MSRB NOTICE 2010-19 (JUNE 28, 2010)


Since June 1, 2009, brokers, dealers and municipal securities dealers (“dealers”) that serve as underwriters (commonly known as “primary distributors”) of 529 college savings plans (“529 plans”) have been required to submit official statements (commonly known as “plan disclosure documents”) and amendments thereto to the Municipal Securities Rulemaking Board’s (“MSRB”) Electronic Municipal Market Access System (“EMMA”) under MSRB Rule G-32, on disclosures in connection with primary offerings, together with related information as required pursuant to MSRB Form G-32 through the MSRB Primary Market Submission Service.[1]

Unlike other municipal securities that may be subject to a finite underwriting period, the MSRB has recognized that 529 plans are subject to a continuous underwriting period, similar to open-end mutual funds.[2]  Further, under MSRB Rule G-32(b)(iii), the primary distributor is required to send any amendments to the plan disclosure document made by the issuer throughout this continuous underwriting period to the MSRB, through EMMA, along with all of the information required to be submitted by MSRB Form G-32 related to the amendment, within one business day after receipt of the amendment from the issuer or its agent. The MSRB has previously noted that this obligation to submit amendments throughout the life of the 529 plan would apply to any dealer then serving as primary distributor, regardless of whether that dealer or another dealer sent the original plan disclosure document to the MSRB.[3]

Since July 1, 2009, EMMA has served as the official repository for continuing disclosure documents submitted by issuers pursuant to continuing disclosure undertakings entered into consistent with Securities Exchange Act Rule 15c2-12 (“Rule 15c2-12”), as well as for other continuing disclosures submitted by issuers on a voluntary basis through the MSRB Continuing Disclosure Submission Service.[4]  All submissions are made available to the public for free on the EMMA website, at, and through real-time subscription services.

The MSRB would like to remind submitters of 529 plan documents and information of certain submission requirements.

MSRB Primary Market and Continuing Disclosure Submission Services - Standard of Care With Respect to Information Submitted to the MSRB, through EMMA

As the MSRB has previously noted, underwriters must exercise due care with respect to the timeliness and accuracy of the items of information provided on MSRB Form G-32 and documents submitted.  In the filing with the Securities and Exchange Commission to establish EMMA as the official repository of primary market disclosures, the MSRB noted that underwriters must be especially sensitive to the necessity of timely and accurate document submissions, as well as all related information to be supplied through MSRB Form G-32.[5]  The MSRB expects that the timing requirements of Rule G-32 will be strictly adhered to and enforced to promote the purposes of the rule and the protection of investors.[6]  The MSRB understands that certain 529 plan issuers may have updated their disclosures and published supplements on their websites that have not been submitted by the primary distributor to EMMA on a timely basis.  The MSRB views such a failure on the part of the primary distributor as a violation of MSRB Rule G-32.  It is the obligation of the primary distributor to ensure that such supplements are submitted to the MSRB, through EMMA, on a timely basis.

Similarly, under Rule 15c2-12, the primary distributor is obligated to make a determination that the 529 plan issuer has undertaken in a written agreement for the benefit of investors to provide the MSRB in an electronic format as prescribed by the MSRB, either directly or indirectly through an agent, annual financial information and, if not submitted as part of the annual financial information, then when and if available, audited financial statements.  Additionally, such continuing disclosure agreement must include undertakings that the issuer will provide the MSRB with notice, in a timely manner, of its failure to provide annual financial information on or before the date specified in the continuing disclosure agreement, if such a failure occurs, and that the issuer will provide, in a timely manner, notice of certain material events.  While some of the events listed in Rule 15c2-12 are specific to municipal bonds and have limited or no applicability to 529 plans, some events are applicable to such securities.[7]  Persons responsible for submission to the MSRB of continuing disclosure documents with respect to 529 plans should review their continuing disclosure agreements to ensure that they are making all of the expected continuing disclosure submissions in a full and timely manner.

MSRB Primary Market and Continuing Disclosure Submission Services - Word-Searchable PDF Submission Requirement Became Effective January 1, 2010

Currently, all document submissions to the MSRB must be made as portable document format (PDF) files that are configured to permit documents to be saved, viewed, printed and transmitted by electronic means.  If the submitted document is a reproduction of the original document, it must maintain the graphical and textual integrity of the original document.  Beginning January 1, 2010, all documents submitted to the MSRB Primary Market Submission Service or to the MSRB Continuing Disclosure Submission Service have been required to be word-searchable PDF files.  The word-searchable function will allow users to search for specific terms used within the submitted document through a search or find function available in most standard software packages. Diagrams, images and other non-textual elements are not required to be word-searchable due to current technical hurdles to uniformly producing such elements in word-searchable form without incurring undue costs.

The MSRB would strongly encourage submitters to submit all documents to the MSRB as native PDF or PDF normal files, which by their nature are word-searchable and also would provide benefits to the submitter in that such files generally are more easily created and result in substantially smaller file size (thereby speeding the submission process) than scanned PDF searchable image files.  Native PDF or PDF normal files also would provide benefits to EMMA users because of their smaller, more easily downloadable file size.

It is also critical that each PDF submitted to EMMA be clear and legible.  Submitters should review the PDF submission prior to and subsequent to submission to ensure its integrity, since it will appear on the EMMA public portal in the exact manner transmitted by the submitter. 

For the benefit of 529 plan disclosure submitters, the MSRB has prepared a new manual describing the registration and submission process for primary market and continuing disclosure submissions.  The manual is posted on and  

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Questions about this notice may be directed to Lawrence P. Sandor, Senior Associate General Counsel, at (703) 797-6600.  Questions about making primary market or continuing disclosure submissions to the MSRB should be directed to the MSRB Market Information Department at 703-797-6668.

June 28, 2010

[1] Prior to the launch of the MSRB Primary Market Submission Service through EMMA on June 1, 2009, primary distributors were required to submit plan disclosure documents to the MSRB under former MSRB Rule G-36.

[2] See Rule D-12 Interpretation – Interpretation Relating to Sales of Municipal Fund Securities in the Primary Market, January 18, 2001 (the “2001 Interpretation”).

[4] Prior to the launch of the MSRB Continuing Disclosure Submission Service through EMMA on July 1, 2009 and the effectiveness of certain amendments to Rule 15c2-12, issuers and obligated persons generally were contractually obligated to provide continuing disclosures under Rule 15c2-12 to various nationally recognized municipal securities information repositories.

[5] See Securities Exchange Act Release No. 59636 (March 27, 2009), 74 FR 15190 (April 2, 2009) (File No. SR-MSRB-2009-02); MSRB Notice 2009-07 (March 23, 2009).

[6] Rule G-32(b)(i)(B)(1) provides that the primary distributor of a 529 plan shall submit the plan disclosure document to the MSRB, through EMMA, within one business day after receipt of the plan disclosure document from the issuer or its designee, but by no later than the closing date, which is defined by the rule as the date of first delivery by the issuer to or through the primary distributor of 529 plans sold in a primary offering (meaning, the date on which the first sale of an interest in the 529 plan is settled with an investor).

[7] For example, the SEC recently approved amendments to Rule 15c2-12, with a compliance date of December 1, 2010, which will modify the current rule requirements.  Currently, the rule provides for the continuing disclosure agreement to include an undertaking by the issuer to notify the MSRB of any adverse tax opinions or events affecting the tax exempt status of the security. As of December 1, 2010, this category will be broadened to include “[a]dverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security.”