Definition of Unqualified Legal Opinion

An unqualified legal opinion is a legal opinion issued by the bond counsel (a bond attorney) for the issuer of municipal securities where there are no reservations relating to the issue. This is the best opinion an issuer of municipal securities can obtain.

Applying "Unqualified Legal Opinion" to Securities Exams:

When municipal bonds are sold to the public issuers will often obtain a legal option relating the the issues tax status and the issuer’s authority to issue the bonds. An unqualified legal opinion states that the attorney has no reservations that the issue is a legally binding obligation of the municipality and that the interest payments received by investors will be free from federal taxation. Should a bond be issued with a qualified legal opinion, it means that the tax status or other issues relating to the security are in question. It is often expensive to obtain a legal opinion for municipal issues. As a result, certain small issues of municipal bonds will not obtain a legal opinion and will therefore be known as being ex-legal. Be sure you have mastered the terminology relating to municipal bond issues prior to taking your exam. Learn all you need to know about municipal bonds in our word class textbooks, exam prep software and video classes. Pass your exam or your money back with our Greenlight money back pass guarantee.

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The Securities Insittute of America, Inc.

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