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Legal Update

Changes to US Municipal Bond Market Continuing Disclosure Rules Effective July 1

1 July 2009
Mayer Brown Legal Update

July 1, 2009, marks the arrival of a significantly different continuing disclosure regime for the US municipal bond market. Starting then, issuers and obligated persons are required to file continuing disclosure information with the Municipal Securities Rulemaking Board (the MSRB) instead of with the four prior Nationally Recognized Municipal Securities Information Repositories (NRMSIRs) that had been designated to receive the information. Additionally, the MSRB’s online Electronic Municipal Market Access System (EMMA) will provide free public access to continuing disclosure information, analogous to the US Securities and Exchange Commission’s EDGAR database.

The SEC issued two regulatory changes on December 5, 2008, that altered continuing disclosure obligations under Rule 15c2-12 (the Rule), adopted by the SEC under the Securities Exchange Act of 1934 (the 1934 Act). First, Release No. 34-59062 modified the Rule by deleting references to NRMSIRs and adding that submissions must be made to the MSRB, “in an electronic format as prescribed by the [MSRB] . . . accompanied by identifying information as prescribed by the [MSRB].” Second, Release No. 34-59061 approved an MSRB request under Rule 19b-4 of the 1934 Act to establish free, publicly available access to the continuing disclosure documents via its online EMMA system.

The Rule effectively requires issuers of municipal securities and obligated persons to provide annual financial information, notices of certain material events that might affect the financial outlook of their bonds, and notices of failures to provide such information. Under the version of the Rule in effect prior to July 1, 2009, annual filings were required to be sent to all existing NRMSIRs and to state information depositories (SIDs), if any, and material event notices were required to be sent to all existing NRMSIRs or to the MSRB as well as any applicable SIDs. Issuers and obligated persons also had the option of filing with DisclosureUSA, a free online “one-stop” filing service that forwards documents to NRMSIRs and appropriate SIDs. Effective July 1, 2009, under the Rule as modified, all such filings must be submitted solely to the MSRB via EMMA in the manner prescribed by the MSRB.

Existing Continuing Disclosure Agreements

  • There is no need to revise existing continuing disclosure agreements (CDAs) that reference NRMSIRs. At midnight on June 30, 2009, the SEC withdrew the “no action” letters that designated the prior NRMSIRs, substituting the MSRB as the sole NRMSIR. Therefore, current CDAs that reference NRMSIRs will not need to be revised. However, any persons concerned about the state of their current CDAs should contact counsel.

  • All new CDAs for offerings occurring on or after July 1, 2009, should state that submissions will be filed with the MSRB.

  • All new CDAs for offerings occurring on or after July 1, 2009, should state that submissions will be filed with the MSRB.

  • Issuers and obligated persons will still have a legal duty to provide continuing disclosure documents to appropriate SIDs if required by state law; amendments to the Rule will have no effect on the obligation under outstanding CDAs to submit continuing disclosure documents to the appropriate SID.

  • DisclosureUSA will no longer accept filings. The SEC also withdrew the interpretive letter authorizing the DisclosureUSA service. The Municipal Advisory Council of Texas has indicated that it plans to keep the index of filings submitted prior to July 1, 2009, available online for a five-year period.

An Overview of EMMA

  • EMMA is modeled after the SEC’s EDGAR database and will offer free public access to continuing disclosure information.

  • Disclosure documents can be submitted by issuers, obligated persons, or agents.

  • Documents must be submitted in PDF (portable document format), with identifying indexing information. Documents submitted to MSRB on or after January 1, 2010, must be word-searchable (without regard to diagrams, images and other non-textual elements).

  • Before documents can be posted to EMMA, an online registration must be completed by the Issuer or obligated person. (A registration tutorial document is available online.) Designated agents must also be approved via email by the issuer or obligated person for which they are posting.

  • EMMA enables issuers and obligated persons to receive automated notification whenever any continuing disclosure document is submitted about a security they identify by CUSIP number, allowing issuers and obligated persons to keep up to date with filings made by agents.

  • Continuing disclosure documents will be available through EMMA free of charge to the public, and the MSRB will also offer a real-time data stream subscription service for an annual fee of $45,000.

  • A complete user’s guide to EMMA is available online.

Identifying Information

  • Persons submitting information to MSRB via EMMA are required to provide information necessary to accurately identify the following: (i) the category of information being provided; (ii) the period covered by any annual financial information, financial statements or other financial information or operating data; (iii) the issues or specific securities to which such document is related or otherwise material (including CUSIP number, issuer name, state, issue description/securities name, dated date, maturity date and/or coupon rate); (iv) the name of any obligated person other than the issuer; (v) the name and date of the document; and (vi) contact information for the submitter.

  • This indexing information is designed to reflect standard industry categorization and provide user-friendly search functionality.

For more information about these reforms, or any other matter mentioned in this Client Alert, please contact the authors, , at +1 312 701 7323, , at +1 312 701 7303, and , at +1 312 701 8056.

Learn more about our Government Relations practices.


  • Joanna K. Horsnail
    T +1 312 701 8056
  • John A. Janicik
    T +1 312 701 7323
  • David Narefsky
    T +1 312 701 7303

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