SEC Amends Disclosure Requirements for Municipal Securities

The Securities and Exchange Commission today adopted amendments regarding disclosure requirements for direct loans and purchases in the secondary municipal securities market. Following publication in the Federal Register, banks will have 180 days to comply with the changes.

Under rule 15c2-12 of the Securities Exchange Act, brokers, dealers and municipal securities dealers acting as underwriters in primary offerings of municipal securities must reasonably determine that the issuer or obligated person has agreed to provide to the Municipal Securities Rulemaking Board timely notice of certain events. Today’s amendments add two new event disclosures that obligated persons must file on the Electronic Municipal Market Access system within 10 days of the event’s occurrence.

ABA remains concerned that the amendments are overly broad and will result in an increased regulatory burden, as it will result in vast new amounts of filings that could burden the EMMA reporting system and dilute the ability of investors to find useful information. ABA also noted in previous comments that amendments’ definition of “financial obligation” was too broad, and that they included no mechanism for redacting confidential information. Read the final rule.