Broker-dealers who are primary distributors of 529 college savings plans would have to disclose information about their total assets, the assets of underlying portfolios, contributions, and withdrawals on a quarterly basis, under a proposal the Municipal Securities Rulemaking Board released Tuesday.

The MSRB outlined its proposal and asked for market participants to comment by Aug. 31 on several issues, including whether such information would be useful to investors and whether it could be disclosed on a quarterly basis. The board said it plans to release additional guidance regarding the distribution and sale of interests in 529 plans later this year.

The MSRB’s proposal revolves around tax-advantaged investment plans that states have set up under Section 529 of the Internal Revenue Code to help parents or other adults save for the future college expenses of their children or other beneficiaries. Currently 102 of these plans exist — 90 college savings plans and 12 pre-paid tuition plans, according to the College Savings Plans Network, a group of state officials affiliated with the National Association of State Treasurers.

The plans involve municipal fund securities, and the MSRB governs the activities of brokers and dealers who are primarily distributors, or wholesale sellers, of the plans. It has been issuing regulatory guidance for broker-dealers involved with the plans for many years. It already requires them to provide 529 plan disclosure documents, which are posted on its Electronic Municipal Market Access system.

But in its notice, the board stated: “It is important to collect additional information about 529 plans to improve meaningful free public access to such information and to assist the MSRB in better understanding 529 college savings plans in order to inform our activities.”

“By gathering market information, the MSRB will have a better understanding of the size and growth of the 529 plan market, which will help inform its rulemaking,” said executive director Lynnette Hotchkiss. The board said public information should reflect the plans’ current activities and should be easily searchable.

The MSRB’s action comes as CSPN posts general and state-specific information about the state plans on its website, collegesavings.org. The site permits investors to compare plans by features or by state and posts semiannual CSPN reports containing aggregate data about 529 plans. It’s latest report, dated April 2011, contains data as of Dec. 31, 2010.

In its notice, the MSRB said that when it issued guidance about customer-protection obligations for broker-dealers involved with the plans in March 2006, it acknowledged the existence of the College Savings Plans Network and its website.

“At that time, the MSRB urged market participants to develop a more comprehensive and user-friendly system of established industry sources for the 529 plan market,” the board said.

Asked about the proposal the board released Tuesday, Joan Marshall, chair of the network and executive director of the College Savings Plans of Maryland, said, “We will certainly review the proposal and we will provide comments.”

Marshall said CSPN “currently gathers comprehensive data from all 529 plans,” but only on a semiannual basis. She said the group had been issuing quarterly reports before 2010 but with much less data.

“We do have a constructive relationship with the MSRB and we look forward to working with them,” she said.

The Securities Industry and Financial Markets Association and Bond Dealers of America did not respond to a request for comments.

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