MSRB Sets New Transparency Standard for Municipal Variable Rate Securities

Date: May 16, 2011

Contact: Jennifer A. Galloway, Chief Communications Officer
             (703) 797-6600


Alexandria, VA – The Municipal Securities Rulemaking Board (MSRB) announced today it is providing a new level of transparency for municipal variable rate securities by making information publicly available that allows investors to assess the level of demand, liquidity provisions and auction procedures for the securities. The new information, along with current interest rates for variable rate securities, is available on the MSRB’s Electronic Municipal Market Access (EMMA) website, at

Beginning today, liquidity facility documents for variable rate demand obligations (VRDOs) such as letters of credit and stand-by bond purchase agreements are available on EMMA, in addition to the identity of the securities’ tender agent, the par amount of the VRDO held as a bank bond (if any) and the par amount of the VRDO held by parties other than the liquidity provider (if any).

Also available on EMMA beginning today is bidding information for auction rate securities (ARS) that shows information describing auction procedures and how an interest rate for a successful auction was determined. EMMA also will post a bid-to-cover ratio for each auction rate security.

“Today’s changes on EMMA raise transparency of municipal variable rate securities to an unprecedented level,” said MSRB Executive Director Lynnette Kelly Hotchkiss. “Investors and others can use the newly available documents and data to assess market demand and liquidity provisions, and have access to the identities of key parties to variable rate securities transactions,” she said.

The MSRB began providing interest rate information on EMMA about ARS and VRDO in 2009, after instability in these markets raised significant disclosure and market transparency concerns. “The MSRB is the only source of current, market-wide interest rates for these types of securities, and today, we are greatly enhancing the availability of key documents and data for municipal variable rate securities,” Hotchkiss said.

All information about variable rate securities is available in a consolidated format for each security on EMMA’s security detail pages.

EMMA is a centralized online database that provides free public access to official disclosure documents associated with municipal bonds issued in the United States. EMMA also makes available real-time trade data for approximately 1.5 million outstanding municipal bonds, providing transparency of information for investors in this important financial market and makes it easy — and free — for them to access bond disclosures and pricing data that can inform investment decisions. Information available on EMMA includes snapshots of daily trade data based on security size, sector, maturity and source of repayment, educational material about bonds and their associated documents, and a comprehensive glossary of municipal bond terms.

The MSRB protects investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. The MSRB fulfills this mission by regulating the municipal securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. To further protect market participants, the MSRB provides market transparency through its Electronic Municipal Market Access (EMMA®) website, the official repository for information on all municipal bonds. The MSRB also serves as an objective resource on the municipal market, conducts extensive education and outreach to market stakeholders, and provides market leadership on key issues. The MSRB is a self-regulatory organization governed by a 21-member board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is overseen by the Securities and Exchange Commission and Congress.