MSRB Launches Continuing Disclosure Pilot of the Electronic Municipal Market Access (“EMMA”) System

Today, the Municipal Securities Rulemaking Board (the “MSRB”) implemented a pilot phase (the “continuing disclosure pilot”) of the continuing disclosure service of the MSRB’s Electronic Municipal Market Access (“EMMA”) system.[1]  Starting today, June 1, 2009, the continuing disclosure pilot will receive voluntary electronic submissions of, and make publicly available on the Internet through EMMA,[2] continuing disclosure documents and related information by issuers, obligated persons and agents acting on their behalf until the permanent EMMA continuing disclosure service commences operations on July 1, 2009.[3]  This notice describes the systems and changes that are effective today.

EMMA CONTINUING DISCLOSURE PILOT

Under Exchange Act Rule 15c2-12(b)(5), an underwriter for a primary offering of municipal securities subject to the rule currently is prohibited from underwriting the offering unless the underwriter has determined that the issuer or an obligated person for whom financial information or operating data is presented in the final official statement, or a designated agent, has undertaken in writing to provide certain items of information to the marketplace.[4]  In connection with the implementation of the continuing disclosure pilot, the continuing disclosure pilot will accept voluntary submissions of continuing disclosure documents, including but not limited to, the following items described in Exchange Act Rule 15c2-12:  (A) annual financial information concerning obligated persons; (B) audited financial statements for obligated persons if available and if not included in the annual financial information; (C) notices of certain events, if material; and (D) notices of failures to provide annual financial information on or before the date specified in the written undertaking.

Submissions of continuing disclosure documents to the continuing disclosure pilot will be made solely in electronic format by issuers, obligated persons and agents acting on their behalf through a secured, password-protected, web-based interface created through MSRB Gateway.[5] Such submissions must be made as portable document format (PDF) files, accompanied by related indexing information, through the submission processes established with respect to the EMMA continuing disclosure pilot.  No paper submissions will be accepted.  Documents submitted by issuers, obligated persons and agents will be made available to the public on the EMMA web portal.  The specific features of the EMMA web portal established with respect to the EMMA continuing disclosure service may become available for use by public users of the EMMA website on a phased-in basis during the continuing disclosure pilot. The MSRB also may make available test versions of the computer-to-computer submission processes and data stream subscription services established with respect to the EMMA continuing disclosure service on a phased-in basis during the continuing disclosure pilot. There will be no charge for the making of submissions to the continuing disclosure pilot or for accessing such documents on the EMMA web portal.

The MSRB views electronic submissions of material event notices to the continuing disclosure pilot as having been submitted to the MSRB for purposes of any existing continuing disclosure undertakings entered into consistent with Exchange Act Rule 15c2-12 pursuant to which an issuer or obligated person has undertaken to make such submissions to the MSRB. The MSRB urges, but does not require, submitters currently using the MSRB’s CDINet in connection with their material event notice filings to the MSRB to instead make submissions on or after June 1, 2009 to the continuing disclosure pilot, solely in electronic format, until such time as all submissions must be made to the permanent continuing disclosure service beginning on July 1, 2009.[6]  The MSRB takes no position with regard to whether a submission made to the continuing disclosure pilot that is made publicly available through the EMMA web portal would satisfy any other provisions of existing continuing disclosure undertakings.

The MSRB will undertake to make the submission and EMMA web portal access services available during the continuing disclosure pilot phase on substantially the same terms as established for the EMMA continuing disclosure service but reserves the right to operate any feature on a more limited basis as necessary or appropriate, in the sole discretion of the MSRB, during the pilot phase. In particular the continuing disclosure pilot will accept submissions only with respect to securities for which 9-digit CUSIP numbers have been assigned. Upon launch of the permanent continuing disclosure service on July 1, 2009, continuing disclosure documents will be accepted by EMMA for all municipal securities, including securities to which no CUSIP numbers have been assigned, commercial paper issues customarily identified by a 6-digit CUSIP number, and 529 college savings plans and other municipal fund securities. Furthermore, the permanent continuing disclosure service will introduce new features not included in the continuing disclosure pilot, including but not limited to a submitter confirmation process to provide increased assurances regarding the identity of submitters, an issuer control process to permit issuers to elect to limit which agents make submissions on their securities, and greater granularity regarding subcategories of continuing disclosure documents displayed on the EMMA web portal. The permanent continuing disclosure service also will include additional voluntary categories of continuing disclosures, subject to final approval by the Securities and Exchange Commission of the MSRB’s pending proposal with regard to such disclosures.[7]

The continuing disclosure pilot will operate for a limited period of time as the MSRB transitions to the permanent continuing disclosure service of EMMA, which is expected to commence operations on July 1, 2009. The continuing disclosure pilot will terminate automatically when the permanent continuing disclosure service of EMMA is operational.

The MSRB has designed EMMA, including the EMMA portal, as a scalable system with sufficient current capacity and the ability to add further capacity to meet foreseeable usage levels based on reasonable estimates of expected usage, and the MSRB would monitor usage levels in order to assure continued capacity in the future.

The MSRB may restrict or terminate malicious, illegal or abusive usage for such periods as may be necessary and appropriate to ensure continuous and efficient access to the EMMA portal and to maintain the integrity of EMMA and its operational components.  Such usage may include, without limitation, usage intended to cause the EMMA portal to become inaccessible by other users, to cause the EMMA database or operational components to become corrupted or otherwise unusable, to alter the appearance or functionality of the EMMA portal, or to hyperlink to or otherwise use the EMMA portal or the information provided through the EMMA portal in furtherance of fraudulent or other illegal activities (such as, for example, creating any inference of MSRB complicity with or approval of such fraudulent or illegal activities or creating a false impression that information used to further such fraudulent or illegal activities has been obtained from the MSRB or EMMA).  Measures taken by the MSRB in response to such unacceptable usage shall be designed to minimize any potentially negative impact on the ability to access the EMMA portal.

EMMA CONTINUING DISCLOSURE PILOT REGISTRATION PROCESS

Issuers, obligated persons and agents acting on their behalf are encouraged to register beginning on June 1, 2009, through MSRB Gateway, to submit their continuing disclosure documents on EMMA during the continuing disclosure pilot.[8] Click here to register to submit continuing disclosure documents to EMMA. The MSRB has published instructions for new users on how to register to the MSRB Gateway in order to make submissions of continuing disclosure documents to EMMA.[9] Registrants to the MSRB Gateway can review the EMMA Dataport Manual for Continuing Disclosure Submissions, which describes the EMMA continuing disclosure pilot submission process.[10]  

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Questions on the launch of the continuing disclosure pilot service may be directed to Leslie Carey, Associate General Counsel, Margaret C. Henry, Associate General Counsel, or Ernesto A. Lanza, General Counsel, at (703) 797-6600.  In addition, questions about the new registration and submission processes may be directed to the MSRB’s Market Information Programs staff at (703) 797-6668.

June 1, 2009

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TEXT OF CONTINUING DISCLOSURE PILOT [11]

MUNICIPAL SECURITIES RULEMAKING BOARD
ELECTRONIC MUNICIPAL MARKET ACCESS SYSTEM –
EMMA^®

EMMA CONTINUING DISCLOSURE SERVICE

The EMMA continuing disclosure service, established as a service of EMMA, receives submissions of continuing disclosure documents, together with related indexing information to allow the public to readily identify and access such documents, from issuers, obligated persons and their agents pursuant to continuing disclosure undertakings entered into consistent with Exchange Act Rule 15c2-12, at no charge to the submitter.  Submissions may be made through a choice of an Internet-based electronic submission interface or electronic computer-to-computer streaming connections.  The EMMA continuing disclosure service makes continuing disclosures available to the public, at no charge, on the Internet through the EMMA portal.  The EMMA continuing disclosure service also makes continuing disclosures available by subscription for a fee.

Submissions to the EMMA Continuing Disclosure Service – No change

Public Availability of Continuing Disclosure Documents – No change

Pilot for EMMA Continuing Disclosure Service

In anticipation of the commencement of operations of the EMMA continuing disclosure service on July 1, 2009, the MSRB is implementing a pilot phase of the EMMA continuing disclosure service to provide for the voluntary electronic submission to the MSRB of continuing disclosure documents and related information by issuers, obligated persons and their agents and to provide for the free public access to such documents through the EMMA portal.  Such submissions shall be made as PDF files, accompanied by related indexing information, through the submission processes established with respect to the EMMA continuing disclosure service; provided that such processes may become available for use by voluntary submitters on a phased-in basis.  Documents submitted by issuers, obligated persons and their agents shall be made available to the public on the EMMA portal through the processes established with respect to the EMMA continuing disclosure service; provided that such processes may be implemented on a phased-in basis.  The MSRB also may make available test versions of the computer-to-computer submission processes and data stream subscription services established with respect to the EMMA continuing disclosure service on a phased-in basis during the pilot phase.  The features of the EMMA portal established with respect to the EMMA continuing disclosure service may become available for use by public users of the EMMA website on a phased-in basis during the pilot phase.  There shall be no charge for the making of submissions during the pilot phase or for accessing such documents on the EMMA portal.

The MSRB shall undertake to make the submission and EMMA portal access services available during the pilot phase on the same terms as established for the EMMA continuing disclosure service but reserves the right to operate any feature on a more limited basis as necessary or appropriate, in the sole discretion of the MSRB, during the pilot phase.  The pilot phase is expected to operate for a limited period of time as the MSRB transitions to the permanent EMMA continuing disclosure service anticipated to commence operation on July 1, 2009.  The pilot phase shall terminate automatically at such time as the permanent EMMA continuing disclosure service becomes operational.