<PAGE> PAGE 1
000 B000000 12/31/96
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000 J000000 A
001 A000000 BULL & BEAR MUNICIPAL SECURITIES, INC.
001 B000000 811-03934
001 C000000 2127850900
002 A000000 11 HANOVER SQUARE
002 B000000 NEW YORK
002 C000000 NY
002 D010000 10005
003 000000 N
004 000000 N
005 000000 N
006 000000 N
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007 C020100 BULL & BEAR MUNICIPAL INCOME FUND, INC.
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008 A00AA01 BULL & BEAR ADVISERS, INC.
008 B00AA01 A
008 C00AA01 801-801-29
008 D01AA01 NEW YORK
008 D02AA01 NY
008 D03AA01 10005
011 A00AA01 INVESTOR SERVICE CENTER, INC.
011 B00AA01 8-29751
011 C01AA01 NEW YORK
011 C02AA01 NY
011 C03AA01 10005
012 A00AA01 DST SYSTEMS, INC.
012 B00AA01 84-00448
012 C01AA01 KANSAS CITY
012 C02AA01 MO
012 C03AA01 64105
013 A00AA01 TAIT, WELLER & BAKER
<PAGE> PAGE 2
013 B01AA01 PHILADELPHIA
013 B02AA01 PA
013 B03AA01 19102
014 A00AA01 BULL & BEAR SECURITIES, INC.
014 B00AA01 8-31732
015 A00AA01 INVESTORS BANK & TRUST COMPANY
015 B00AA01 C
015 C01AA01 BOSTON
015 C02AA01 MA
015 C03AA01 02111
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022 A000004 CAIN BROTHERS, SHATTUCK & CO. INC.
022 B000004 ----------
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022 A000006 WHEAT FIRST SECURITIES
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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SIGNATURE JOSEPH LEUNG
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Bull & Bear Municipal
Income Fund, Inc. Annual Report and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000736952
<NAME> Bull & Bear Municipal Income Fund, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Dec-31-1996
<EXCHANGE-RATE> 1.000
<INVESTMENTS-AT-COST> 11,281,544
<INVESTMENTS-AT-VALUE> 11,748,143
<RECEIVABLES> 229,089
<ASSETS-OTHER> 928
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 11,978,160
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 486,870
<TOTAL-LIABILITIES> 486,870
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,536,695
<SHARES-COMMON-STOCK> 700,412
<SHARES-COMMON-PRIOR> 902,653
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<ACCUMULATED-NET-GAINS> (512,004)
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 11,491,290
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 818,933
<OTHER-INCOME> 0
<EXPENSES-NET> 235,999
<NET-INVESTMENT-INCOME> 582,934
<REALIZED-GAINS-CURRENT> 22,276
<APPREC-INCREASE-CURRENT> (523,058)
<NET-CHANGE-FROM-OPS> 82,152
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 596,590
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 59,832
<NUMBER-OF-SHARES-REDEEMED> 337,526
<SHARES-REINVESTED> 26,039
<NET-CHANGE-IN-ASSETS> (4,728,741)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (534,280)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 84,516
<INTEREST-EXPENSE> 6,998
<GROSS-EXPENSE> 272,900
<AVERAGE-NET-ASSETS> 14,085,625
<PER-SHARE-NAV-BEGIN> 17.04
<PER-SHARE-NII> .69
<PER-SHARE-GAIN-APPREC> (.62)
<PER-SHARE-DIVIDEND> (.70)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.41
<EXPENSE-RATIO> 1.68
<AVG-DEBT-OUTSTANDING> 98,710
<AVG-DEBT-PER-SHARE> .01
</TABLE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON INTERNAL CONTROL STRUCTURE
SHAREHOLDERS AND BOARD OF DIRECTORS
BULL & BEAR MUNICIPAL SECURITIES, INC.
NEW YORK, NEW YORK
In planning and performing our audit of the financial statements of Bull & Bear
Municipal Income Fund, a series of shares of Bull & Bear Municipal Securities,
Inc., for the year ended December 31, 1996, we considered its internal control
structure, including procedures for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of Form N-SAR, not
to provide assurance on the internal control structure.
The management of the Fund is responsible for establishing and maintaining an
internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of internal control structure policies and procedures. Two of the
objectives of an internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition, and that transactions are executed in
accordance with management's authorization and recorded properly to permit
preparation of financial statements in conformity with generally accepted
accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses, as defined above, as of
December 31, 1996.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission, and should not be used for any other
purpose.
PHILADELPHIA, PENNSYLVANIA
JANUARY 17, 1997
<PAGE>
BULL & BEAR MUNICIPAL INCOME FUND
A Special Meeting of Shareholders ("Special Meeting") of Bull & Bear Municipal
Income Fund, a series of Bull & Bear Municipal Securities, Inc. ("Prior Fund")
was held on September 19, 1996 pursuant to notice given to all shareholders of
record at the close of business on August 8, 1996. At the Special Meeting,
insufficient votes were obtained to approve charter amendments of Prior Fund
that would result in the conversion of Prior Fund from open-end to closed-end
status, deletion of Prior Fund's investment restrictions on authority to borrow
money, secure indebtedness and purchase securities with conditions on resale,
and amendment of Prior Fund's investment restriction on authority to issue
senior securities with 368,646 shares voting in favor of the proposal, 89,237
shares voting against the proposal, and 54,319 shares abstaining.
A second Special Meeting of Prior Fund was held on October 23, 1996 pursuant to
notice given to all shareholders of record at the close of business on September
30, 1996. At the Special Meeting, shareholders approved charter amendments of
Prior Fund that would result in the conversion of Prior Fund from open-end to
closed-end status, deletion of Prior Fund's investment restrictions on authority
to borrow money, secure indebtedness and purchase securities with conditions on
resale, and amendment of Prior Fund's investment restriction on authority to
issue senior securities with 469,818 shares voting in favor of the proposal,
72,038 shares voting against the proposal, and 31,878 shares abstaining.
