The Municipal Securities Rulemaking Board is seeking comment on draft amendments to its rule governing primary offering disclosure, including both technical changes as well as changes to timing requirements, that the board said are intended to alleviate burdens on underwriters.
"At first read, this is a positive proposal," said Michael Decker, senior vice president for research and public policy at the Bond Dealers of America. "It appears that the proposal would provide more flexibility to underwriters related to G-32 data submissions and would streamline the data submission process. BDA will review the proposal in detail and we will submit a comment letter with our full views."
Leslie Norwood, a managing director and head of municipal securities at the Securities Industry and Financial Markets Association, said the group preliminarily supports the concept of the proposal.
"SIFMA appreciates the MSRB's efforts to alleviate unnecessary compliance burdens on underwriters by allowing underwriters more time and flexibility to fulfill the data submission requirement," Norwood said. "SIFMA agrees that allowing underwriters additional time to submit certain data may improve the accuracy of the numerous data fields submitted on Form G-32. SIFMA looks forward to reviewing the proposed amendments with its members and appreciates the opportunity to comment. Generally speaking, we support efforts to simplify rule text, streamline rules and make deadlines uniform, when possible."
G-32 requires underwriters to submit certain data points about new-issue securities to the MSRB, though the exact requirements differ based on whether the offering is eligible for submission to the New Issue Information Dissemination Service or not. Underwriters must determine eligibility, which takes into account whether the debt has a very short maturity or is a bank direct purchase, among other factors.
The draft amendments would create uniform deadlines for the submission of data on Form G-32. An underwriter would be required to initiate certain data elements on Form G-32 prior to the end of the date of first execution and complete any applicable data elements by the end of the date of closing, regardless of the type of offering.
An underwriter would fulfill the obligation to initiate Form G-32 by creating the form in EMMA Dataport and populating it with the applicable information, but would not be required to submit the complete Form G-32 until the end of the closing date.
The draft amendments would not alter the data collected on the form, only the timing for submission of that data.
The MSRB is seeking feedback on the proposal, particularly with respect to whether it achieves the aims of streamlining and clarifying the requirements, as well as what benefits and burdens the proposal might offer firms underwriting new-issue munis.
The MSRB does not currently have any specific mandated rulemaking agenda, but has said it is constantly in the process of reviewing its existing rules for potential changes. A
The MSRB is requesting that comments be submitted no later than Jan. 17, 2023.
