WASHINGTON — The Municipal Securities Rulemaking Board should not charge fees to download disclosure documents in bulk, a think tank analyst said.
Reason Foundation Senior Policy Analyst Marc Joffe made his case in an interview with The Bond Buyer following comments critical of the MSRB uttered by Louisiana Senator John Kennedy. Kennedy, a Republican who previously was his state's treasurer, questioned Securities and Exchange Commission Chairman Jay Clayton about the MSRB at a Dec. 11 hearing.
Kennedy asked Clayton if he was aware that the board “charges $60,000” to download data. Clayton responded, saying he was not aware of that, and it was unclear to what Kennedy was referring. In response to a request for a clarification on the remarks, Kennedy's office provided only a video of the hearing.
Joffe said the $60,000 Kennedy was referring to was for bulk downloads of primary market disclosure documents, which costs $20,000 per year and continuing disclosure documents which are $45,000 a year.
“So yes, I agree with him (Kennedy) that it’s actually $65,000 for both,” said Joffe.
Reason Foundation is a think tank dedicated to "developing, applying, and promoting libertarian principles." Joffe's work focuses on public finance, and he has authored recent papers on transitioning muni disclosure documents into machine-readable format and on pension obligation bonds.
A $20,000 primary market disclosure subscription includes documents such as official statements and certain preliminary official statements. It includes an interface to get real-time, computer-to-computer dissemination of official statements, such as a notice of sale, according to the
A $45,000 subscription has continuing disclosure documents such as audited financial statements, and also includes the interface.
Joffe argued analysts shouldn’t have to pay for bulk downloading of documents such as comprehensive annual financial reports.
"What if instead of looking at one CAFR, an analyst would like to view 100 or 1,000 CAFRs to perform some comparative analysis?" he wrote in an email.
The analyst would have to spend a lot of time navigating around EMMA to find the documents or pay a fee, Joffe said. The analyst would also have to pay for a CUSIP license.
He suggested installing a crawler — a computer program that can automatically visit a website and download information.
“Someone like me that really wants to have a lot of municipal data analyzed would be inclined to do that, but the terms of use for EMMA says that you can’t,” he said.
He noted that the SEC’s EDGAR site doesn’t have terms of use and he can download any information he wants.
In a Nov. 5 letter sent to the SEC, Joffe wrote that he is less concerned about “the content of municipal disclosure than with how it is delivered to the investing public.”
MSRB President and CEO Lynnette Kelly said information on EMMA is free to investors.
“We make all of our current transaction and disclosure information freely available on EMMA,” Kelly said. “We have statutory authority granted by Congress to provide for commercially reasonable fees for these automated subscriptions based feeds.”
With bulk downloading, analysts and other organizations pay subscription prices, she said.
“We also make some of that information available for academics and nonprofits, too typically at no charge,” Kelly said. “We have a very comprehensive program, but the information is free on EMMA — all of it.”
