SAN DIEGO — Efforts to improve transparency were on the menu of discussion Wednesday at the National Federation of Municipal Analysts’ annual conference.
Another big and related topic was changes at the Municipal Securities Rulemaking Board, including its efforts to continue to make its EMMA website more user-friendly.
A next step for MSRB will be to make nearly all the information available to users doing an issuer specific search that is available to users doing a CUSIP number-specific search, said Lynette Kelly, MSRB’s executive director.
“We are trying to improve the functionality so that users will be able to compare deals and pricing,” Kelly said. “We will start with a pilot program on that.”
The MSRB is also currently polling users to find out if it would be helpful to shorten the current trade window to less than 15 minutes.
According to Colin MacNaught, Massachusetts’ assistant treasurer, his state is aiming to be a leader in transparency.
Part of that, involves efforts to put all the bond disclosure and issuance information up on its website.
The state has set a schedule whereby bond disclosure information is updated on the fifth day of the month every other month as opposed to only updating it right before the state plans to issue bonds, MacNaught said.
The aim is to provide investors with certainty as to when new information on the state’s bonds will be available, he said.
“We do live investor calls every other month,” MacNaught said. “We have published both our short and long-term financial goals.”
During those calls, they have been known to have the state’s head of budget and finance and also the governor on the call.
While Florida also wants to increase transparency, the state has not progressed to the level that Massachusetts has with its website, said Ben Watkins, director of Florida’s Division of Bond Finance.
“We are at the horse-and-buggy stage compared to you,” Watkins said.
Instead of putting its disclosure and bond information on the bond division’s website, Florida uploads it to EMMA, he said.
But that is exactly what the MRSB has been striving for, Kelly said: making it possible for issuers who are not as far along the technological path as Massachusetts to provide information to investors electronically.
Meanwhile, the Governmental Accounting Standards Board is working on two new rules governing pension bonds.
“The standards will focus on the relationship between the employer and the employee,” said David Bean, director of Research and Technical Activities for GASB. “They are not intended to be a funding mechanism for governments.”
One change will be that a state’s pension liability will appear on the face of the financial statements, so analysts and investors will not have to hunt through financial documents to find that information, Bean said.
It will also be calculated on a more standardized basis, Bean said.
“Finally, as far as liability itself goes, we are going to draw back the curtain,” he said.
Long-term information will be provided based on a real rate of return by asset class. Issuers also will have to include what happens if the contribution rates from pension funds increase or decrease by one percent.
GASB also plans to require detailed information on how liability has changed during the year, Bean said.
He pointed interested parties to the GASB.org website for more information on the planned changes.
GASB also plans to include OPEB in the changes. New standards will be “on the street” this time next year, Bean said.
