On February 21, 2014, the SEC granted accelerated approval to an amendment to a new Rule G-45 and new Form G-45, originally proposed on June 10, 2013, from the Municipal Securities Rulemaking Board (“MSRB”). Rule G-45 generally requires that each underwriter of a primary offering of municipal fund securities report to the MSRB certain information related to the offering within 60 days of the semi-annual reporting periods ending on June 30 and December 31 each year. Additionally, performance data must be submitted annually within 60 days of December 31. The new rule will impose an extensive data collection and reporting regime on underwriters of 529 municipal fund securities. Such underwriters will be required to report plan descriptive information, asset allocation information, contributions, withdrawals, fee and cost structure, performance data, and certain other information.
The MSRB has stated that it expects that the primary distributor of a 529 plan’s securities will be the underwriter that submits information to the MSRB, but there may be other underwriters that would be obligated to submit information. The MSRB noted that a complete data set for each 529 plan is required by the MSRB, whether submitted by one or more underwriters, but if all the required information is submitted by the primary distributor, the submission obligation may be satisfied on behalf of all underwriters. Performance, fee, and expense information is to be submitted in a format consistent with the Disclosure Principles Statement No. 5 from the College Savings Plan Network, which is generally considered the industry standard for reporting such information for 529 plans. In response to industry confidentiality concerns regarding the proprietary nature of the reported information, the MSRB stated that the information submitted under Rule G-45 is not intended for public distribution, and any proposal to release the reported information would be done through a separate rulemaking proceeding.
The effective date for the rule change is February 24, 2015. The first submission of Form G-45 is due by August 30, 2015. The full text of Rule G-45 and information related to Form G-45 can be found here. The MSRB has also recently requested comment on draft Rule G-18 (establishing best execution obligations for transactions in municipal securities), draft amendments to Rule G-3 (establishing professional qualification requirements for municipal advisers and their associated persons), and Rule G-44 (establishing supervisory and compliance obligations of municipal advisers when engaging in municipal advisory activities).