB G-8 and G-9 recordkeeping.

What does mGIC's transaction file include?

At the conclusion of each transaction, mGIC delivers a compliance file covering its recommendations, the documents exchanged and the communications, organized around MSRB Rules G-8 and G-9 and SEC Rule 15Ba1-8 recordkeeping and reviewed by a nationally recognized compliance agent.

mGIC is an independent, SEC-registered municipal advisor and Bidding Agent whose documentation and settlement service coordinates the provider's counsel and the financing team and delivers Bidding Agent and provider certifications to bond counsel.

mGIC sells no proprietary investment product and acts as no principal in the investments it evaluates, and its fee is paid by the winning provider rather than the issuer, so the file documents a procurement rather than a sale.

What the role involves is covered in the guide to what a Bidding Agent does, and the certifications page takes the closing document set.

To have an independent advisor run a bid and deliver the file at closing, use mGIC as Bidding Agent or start with a free, no-obligation reinvestment review or conversation.

How long should the file be kept?

The IRS says material records of a bond issue should generally be kept for as long as the bonds are outstanding, plus 3 years after the final redemption date, and an issuer relying on the bidding safe harbor keeps the safe-harbor records with the bond documents until 3 years after the last outstanding bond is redeemed.

Under SEC Rule 15Ba1-8(b)(1), the advisor's books and records must be maintained and preserved for not less than five years, the first two years in an easily accessible place.

Organizational documents are kept until three years after the business ends or the advisor withdraws from registration, electronic storage is permitted where records are indexed, duplicated and access-controlled under 15Ba1-8(d), and an advisor that stops business must arrange preservation and notify the SEC.

MSRB Rule G-9(h) requires the G-8(h) records to be preserved for at least five years and stretches some categories further: political contribution records and written client complaints run at least six years, and supervisory and compliance-officer designation records run for the period of designation plus at least six years after any change.

Electronic storage that complies with 15Ba1-8(d) is deemed to satisfy the MSRB rule under G-9(k).

GFOA's guidance describes the same issuer-side period as typical practice: records are kept for the life of the bonds plus three years.

The IRS guidance addresses refunded issues as well; how it applies to a refunded issue is a determination for bond counsel.

Which records a specific issue must retain, and what a refunding, early redemption or defeasance does to these periods, are legal and tax conclusions for bond counsel and tax counsel.

Last updated 2026-10-06.

This page is general educational information about municipal finance and federal and state rules as of the date shown. It is not legal, tax or investment advice, and it is not a recommendation about any particular investment. Product availability, legality and suitability depend on the issuer, jurisdiction, governing documents and transaction-specific facts. Final legal and tax determinations remain with the issuer's bond counsel, tax counsel and other advisors.