SAN FRANCISCO - Municipal issuers who submit secondary market disclosure documents to NRMSIRs but discover errors in the filing systems that result in false filings could find a simple solution to end the problem.
"It is easy to get a false filing," said Chip Eady, an attorney at Foley & Lardner, "Perhaps we should look at implementing identification or pin numbers."
Assigning pin numbers that identify both the issuer and the specific sale could reduce the risk of filing errors at the nationally recognized municipal securities information repositories and improve service for material event and ongoing disclosure, in order to comply with Rule 15-c-212, he said.
Eady presented the idea during a discussion of four options to improve disclosure, such as a centralized system or indexed system and electronic dissemination of information, on Thursday during The Bond Buyer 12th Annual California Public Finance Conference.
Identifying the exact issuer for which a disclosure is made is a significant point for Los Angeles, where there are more than 22 issuers with "Los Angeles" in the name, according to Joya De Foor, the city's treasurer.
Panel members agreed that the current system of filing with the NRMSIRs needs repair. A survey earlier this year by the National Federation of Municipal Analysts found nearly 41% of information filed was inadequate.
Peter Bianchini, vice president of Charles Schwab Investment Management, is the chairman of the NFMA and facilitated the panel's discussion. According to Bianchini, the system as a whole is "disconnected," requiring a better match for both sides' needs.
T. J. Reilly, vice president of Digital Assurance Certification, said that 85% of all information is not filed or current, or is otherwise problematic. Even when compliance documents are filed on time, they often are incomplete, void of Cusip numbers, or without a cover sheet.
Reilly offered electronic dissemination as a solution.
Electronic filing eliminates the middleman by posting directly to the NRMSIR, he said. In addition, it reduces paperwork and "it is timely information to people who want it," Reilly said.
As treasurer, De Foor is concerned with the bottom line and cost. "Whose disclosure is it anyway?" she asked, adding that she lacked "additional staff to throw into this technology."
Eady reminded everyone that the second "R" in NRMSIR stood for repositories. The system was designed to be a repository and not to serve as a library or chat room, he said.
