MSRB 'submission calculator' to go into effect July 1

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A tool to more visibly track the timeliness of secondary market disclosures will go into effect in just a few days.

The Municipal Securities Rulemaking Board announced late Wednesday that its “submission calculator” will be fully operational starting July 1. The MSRB proposed an amendment late last year to create the calculator, making changes to EMMA Information Facility IF-3, which outlines the basic functions of the EMMA site.

“The amendments to the EMMA IF and corresponding enhancements to the EMMA system are designed to promote greater transparency in the municipal securities market, including by making financial information more readily apparent to investors, market professionals, and the general public through the EMMA Portal,” the MSRB wrote in a press release.

The calculator will show the number of days between the posting of an annual financial disclosure and the end date of the financial period. The calculator will be triggered once the submission is made to EMMA. It will not require extra work from issuers, according to the MSRB.

MSRB's Chief Compliance Officer Gail Marshall had written in a February comment letter that the "submission calculator" would help efforts to improve transparency in the market.

The new feature will provide an informational box including a link to the disclosure of annual information and/or an audited financial statement for the most recent fiscal period and the end date of the financial period detailed in the disclosure. It will also include the date the disclosure was posted to EMMA and a static calculation of the number of days between the posting of the first disclosure for that fiscal period and the end date of the financial period detailed in that disclosure.

Municipal market participants had pushed back against the calculator, saying it could lead to submission errors and investor confusion. Groups were also upset that the MSRB did not reach out for input before proposing the calculator to the SEC.

The SEC received comment letters late last year asking for the calculator to be withdrawn. The National Association of Health and Education Facilities Finance Authorities said errors would be inevitable.

The National Federation of Municipal Analysts said submission errors are already frequent in the EMMA system, posing a high risk that a meaningful number of calculations will be based on inaccurate information. NFMA had suggested greater oversight of the submission process to be sure documents were classified and labeled correctly.

The Government Finance Officers Association was concerned that some issuers would be unfairly judged by investors that information may not be timely when it is submitted as quickly as possible and within the timeframe noted in its continuing disclosure agreements.

The Securities and Exchange Commission approved the calculator in February, saying it would protect investors while preventing fraud and manipulative acts and practices.

Following comment letters, the MSRB said it did not think the SEC should reject its calculator because it would efforts to improve transparency in the market.

The MSRB facilitated a user testing period and gathered feedback from users. The MSRB said it will continue to seek input from municipal market participants.

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