A general term referring to securities issued by local governmentalsubdivisions such as cities, towns, villages, counties or special districts, as well as securities issued by states and political subdivisions or agencies of states. A prime feature of these securities is that interest or other investment earnings on them usually are excluded from gross income of the holder for federal income tax purposes. Issuers of municipal securities are exempt from most federal securities laws.

Last updated on May 14, 2009 by Jack Parsons