WASHINGTON — The Municipal Securities Rulemaking Board is giving the market advance notice that, as of Feb. 14, it will begin requiring dealers acting as underwriters, placement agents, or remarketing agents to provide its EMMA website with certain information about the continuing disclosure agreements for new bond issues.
The board said in a notice Thursday that the information, required under its Rule G-32 on primary market disclosure, will include: an indication of whether the issuer or conduit borrower has agreed to provide continuing disclosures; the identity of any borrowers other than the issuer; and when the issuer or borrower are to file such disclosures.
“These items are intended to provide investors and others with information on the expected availability of disclosures following the initial issuance of the securities,” the MSRB said in the notice. “In particular, users of the EMMA web portal will be able to determine which obligated persons are expected to submit annual financial information, audited financial statements and material event notices on an ongoing basis, as well as the date each year by which they should expect to have access to the annual financial information.”
The board is rolling out the new requirements a few months ahead of the implementation of other amendments to the board’s EMMA service designed to encourage issuers to improve their continuing disclosures.
At the request of the SEC, the board will specially designate on EMMA issuers that voluntarily agree to any of four undertakings, including filing their annual, audited financial information within 120 days, or, on a temporary basis, 150 days after the close of their fiscal years. However, the 150-day “transitional” filing period for special designation would phase out after Dec. 31, 2013.
The MSRB also plans to specially designate issuers that meet generally accepted accounting principles set by the Governmental Accounting Standards Board or, in the case of nonprofit borrowers, the Financial Accounting Standards Board.
Finally, the board plans to provide special designations for issuers that submit a Web link to their investor relations or other financial and operating information.
The board plans to begin these special designations by the end of May.
Speaking at the SEC’s municipal bond field hearing last week, MSRB executive director Lynnette Hotchkiss said the board is still working to determine how it will specially designate issuers that comply with these voluntary undertakings.
The special designations must not be seen as an indication of credit quality, according to Hotchkiss. “It’s perfectly logical that someone might get in their financials in a very short amount of time but it is a dog credit,” she said. “You want to make sure that the retail investor looking at EMMA or using EMMA doesn’t draw conclusions that shouldn’t be drawn.”
