In early December, 2008, two organizations took separate, but choreographed, actions that fundamentally changed municipal bond disclosure requirements:

The Securities and Exchange Commission (the “SEC”) unanimously approved the designation of the Municipal Securities Rulemaking Board (“MSRB”) as the required central repository for ongoing disclosures by municipal issuers. The SEC adopted amendments to Rule 15c2-12 (the “Disclosure Rule”) issued under the Securities Exchange Act of 1934 requiring that the issuer (or obligated person) provide the information covered by disclosure agreements to the MSRB in an electronic format. Previously, disclosure had been made to multiple nationally recognized municipal securities information repositories (“NRMSIRS”) and state information depositories (“SIDS”); and

The MSRB designated the Electronic Municipal Market Access System (“EMMA”) as the online repository where such disclosures would be made. EMMA is a centralized on-line resource that provides free public access to official statements, municipal disclosure documents, advance refunding documents and realtime trade price information on municipal securities. EMMA is meant to be a means of providing such information in a manner that could be understood by investors who are not experts in financial matters. It provides real-time access to prices at which bonds and notes are sold to and by customers, as well as prices paid in inter-dealer transactions, for most trades occurring on or after January 31, 2005.

Both of the above designations are effective simultaneously on July 1, 2009. In a nutshell, it is hoped that EMMA will become the municipal counterpart to the SEC’s EDGAR system where corporate disclosures are made.

WHAT MUST BE SUBMITTED TO EMMA?

The provisions of the Disclosure Rule require underwriters to determine that certain issuers or other “obligated persons” – entities other than the issuer for which financial and operating information is provided in the official statement – have entered into continuing disclosure agreements (each a “CDA”) pursuant to which certain information will be made periodically available to the marketplace. As of July 1, 2009, all such continuing disclosures will need to be filed with EMMA, including annual financial statements, material event notices, notices of failures to provide annual financial information on or before the date specified in the CDA and all other information required to be disclosed under the CDA.

Such disclosures shall be made at such times as are prescribed in the existing CDAs – there are no superseding EMMA requirements regarding the timing of filings that will “trump” the CDAs.

Disclosures required under CDAs existing before July 1, 2009 should be made on a going forward basis to EMMA, and information that had been previously submitted to NRMSIRS and SIDS may, but is not required to, be resubmitted to EMMA. Further, all new CDAs should specifically state that disclosure shall be made by electronic filing with EMMA.

EMMA’S LIMITATIONS

Though EMMA is intended to be a useful and easy resource, investors should keep in mind that certain information will not be found on EMMA.

For example:

• In the following circumstances, an underwriter is not required to submit the official statement to the MSRB as they are considered private offerings not intended for the general public:
• New issuances of $1 million or less;
• Limited offerings where bonds are sold in $100,000 minimum denominations and:
  • offered to a maximum of 35 “sophisticated” investors (i.e. investor viewed by an issuer or underwriter as having sufficient resources, market knowledge and experience to understand and bear the risks involved in a particular investment); or
  • the bonds mature in nine months or less from initial issuance; or
  • the bond owners can require the issuer to purchase back the bonds at face value every nine months or more frequently.
• Trade price information is not available for trades in municipal securities for which a CUSIP number has not been assigned.
• Though EMMA provides free access to documents and trade price information relating to municipal securities reported to the MSRB, EMMA does not provide analyses or summaries of these documents and trade information.
• EMMA provides information only on municipal securities, and not on tax-exempt mutual funds, municipal derivatives, or any other securities or financial products that may offer tax benefits.

Please also bear in mind that the MSRB does not review, approve or verify any of the information contained in the official statements and disclosures submitted to EMMA. The persons charged with submitting the information are responsible for the contents and accuracy of all such information in connection.