WASHINGTON — The Municipal Securities Rulemaking Board has filed with the Securities and Exchange Commission proposed rule changes designed to both streamline underwriters’ submission of new-issue bond information and reduce reporting errors.
The proposed change to Rule G-32 on primary offering disclosure would allow underwriters to fulfill some new-issue reporting requirements by filing information with the Depository Trust & Clearing Corp.’s New Issue Information Dissemination Service, or NIIDS.
The MSRB requested an effective date for the proposed amendments of no later than May 6, 2013, or any earlier date the MSRB announces over its website with advance notice of at least 30 days.
The proposal would eliminate duplicative rules requiring underwriters to file identical information with both NIIDS and the MSRB’s EMMA system.
“The MSRB believes there would be significant benefits in integrating the NIIDS data into the EMMA submission process,” the board said in its filing. “Re-keying information ... is both time consuming and this duplication of effort may increase the possibility of error.”
The MSRB’s Rule G-32 requires underwriters to send a Form G-32 to the EMMA system by the end of the first day that a muni transaction is executed. The form requests information such as the issuers’s name, a description of the issue, the CUSIP number, the principal amount of the bonds and initial offering prices or yields.
In addition, the MSRB’s Rule G-34 requires underwriters to submit much of the same information to NIIDS within two hours of the time an issuer awards bonds to an underwriter.
The MSRB’s proposal would revise rule G-32 to allow underwriters to fulfill the rule’s reporting obligations through submission of data to NIIDS. Underwriters would still be required to submit certain new-issue information, such as underwriting spreads and the existence of continuing disclosure agreements, to EMMA.
Currently, underwriters do not need to submit information about variable-rate and auction-rate securities, commercial paper, Section 529 college savings plans and issues ineligible for a CUSIP number, to NIIDS. The proposal would eliminate the exception for short-term instruments maturing in less than nine months.
Underwriters have been required since September 2008 to submit new-issue information to NIIDS, which was developed to ensure market participants have access to standardized information. NIIDS data is sent instantly to the DTCC, which sends the data to subscribers.
Underwriters have also been required to submit new-issue data to EMMA since 2009.
The MSRB said it has planned for years to integrate EMMA data with NIIDS data, but the integration was slowed because EMMA’s development schedule didn’t mesh with the timeframe for NIIDS.