Dealers will have to submit bidding information and program documents for auction-rate securities and variable-rate demand obligations in nine months under an expansion of the Municipal Securities Rulemaking Board’s transparency system for short-term debt, approved by the Securities and Exchange Commission late last week.

The additional transparency comes nearly three years after unprecedented tumult began for short-term muni debt, ultimately causing the ARS market to collapse, followed by temporary spikes in interest rates for VRDOs. In response, banks sharply reduced their supply of liquidity facilities that back VRDOs while simultaneously raising prices for them and demanding more favorable terms from issuers.

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