The Securities and Exchange Commission has published for comment proposed amendments to improve the quality and timeliness of municipal securities disclosure under Rule 15c2-12 of the Securities Exchange Act of 1934, as amended (Exchange Act).  

For a broker, dealer or municipal securities dealer acting as an underwriter in a primary offering of municipal securities, the amendments would modify certain requirements regarding the information such persons must reasonably determine that an issuer of municipal securities or an obligated person has undertaken to provide to the Municipal Securities Rulemaking Board (MSRB). The amendments would: (i) require a broker, dealer or municipal securities dealer to reasonably determine that the issuer of municipal securities or an obligated person has agreed to provide notice of specified events in a timely manner no more than 10 business days after the event’s occurrence; (ii) amend the list of events for which a notice is to be provided, specifically with respect to an event adversely affecting a municipal bond’s tax exemption; and (iii) modify the events that are subject to a materiality determination before triggering a notice to the MSRB as well as add additional events to be disclosed under a continuing disclosure agreement. The amendments also would extend Exchange Act Rule 15c2-12 to cover securities commonly known as variable rate demand obligations, which are currently exempt from Exchange Act Rule 15c2-12. In addition, the SEC provided interpretive guidance intended to assist municipal securities issuers, brokers, dealers and municipal securities dealers in meeting their obligations under the antifraud provisions of the federal securities laws. Comments are due to the SEC on or before September 8.  

Click here to read the SEC Proposing Release