The Municipal Securities Rulemaking Board (“MSRB”) has been quite active lately. On April 3, 2012, the MSRB issued a notice encouraging voluntary disclosure of bank loans by state and local governments on the MSRB’s Electronic Municipal Market Access (“EMMA”) website. EMMA is an information facility of the MSRB for receiving electronic submissions of official statements, initial offering prices and other information about new issues as well as on-going municipal securities disclosures. The MSRB noted that the increased use of bank loans to meet funding needs by state and local governments concerns regulators and market participants because information about such bank loans (and the impact of those loans on a government’s outstanding debt) may not be disclosed until audited financial statements are released. The MSRB stated that the availability of timely information about bank loan financings is important for market transparency and the promotion of a fair and efficient market. Voluntary submission of relevant information through EMMA would provide bondholders, investors and other market participants with timely access to key information useful in assessing current holdings and in making investment decisions.
On April 10, 2012, the MSRB requested comments on draft amendments to MSRB Rules G-32 and G-34 that would allow underwriters to satisfy certain reporting requirements by submitting information to the New Issue Information Dissemination Service (“NIIDS”) operated by the Depository Trust and Clearing Corporation. NIIDS is a centralized system for collecting standardized electronic information on new issue securities from underwriters and disseminating it to market participants. When EMMA was first conceived, the MSRB planned to integrate NIIDS data submitted pursuant to Rule G-34 into EMMA such that it would also satisfy the data submission requirements under Rule G-32. Although the information submitted pursuant to Rule G-32 is less extensive than that under Rule G-34, the MSRB recognized that integration would prove beneficial because duplicative data entry is time consuming and increases the possibility of error. Streamlining the submission burden will result in improved data quality on EMMA and throughout the marketplace and will allow underwriters and enforcement agencies to concentrate compliance activities on this single information pipeline. Comments are due by May 8, 2012.
These recent notices demonstrate the MSRB’s continued efforts to increase transparency and improve the quality and quantity of information in the marketplace.