On July 31, 2014, the Securities and Exchange Commission (the "SEC") announced that it has extended the deadline from September 10, 2014, to December 1, 2014, for issuers and obligors to self-report potential violations under its Municipalities Continuing Disclosure Cooperation ("MCDC") Initiative. The September 10, 2014 deadline for underwriters remains unchanged. The SEC furthered amended its MCDC Initiative by implementing a tiered approach to civil penalties for underwriters based on the size of the firm. For large underwriting firms with 2013 reported total annual revenue of more than $100 million, the civil penalty will be capped at $500,000.  For mid-sized underwriting firms with 2013 reported total annual revenue between $20 million and $100 million, the civil penalty will be capped at $250,000.  Finally, for smaller underwriting firms with 2013 reported total annual revenue of less than $20 million, the civil penalty will be capped at $100,000.

Further, the SEC's Division of Enforcement (the "Division") acknowledged that since announcing the initiative on March 10, 2014, it has learned that some municipal underwriters and issuers have experienced difficulties in identifying potential violations for periods prior to the implementation of the Municipal Securities Rulemaking Board's Electronic Municipal Market Access system on June 1, 2009.  Accordingly, if violations are identified by the Division after the expiration of the MCDC Initiative, the Division has stated that "it will consider reasonable, good faith, and documented efforts in deciding whether to recommend enforcement action and, to the extent enforcement action is recommended, in determining relief."

A summary of the unmodified MCDC Initiative can be found here.