MSRB Issues Two Podcasts: "Being a Regulated Municipal Advisor" and "Providing Disclosure Information to Investors"
The MSRB released two podcasts, the first titled "Being a Regulated Municipal Advisor," and the second, "Providing Disclosure Information to Investors." Both podcasts offer an overview of municipal advisor basics, including registration, the structure of MSRB rules and the disclosure of information.
In the first podcast, the MSRB stated that the "key obligation" of a municipal advisor is registration. Any municipal advisor that is engaged in a municipal advisory activity is required to register with the SEC and MSRB by completing Form A-12. Firms that utilize municipal securities dealers, municipal advisors or both are required to pay the MSRB a one-time initial fee and an annual fee.
Firms and registered persons are subject to MSRB rules, which fall into three categories:
- Administrative "A" Rules, which set forth the structure, authority and membership of MSRB assessments and fees.
- Definitional "D" Rules, which provide definitions for terms used in MSRB rules.
- General "G" Rules, which create responsibilities and standards for dealers that affect municipal securities transactions, as well as for municipal advisors that engage in municipal advisory activities.
The MSRB explained that it notifies registered members of new rules and changes to existing rules via e-mail to each firm's primary contact.
In the second podcast, regarding investor disclosure, the MSRB explained that it is important to "build and maintain an investor base"; therefore, it is also important for registered municipal members to provide ongoing disclosures about bonds. Disclosures are submitted through the Electronic Municipal Market Access Website ("EMMA"), which provides free resources for municipal market information.
The MSRB reminded firms that issuers who fail to provide "adequate" financial and other continuing disclosures may be subject to Federal Securities Laws and Contractual Laws, "negative publicity" and higher costs of capital. The MSRB outlined its "four steps to making continuing disclosures":
- identify the required disclosures;
- establish disclosure practices;
- schedule e-mail reminders for recurrent financial disclosures; and
- make disclosures publicly available on EMMA.
See: Transcript of Podcast "Being a Regulated Municipal Advisor"; Transcript of Podcast "Providing Disclosure Information to Investors"; Listen to Both Podcasts.