Municipal bonds, issued by state and local governments to build the infrastructure of our nation, historically have been among the safest investments available to the public. Yet public disclosures about such bonds have long been viewed by investors and others as murky and difficult, if not impossible, to find.

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Until now, the disclosure system for municipal bonds was severely fragmented, with key segments operated by a small number of private enterprises that charged investors for the information.

In addition, access to the information was cumbersome, with only one vendor making disclosure documents accessible to the public on the Internet.

The result was a system that failed to promote public access to disclosure documents and also failed to shine light on disclosure practices of issuers, good or bad.

Today the municipal securities market is undergoing a transformation in disclosure practices.

The Municipal Securities Rulemaking Board, which regulates the securities firms and banks that sell muni bonds, is raising the curtain on disclosure to provide permanent sunshine for this crucial marketplace.

The MSRB has created a centralized Web site that provides free, comprehensive information about municipal bonds.

The Electronic Municipal Market Access, or EMMA, site provides investors with a coordinated view of the available information for each municipal bond, including disclosure - at original issuance and ongoing for the life of the bonds - as well as real-time and historical trade-price and interest rate information.

For the first time, the average individual investor will have access to the same disclosure and pricing information that securities professionals use, presented along with market statistics and educational materials to assist individual investors in understanding the materials available on EMMA. The new system removes existing impediments to investors buying and selling securities based on the most up-to-date disclosures.

As in other securities markets, there clearly is room for improvement in the quality and timeliness of disclosures in the municipal bond market, as well as in the diligence used by securities professionals in recommending bonds to their customers.

But even the best disclosures essentially are meaningless if they are not reasonably accessible.

A red flag raised by a specific disclosure can be rendered ineffectual if no one sees it waving. It is often the obscurity of the currently fragmented municipal disclosure system that creates the conditions for uninformed investment decisions and advice. It is this obscurity that the MSRB, through EMMA, hopes to eliminate.

The value of the site goes beyond ensuring that disclosures are available and used for specific muni bond transactions. EMMA is the stage on which, for the first time, all disclosures in the municipal market are presented to the public side by side, revealing both good and bad disclosure practices by providing a transparent system for all to see.

Unlike the previous obscure disclosure system, EMMA facilitates the public's assessment of when municipal disclosures are less than satisfactory. Investors who are dissatisfied with an issuer's disclosure standards will invest elsewhere and the issuer eventually will pay the price through higher borrowing costs.

In EMMA, the MSRB has created a new paradigm for making comprehensive securities market information available to the general public that exceeds anything currently available to individual investors in other fixed-income markets.

The MSRB, together with the Securities and Exchange Commission and the state and local government issuer community, have worked in a coordinated manner to bring these improvements to the marketplace. Full disclosure is essential to the integrity of the municipal market. Investors in this $2.7 trillion public-purpose market deserve no less.


Lynnette Kelly Hotchkiss is executive director the Municipal Securities Rulemaking Board. EMMA can be found at .