Issuers of municipal bonds must begin filing their disclosures in July to a single, centralized repository that investors can access for free, according to a long-awaited SEC ruling aimed at improving municipal disclosure standards in the $2.66 trillion municipal bond market.
The SEC has designated the Municipal Securities Rulemaking Board’s EMMA system as the sole nationally recognized municipal securities repository (NRMSIR) in an action SEC Chairman Christopher Cox calls “a giant step toward bringing municipal disclosure up to the level of corporate disclosure.”
EMMA (Electronic Municipal Market Access) is open to the public which, for the first time, will have free, online access to all bond-related secondary market disclosure documents in one official location. Various private parties had been designated as NRMSIRs, but the decentralized approach resulted in inconsistent reporting and obstacles to access.
States and governments do not have to release the same type of financial information required of corporations, and the new rule does not change the type of information required. Additional calls for reform call for more complete disclosure. EDGAR Online, which has long supported efforts to bring greater transparency to buyers of municipal bonds, recommends the SEC embrace the XBRL format for reporting on municipal bonds—as it has recently mandated public companies to submit their reports to the SEC in this computer-readable format.
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