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SEC Provides More Transparency on Municipal Securities

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The Securities and Exchange Commission has now made it easier for investors in municipal securities to get free and convenient information about municipal bonds via the Internet.

The way it stands now, municipal securities investors who want ongoing disclosure information about a municipal bond–such as annual financial data or a material event like a downgrade or default–first must locate it on their own at one of the four Nationally Recognized Municipal Securities Information Repositories (NRMSIRs), according to the SEC. This process, however, causes investors to face significant fees to get the information they want and they may also experience considerable delays while waiting for the documents to be delivered to them by mail or fax, the SEC says.

Rule amendments approved by the SEC designate the MSRB as the central repository for ongoing disclosures by municipal issuers. Under a separate MSRB rule change, its Electronic Municipal Market Access (EMMA) system would make these disclosures available to investors in the same manner that the SEC’s EDGAR system does for corporate disclosures.

The SEC says that EMMA will operate as a consolidated, online portal where investors can instantly access, for free, all of the key information produced by municipal bond issuers about their bonds. Offering documents, real-time trade prices, and education resources already are available on EMMA at In order to provide adequate transition time, the SEC’s rule amendments and the MSRB’s rule change will be effective on July 1, 2009.

“With liquidity problems of municipal auction rate securities and rating downgrades of municipal bond insurers contributing to the current credit crisis, the disclosure and transparency of the municipal markets have never been more critical,” said SEC Chairman Christopher Cox, in a statement announcing the initiative. “Municipal securities investors need to know what they own. Now they will no longer have to go to such extensive and expensive lengths to find out.”