San Diego shifts disclosure to EMMA's national site

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WASHINGTON — The city of San Diego, Calif., having established the gold standard for bond Investor Information on its website years ago, plans to shift to a customized issuer page on the Municipal Securities Rulemaking Board EMMA website for maximum national exposure.

Lakshmi Kommi, the city’s director of debt management, and Rolando Charvel, the city’s chief financial officer, recently announced the shift in on the city’s website.

“Due to the prominence of, and widespread reliance by the investor community on, the [MSRB’s EMMA website], and the diminished need for a separate city investor information site containing the same or similar information, effective Dec. 8 2017, the City of San Diego will move to the exclusive use of EMMA’s issuer page platform for its financial disclosures, and will no longer have a separate city Investor Information site,” they said.

San Diego “has been, and will continue to be, proactive on implementing new issuer tools as they become available on EMMA,” they said.

Kommi, an MSRB board member, said in a brief interview on Thursday, that city officials talked to credit rating analysts and other muni market participants and discovered that they primarily rely on EMMA for issuers’ disclosures and then go to the issuers to fill in any gaps or respond to questions.

Also, EMMA has information on trading and pricing that issuers don’t have and developing customized web pages puts all of an issuer’s bond-related information in one place, at the national level, she said.

“It’s the city accessing a national platform,” Kommi said, pointing out that San Diego’s Investor Information section of its website is about 10 years old. MSRB launched EMMA a year after the city’s disclosure site was started up and the board has continued to add data and products, from trading and pricing data to ratings and, more recently, a new market calendar.

“I’m very excited about it,” Kommi said, adding she strongly believes that by fully moving to the MSRB, the city will be reaching the broadest possible range of market participants.

San Diego began operating the state-of-the-art Investor Information section of its website in 2008 after the SEC sanctioned it for disclosure failures and ordered it to hire a consult to foster compliance with its disclosure obligations.

The SEC ordered San Diego in November 2006 to cease and desist from securities fraud violations after it found the city had failed to disclose important information or made misleading statements to investors about expected dramatic increases in its unfunded pension and retiree health care liabilities. The SEC said the failed disclosures occurred in the offering documents for five muni offerings in 2002 and 2003, in continuing disclosure statements and in the information the city provided to the rating agencies.

Part of the SEC’s settlement with the city required it to retain a consultant for three years to foster its compliance with its disclosure obligations under the federal securities laws. The city hired Palmer and Dodge as its consultant. Hawkins Delafield and Wood has been the city's disclosure counsel since 2004.

The Investor Information section of the city’s website received MuniNetGuide’s award for Excellence in Municipal Investor Relations in March 2011. MuniNet is a Hinsdale, Ill.-based company co-owned by Rich Ciccarone, president and CEO of Merritt Research Services, devoted to research on bond disclosure and other state and local issues.

Ciccarone said on Thursday that he thinks San Diego paved the way for other state and local governments to put bond-related disclosures on their websites.

The MSRB officially launched EMMA in 2009 and began a pilot program in February 2014 allowing issuers to customize home pages on EMMA to communicate with bondholders. The program has since become permanent. An MSRB spokeswoman was unable to provide information on how many issuers have developed such home pages on EMMA.

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