Friday, July 24, 2009


During recent years, more and more individual investors have entered into the municipal securities market. Particularly troublesome has been the noticeable discrepancy between the information disclosed to investors in municipal securities and the information available to corporate securities investors. Accordingly, on July 17, 2009, the SEC issued a proposal to amend the current municipal securities disclosure requirements provided under Rule 15c12-12 of the Securities Exchange Act of 1934.

The proposed amendments would serve five main functions, including:

(1) Requiring a broker, dealer or municipal securities dealer to reasonably determine that the issuer or obligated person has agreed to provide notice of specified events in a timely manner;

(2) Amending the list of events for which a notice is to be provided;

(3) Modifying the events that are subject to a materiality determination before triggering a notice to the MSRB;

(4) Revising an exemption from the rule for certain offerings of municipal securities with put features; and

(5) Providing interpretive guidance intended to assist municipal securities issuers, brokers, dealers and municipal securities dealers in meeting their obligations under the antifraud provisions.

Chairman Mary L. Schapiro summarized the likely impact the proposed amendments would have by explaining that they would “help investors make more knowledgeable investment decisions about municipal securities, while at the same time enabling broker-dealers to satisfy their obligations.”

Public comments on the SEC’s most recent proposal are due September 8, 2009.

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