SEC Approves Continuing Disclosure Through EMMA

Date: December 8, 2008

Contacts:        MSRB, Jennifer A. Galloway
                      (703) 797-6600
                      jgalloway@msrb.org

                      SEC, Kevin Callahan 
                      (202) 551-4120
                      callahank@sec.gov

 

SEC, MSRB: NEW MEASURES TO PROVIDE MORE TRANSPARENCY THAN
EVER BEFORE FOR MUNICIPAL BOND INVESTORS

Washington, D.C., – The Securities and Exchange Commission today announced that it has unanimously approved measures that will shine more light than ever before on the municipal securities market by tapping the power of the Internet.  For the first time, investors will have a free, one-stop way to find municipal bond information online to help them make investment decisions.

The SEC has worked with the Municipal Securities Rulemaking Board (MSRB) to correct a glaring deficiency in the $2.6 trillion municipal market, in which two-thirds of the securities are owned by individual investors.  Unlike investors in corporate securities who have direct access to free company information through the SEC’s EDGAR system, average investors in municipal securities currently have no free and convenient way to get important information about the municipal bonds in which they invest. 

Currently, municipal securities investors who want ongoing disclosure information about a municipal bond – such as annual financial data or a material event like a downgrade or default – first must locate it on their own at one of the four Nationally Recognized Municipal Securities Information Repositories (NRMSIRs).  Then once they find a source, investors come to find out that they must pay significant fees to get the information they want, and then may experience considerable delays while waiting for the documents to be delivered to them by mail or fax. 

“For the first time, millions of individual investors in municipal bonds will have free and instant access to information about their investments, similar to the way they can obtain information about public companies,” said SEC Chairman Christopher Cox.  “With liquidity problems of municipal auction rate securities and rating downgrades of municipal bond insurers contributing to the current credit crisis, the disclosure and transparency of the municipal markets have never been more critical.  Municipal securities investors need to know what they own.  Now they will no longer have to go to such extensive and expensive lengths to find out.”

The rule amendments approved by the SEC designate the MSRB as the central repository for ongoing disclosures by municipal issuers.  Under a separate MSRB rule change, its Electronic Municipal Market Access (EMMA) system would make these disclosures available to investors in the same manner that the SEC’s EDGAR system does for corporate disclosures. 

Ronald A. Stack, Chair of the MSRB, said, “This historic action by the SEC will improve the flow of information in the municipal market and enable more informed investors.  The MSRB is gratified by the SEC’s support for the transparency and accessibility that our EMMA system can provide.”

EMMA will operate as a consolidated, online portal where investors can instantly access, for free, all of the key information produced by municipal bond issuers about their bonds.  Offering documents, real-time trade prices, and education resources already are available on EMMA at www.emma.msrb.org.

In order to provide adequate transition time, the SEC’s rule amendments and the MSRB’s rule change will be effective on July 1, 2009.

The full text of the SEC’s rule amendments has been posted to the SEC Web site.


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 Congressionally-chartered, 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 subject to oversight by the Securities and Exchange Commission.