How the system would work:
* An issuer submits its preliminary official statement and official notice of sale to Parity in addition to distributing hard copies to dealers.
* Parity enters the information into its upcoming-issues database, which can be viewed by dealers who subscribe.
* On the day of the sale, dealers with modems submit their bids through their PCs. Fax or phone bids are also accepted. Bids can be for entire bond issues, for single maturities, or for combinations of maturities.
* Software on the issuer's computer calculates all bids received. After viewing the results, the issuer awards the bonds to bidders based on the combination that gives the issuer the lowest overall true interest cost.
* MuniBid provides "guaranteed bids" from backup underwriters if the issuer does not receive bids for certain portions of its issue.
* MuniBid coordinates the logistics of the bidding details with the bidders for each transaction.
* Bond issues using Parity and MuniBid are shown on Twenty-First Century Municipals' World Wide Web site, with instructions for retail investors on how to order bonds from specific dealers.
* Issuers reach more retail investors through smaller, regional broker- dealers.
* Regional broker-dealers gain access to a larger volume of bonds if they outbid the syndicates on single maturities or combinations of maturities.
Source: Twenty-First Century Municipals Inc. and MuniBid Inc.
