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“We fully support the MSRB’s initiatives to improve market efficiency and facilitate comprehensive disclosure of both primary and secondary documents in the municipal securities markets through the development of an electronic system,” said Leslie Norwood, managing director and associate general counsel at SIFMA. “It will be extremely beneficial to investors and other market participants to have this information freely available in a single location.”
Secondary market disclosures include annual financial information, notices of specific material events and other filings required under MSRB regulations. SIFMA has previously expressed its support of MSRB efforts to develop a portal for electronic disclosure of official statements for new issue municipal securities and advance refunding documents. The permanent system will be known as the MSRB’s Electronic Municipal Market Access system, or EMMA, and the MSRB has indicated it expects EMMA to become operational in March, 2008.
SIFMA believes the proposal requiring issuers to designate to EMMA that a third party has the authority to file submissions on their behalf could delay disclosure. Instead, SIFMA believes the current practice, which requires the person submitting information to represent that he or she is authorized to do so, should be continued.
SIFMA also notes in its comment letter that the MSRB’s proposal to require underwriters to identify obligated persons in secondary filings may have little value, as the official statement, which states who will be filing continuing disclosure and where it will be filed, will also be available on EMMA. An obligated person is anyone who is committed by contract or other arrangement to support payment of all or part of the obligations on the municipal securities sold in a primary offering, but continuing disclosure may not be required of all obligated persons.
Additionally, SIFMA believes a proposed requirement to state the date by which annual financial information is expected to be disseminated may be too vague to be useful. Most continuing disclosure agreements indicate data will be available 90 days after the end of an issuer’s fiscal year, which is less indicative than the pattern likely to develop over time which will indicate to investors when the information is likely to be filed.
