MSRB Seeks To Provide Investors With Additional Disclosure Information

Date: July 15, 2009

Contact:            Tavia Gilchrist, Communications Specialist
                         (703) 797-6600


Proposal Would Allow Pre-Sale Disclosures and Shed Light
On Timing Of Annual Financial Disclosures

Alexandria, VA - The Municipal Securities Rulemaking Board (MSRB), in conjunction with today's consideration by the Securities and Exchange Commission (SEC) of potential amendments to its Rule 15c2-12 on municipal securities disclosure, has filed two proposals with the SEC relating to the MSRB's Electronic Municipal Market Access (EMMA) website.  The proposals would allow issuers to disseminate pre-sale disclosures through the EMMA website.  The proposals also would require underwriters of municipal securities to provide, and would permit municipal securities issuers to provide voluntarily, additional information that would assist investors and other market participants to better assess continuing disclosures available through EMMA.  EMMA, at, provides free centralized public access to all new issue disclosure documents for the municipal market.  Since July 1, EMMA has also offered access to all on-going continuing disclosures about municipal securities through the life of the securities.

The MSRB's proposals would permit an issuer, on a voluntary basis, to submit preliminary official statements and related pre-sale documents, such as notices of sale, for posting on the EMMA website. An issuer would also be able to post a hyperlink to its investor relations page or other repository of financial or operating information on its own website.  Although the MSRB is prohibited by federal statute from mandating disclosures prior to the sale of a new issue, the proposed voluntary program for pre-sale submission of these documents would provide investors and the marketplace with access to key information needed to make informed investment decisions. 

In addition to broadening the information available to the new issue market, the MSRB's proposals would provide investors and other market participants with new tools to assess continuing disclosures.  Underwriters of new issues would be required to provide additional information that would alert investors about whether, when and from whom they can expect to have access through EMMA to continuing disclosures about such bonds in the future.  Specifically, the changes would require underwriters to post on EMMA information about whether the new issue is subject to the continuing disclosure requirements of SEC Rule 15c2-12, which entities will be making submissions of continuing disclosure information, and the date by which annual financial information is expected to be submitted each year to the EMMA website.  This would allow investors to better assess their expectations about on-going disclosures when making investment decisions.

The MSRB also is proposing that municipal bond issuers be permitted to disclose through EMMA whether their financial statements have been prepared as Comprehensive Annual Financial Reports (CAFR) for which the Government Finance Officers Association (GFOA) has awarded its Certificate of Achievement for Excellence in Financial Reporting.  In addition, issuers could disclose through EMMA, on a voluntary basis, whether they have undertaken to prepare audited financial statements pursuant to generally accepted accounting principles (GAAP) as established by the Governmental Accounting Standards Board (GASB) or whether they have undertaken to submit annual financial information to EMMA within 120 calendar days after the end of the fiscal year.  This would provide an avenue for issuers, on a voluntary basis, to disclose to investors and other market participants distinctive achievements or efforts in connection with their financial reporting. 

"EMMA has proven to be an excellent tool for disseminating documents to municipal bond investors, with over 4,000 continuing disclosure submission listings on EMMA in only the first 10 days of operation," said MSRB General Counsel Ernesto Lanza.  "The goal of the MSRB is to facilitate the flow of information from issuers to investors and the general public in a manner that respects the unique role of, and does not create an undue burden on, state and local governments. These proposals represent an additional step toward making the treasure trove of information available through EMMA increasingly useful to investors."

Lanza said that the MSRB is constantly receiving new ideas from market participants and the general public for improving the effectiveness of EMMA.  In addition, the MSRB and SEC staff frequently consult on market-related issues, including the operation of the EMMA system.  He noted that the MSRB's proposed voluntary initiative for issuer disclosures regarding financial reporting achievements and undertakings is an outgrowth of such consultations.

The proposals are described in greater detail in MSRB Notice 2009-44 (July 15, 2009).

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.