Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 46161 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3EMMA was originally established, and began 

operation on March 31, 2008, as a complementary 

pilot facility of the MSRB’s existing Official 

Statement and Advance Refunding Document (OS/ 

ARD) system of the Municipal Securities 

Information Library (MSIL) system. See Securities 

Exchange Act Release No. 57577 (March 28, 2008), 

73 FR 18022 (April 2, 2008) (File No. SR–MSRB– 

2007–06) (approving operation of the EMMA pilot 

to provide free public access to the MSIL system 

collection of official statements and advance 

refunding documents and to the MSRB’s Real-Time 

Transaction Reporting System historical and realtime transaction price data) (the ‘‘Pilot Filing’’). 

4The pilot EMMA portal currently is accessible 

at http://emma.msrb.org. 

5Rule 15c2–12(f)(10) defines ‘‘obligated person’’ 

as any person, including an issuer of municipal 

securities, who is either generally or through an 

enterprise, fund, or account of such person 

committed by contract or other arrangement to 

support payment of all or part of the obligations on 

the municipal securities sold in a primary offering 

(other than providers of bond insurance, letters of 

credit, or other liquidity facilities). 

6See also Rule 15c2–12(d)(2). 

7Rule 15c2–12(f)(9) defines ‘‘annual financial 

information’’ as financial information or operating 

data, provided at least annually, of the type 

included in the final official statement with respect 

to an obligated person, or in the case where no 

financial information or operating data was 

provided in the final official statement with respect 

to such obligated person, of the type included in 

the final official statement with respect to those 

obligated persons that meet the objective criteria 

applied to select the persons for which financial 

information or operating data will be provided on 

an annual basis. 

8Under Rule 15c2–12(b)(5)(C), such events 

currently consist of principal and interest payment 

delinquencies; non-payment related defaults; 

unscheduled draws on debt service reserves 

reflecting financial difficulties; unscheduled draws 

on credit enhancements reflecting financial 

difficulties; substitution of credit or liquidity 

providers, or their failure to perform; adverse tax 

opinions or events affecting the tax-exempt status 

of the security; modifications to rights of security 

holders; bond calls; defeasances; release, 

substitution, or sale of property securing repayment 

of the securities; and rating changes. 

9Under Rule 15c2–12(b)(5)(i), annual filings are 

to be sent to all existing nationally recognized 

municipal securities information repositories 

(‘‘NRMSIRs’’) and any applicable state information 

depositories (‘‘SIDs’’), while material event notices 

may be sent to all existing NRMSIRs or to the 

MSRB, as well as to any SIDs. The MSRB, which 

currently operates CDINet to process and 

disseminate notices of material events submitted to 

the MSRB, previously petitioned the Commission to 

amend Rule 15c2–12 to remove the MSRB as a 

recipient of material event notices due to the very 

limited level of submissions received by the MSRB, 

constituting a negligible percentage of material 

event notices currently provided to the 

marketplace. See Letter from Diane G. Klinke, 

General Counsel, MSRB, to Jonathan G. Katz, 

Secretary, Commission, dated September 8, 2005. 

The Commission has published proposed 

amendments to Rule 15c2–12 to this effect. See 

Exchange Act Release No. 54863 (December 4, 

2006), 71 Fed. Reg. 71109 (December 8, 2006). In 

light of this proposed rule change, the MSRB is 

considering at this time whether to withdraw its 

petition. In addition, the MSRB intends, on a future 

date, to file a proposed rule change with the 

Continued 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58256; File No. SR–MSRB– 

2008–05] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing of Proposed 

Rule Change Relating to the 

Establishment of a Continuing 

Disclosure Service of the Electronic 

Municipal Market Access System 

(EMMA) 

July 30, 2008. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 29, 

2008, the Municipal Securities 

Rulemaking Board (‘‘MSRB’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’) 

the proposed rule change as described 

in Items I, II, and III below, which Items 

have been prepared by the MSRB. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The MSRB is filing with the 

Commission a proposed rule change to 

establish a continuing disclosure service 

(the ‘‘continuing disclosure service’’) of 

the MSRB’s Electronic Municipal 

Market Access system (‘‘EMMA’’). The 

continuing disclosure service would 

receive electronic submissions of, and 

would make publicly available on the 

Internet, continuing disclosure 

documents and related information from 

issuers, obligated persons and their 

agents pursuant to continuing 

disclosure undertakings entered into 

consistent with Exchange Act Rule 

15c2–12. The MSRB requests approval 

of the continuing disclosure service to 

commence operation on the later of 

January 1, 2009 or the effective date of 

any provisions of Rule 15c2–12 

providing for the MSRB to serve as the 

sole central repository for all electronic 

continuing disclosure information 

provided pursuant to Rule 15c2–12. 

The text of the proposed rule change 

is available on the MSRB’s Web site at 

http://www.msrb.org/msrb1/sec.asp, at 

the MSRB’s principal office, and at the 

Commission’s Public Reference Room. If 

approved, the rule text for the 

continuing disclosure service of EMMA 

would be available on the MSRB’s Web 

site at http://www.msrb.org/msrb1/ 

rulesandforms under the heading 

Information Facilities. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

MSRB included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. The MSRB has 

prepared summaries, set forth in 

Sections A, B, and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The proposed rule change would 

establish, as a component of EMMA, the 

continuing disclosure service for the 

receipt of, and for making available to 

the public of, continuing disclosure 

documents and related information to 

be submitted by issuers, obligated 

persons and their agents pursuant to 

continuing disclosure undertakings 

entered into consistent with Rule 15c2– 

12.3 As proposed, all continuing 

disclosure documents and related 

information would be submitted to the 

MSRB, free of charge, through an 

Internet-based electronic submitter 

interface or electronic computer-tocomputer data connection, at the 

election of the submitter, and public 

access to the documents and 

information would be provided through 

the continuing disclosure service on the 

Internet (the ‘‘EMMA portal’’) at no 

charge as well as through a paid realtime data stream subscription service.4

Under Rule 15c2–12(b)(5), an 

underwriter for a primary offering of 

municipal securities subject to the rule 

currently is prohibited from 

underwriting the offering unless the 

underwriter has determined that the 

issuer or an obligated person 5 for whom 

financial information or operating data 

is presented in the final official 

statement has undertaken in writing to 

provide certain items of information to 

the marketplace.6 Rule 15c2–12(b)(5) 

provides that such items include: (A) 

Annual financial information 

concerning obligated persons; 7 (B) 

audited financial statements for 

obligated persons if available and if not 

included in the annual financial 

information; (C) notices of certain 

events, if material; 8 and (D) notices of 

failures to provide annual financial 

information on or before the date 

specified in the written undertaking.9


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46162 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

Commission for permission to discontinue CDINet 

in view of the establishment of EMMA’s continuing 

disclosure service. 

10The MSRB understands that software currently 

is generally available for free that permits users to 

save, view and print PDF files, as well as to conduct 

word searches in word-searchable PDF documents. 

The MSRB would provide links for downloading 

such software on the EMMA portal. 

11Fees for subscriptions to the continuing 

disclosure collection would be established in a 

separate filing to be submitted to the Commission 

pursuant to Section 19(b)(2) of the Exchange Act 

prior to the commencement of operation of the 

continuing disclosure service, if approved by the 

Commission. 

As proposed, the continuing 

disclosure service would accept 

submissions of (i) continuing disclosure 

documents as described in Rule 15c2–

12, and (ii) other disclosure documents 

specified in continuing disclosure 

undertakings entered into consistent 

with Rule 15c2–12 but not specifically 

described in Rule 15c2–12. In 

connection with documents submitted 

to the continuing disclosure service, the 

submitter would provide, at the time of 

submission, information necessary to 

accurately identify: (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. 

Submitters would be responsible for the 

accuracy and completeness of all 

documents and information submitted 

to EMMA. 

The MSRB proposes that submissions 

to the continuing disclosure service be 

made as portable document format 

(PDF) files configured to permit 

documents to be saved, viewed, printed 

and retransmitted by electronic means. 

If the submitted file is a reproduction of 

the original document, the submitted 

file must maintain the graphical and 

textual integrity of the original 

document. In addition, starting in the 

first calendar quarter beginning at least 

nine months after approval by the 

Commission of this filing, such PDF 

files must be word-searchable (that is, 

allowing the user to search for specific 

terms used within the document 

through a search or find function 

available in most standard software 

packages), provided that diagrams, 

images and other non-textual elements 

would not be required to be wordsearchable due to current technical 

hurdles to uniformly producing such 

elements in word-searchable form 

without incurring undue costs. 

Although the MSRB would strongly 

encourage submitters to immediately 

begin making submissions as wordsearchable PDF files (preferably as 

native PDF or PDF normal files, which 

generally produce smaller and more 

easily downloadable files as compared 

to scanned PDF files), implementation 

of this requirement would be deferred as 

noted above to provide issuers, 

obligated persons and their agents with 

sufficient time to adapt their processes 

and systems to provide for the routine 

creation or conversion of continuing 

disclosure documents as wordsearchable PDF files. 

All submissions to the continuing 

disclosure service pursuant to this 

proposal would be made through 

password protected accounts on EMMA 

by: (i) Issuers, which may submit any 

documents with respect to their 

municipal securities; (ii) obligated 

persons, which may submit any 

documents with respect to any 

municipal securities for which they are 

obligated; and (iii) designated agents, 

which may be designated by issuers or 

obligated persons to make submissions 

on their behalf. Issuers and obligated 

persons would be permitted under the 

proposal to designate agents to submit 

documents and information on their 

behalf, and would be able to revoke the 

designation of any such agents, through 

the EMMA on-line account management 

utility. Such designated agents would be 

required to register to obtain passwordprotected accounts on EMMA in order 

to make submissions on behalf of the 

designating issuers or obligated persons. 

Any party identified in a continuing 

disclosure undertaking as a 

dissemination agent or other party 

responsible for disseminating 

continuing disclosure documents on 

behalf of an issuer or obligated person 

would be permitted to act as a 

designated agent for such issuer or 

obligated person, without a designation 

being made by the issuer or obligated 

person as described above, if such party 

certifies through the EMMA on-line 

account management utility that it is 

authorized to disseminate continuing 

disclosure documents on behalf of the 

issuer or obligated person under the 

continuing disclosure undertaking. The 

issuer or obligated person, through the 

EMMA on-line account management 

utility, would be able to revoke the 

authority of such party to act as a 

designated agent. 

As proposed, electronic submissions 

of continuing disclosure documents 

through the continuing disclosure 

service would be made by issuers, 

obligated persons and their agents, at no 

charge, through secured, passwordprotected interfaces. Continuing 

disclosure submitters would have a 

choice of making submissions to the 

proposed continuing disclosure service 

either through a Web-based electronic 

submission interface or through 

electronic computer-to-computer data 

connections with EMMA designed to 

receive submissions on a bulk or 

continuous basis. 

All documents and information 

submitted through the continuing 

disclosure service pursuant to this 

proposed rule change would be 

available to the public for free through 

the EMMA portal on the Internet, with 

documents made available for the life of 

the securities as PDF files for viewing, 

printing and downloading.10 As 

proposed, the EMMA portal would 

provide on-line search functions to 

enable users to readily identify and 

access documents that relate to specific 

municipal securities based on a broad 

range of search parameters. In addition, 

the MSRB proposes that real-time data 

stream subscriptions to continuing 

disclosure documents submitted to 

EMMA would be made available for a 

fee.11 The MSRB would not be 

responsible for the content of the 

information or documents submitted by 

submitters displayed on the EMMA 

portal or distributed to subscribers 

through the continuing disclosure 

subscription service. 

The MSRB has designed EMMA, 

including the EMMA portal, as a 

scalable system with sufficient current 

capacity and the ability to add further 

capacity to meet foreseeable usage levels 

based on reasonable estimates of 

expected usage, and the MSRB would 

monitor usage levels in order to assure 

continued capacity in the future. 

The MSRB may restrict or terminate 

malicious, illegal or abusive usage for 

such periods as may be necessary and 

appropriate to ensure continuous and 

efficient access to the EMMA portal and 

to maintain the integrity of EMMA and 

its operational components. Such usage 

may include, without limitation, usage 

intended to cause the EMMA portal to 

become inaccessible by other users, to 

cause the EMMA database or 

operational components to become 

corrupted or otherwise unusable, to 

alter the appearance or functionality of 

the EMMA portal, or to hyperlink to or 

otherwise use the EMMA portal or the 

information provided through the 

EMMA portal in furtherance of 

fraudulent or other illegal activities 


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Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 46163 

12 15 U.S.C. 78o–4(b)(2)(C). 

13Some states may require issuers and/or 

obligated persons to submit disclosure information 

to state information depositories or other venues 

pursuant to state law. 

14See comments from Peter J. Schmitt, CEO, DPC 

DATA Inc. (‘‘DPC’’), dated January 23, 2008. 

15See letter from Philip C. Moyer, CEO, EDGAR 

Online, Inc. (‘‘EDGAR Online’’), to Ernesto A. 

Lanza, Senior Associate General Counsel, MSRB, 

dated December 17, 2007. In addition, the MSRB 

has received several inquiries through the pilot 

EMMA portal’s feedback (http://emma.msrb.org/ 

AboutEMMA/Feedback.aspx) and contact (http:// 

emma.msrb.org/AboutEMMA/ContactUs.aspx) Web 

forms from members of the public seeking 

information on using EMMA documents and data, 

through the EMMA portal or subscription services, 

for the purposes of re-dissemination to their 

customers. 

16See footnote 3 supra. 

17See comments of DPC. DPC further stated, 

‘‘There is precedent of other Self-Regulatory 

Organizations (SROs) offering such sophisticated 

value-added information to the market, but only on 

a fee basis.’’ DPC also states that ‘‘the MSRB’s 

sample pilot portal at http://www.msrb.org/msrb1/ 

accessportal/ 

SampleComprehensiveDisclosureDisplay.htm 

provides a glimpse of specific value-added features 

the MSRB intends to offer the public free of charge. 

Among these are nine-digit CUSIP searches, 

hyperlinks to bond issuers Web sites, an ‘alerts’

service to users of the portal, sophisticated 

document viewing options, links to other related 

documents in the portals disclosure archive, and 

subsequent event notifications that equate to 

custom research. These features and capabilities are 

well in excess of the system that the MSRB has 

pointed to as its model, the SEC’s own EDGAR.’’

18See letter from EDGAR Online. EDGAR Online 

further stated, ‘‘In spite of a great deal of work by 

the Municipal Issuers on their disclosures—a small 

group of companies control access for the entire 

market to the documents that are supposed to be 

public. * * * The rigid control of public 

information dissuades other information providers 

from trying to enter or innovate for this market. 

This means that there are few people working on 

improving ease of use, depth of analysis, 

thoroughness of information or more effective 

means of delivery * * * The process of managing 

these documents consumes most of the resources of 

these few information providers and the time of 

investors. As a result, the information contained in 

these documents—risks and opportunities—are 

usually lost because there are few sources of good 

comparability and data.’’

19The MSRB notes that subscribers may be 

subject to proprietary rights of third parties in 

information provided by such third parties that is 

made available through the subscription. 

(such as, for example, creating any 

inference of MSRB complicity with or 

approval of such fraudulent or illegal 

activities or creating a false impression 

that information used to further such 

fraudulent or illegal activities has been 

obtained from the MSRB or EMMA). 

Measures taken by the MSRB in 

response to such unacceptable usage 

shall be designed to minimize any 

potentially negative impact on the 

ability to access the EMMA portal. 

2. Statutory Basis 

The MSRB believes that the proposed 

rule change is consistent with Section 

15B(b)(2)(C) of the Act,12 which 

provides that the MSRB’s rules shall: 

Be designed to prevent fraudulent and 

manipulative acts and practices, to promote 

just and equitable principles of trade, to 

foster cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with respect 

to, and facilitating transactions in municipal 

securities, to remove impediments to and 

perfect the mechanism of a free and open 

market in municipal securities, and, in 

general, to protect investors and the public 

interest. 

The MSRB believes that the proposed 

rule change is consistent with the Act. 

The continuing disclosure service 

would serve as an additional 

mechanism by which the MSRB works 

toward removing impediments to and 

helping to perfect the mechanisms of a 

free and open market in municipal 

securities. The continuing disclosure 

service would help make information 

useful for making investment decisions 

more easily available to all participants 

in the municipal securities market on an 

equal basis throughout the life of the 

securities without charge through a 

centralized, searchable Internet-based 

repository, thereby removing potential 

barriers to obtaining such information. 

Broad access to continuing disclosure 

documents through the continuing 

disclosure service should assist in 

preventing fraudulent and manipulative 

acts and practices by improving the 

opportunity for public investors to 

access material information about 

issuers and their securities. 

Furthermore, the continuing 

disclosure service should reduce the 

effort necessary for issuers and obligated 

persons to comply with their continuing 

disclosure undertakings by making 

submissions to a single venue 13 using 

an electronic submission process, which 

should result in lower costs to issuers 

and savings to their citizens. Similarly, 

a single centralized and searchable 

venue for free public access to 

disclosure information should promote 

a more fair and efficient municipal 

securities market in which transactions 

are effected on the basis of material 

information available to all parties to 

such transactions, which should allow 

for fairer pricing of transactions based 

on a more complete understanding of 

the terms of the securities and the 

potential investment risks. Free access 

to this information—previously 

available in most cases only through 

paid subscription services or on a perdocument fee basis—should reduce 

transaction costs for dealers and 

investors. 

All of these factors serve to promote 

the statutory mandate of the MSRB to 

protect investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The MSRB does not believe that the 

proposed rule change would impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. Documents and 

information provided through the 

continuing disclosure service would be 

available to all persons simultaneously. 

In addition to making the documents 

and information available for free on the 

EMMA portal to all members of the 

public, the MSRB would make such 

documents and information available by 

subscription on an equal and nondiscriminatory basis without imposing 

restrictions on subscribers from, or 

imposing additional charges on 

subscribers for, re-disseminating such 

documents or otherwise offering valueadded services and products based on 

such documents on terms determined 

by each subscriber. 

The MSRB has considered carefully a 

commentator’s concern regarding the 

MSRB’s plans to develop EMMA,14 as 

well as expressions of interest from 

private enterprises in entering this 

market.15 One commentator on the Pilot 

Filing 16 stated that the MSRB’s 

intention to combine continuing 

disclosures with primary market 

disclosures and trade price data ‘‘breaks 

new ground among regulatory bodies in 

terms of value-added content available 

to the public at no charge,’’ arguing that 

the MSRB would ‘‘effectively take over 

the business of providing value-added 

content.’’ 17 Another commentator on 

the Pilot Filing argued in favor of the 

creation of a ‘‘publicly accessible 

storage and dissemination system’’ for 

all filings in the municipal securities 

market, stating that the current 

municipal securities disclosure model 

‘‘severely limits innovation and access’’

to disclosures and ‘‘locks up public 

documents in private hands while the 

proposed portal run by a public entity 

will encourage transparency in the 

municipal securities market and create 

a healthy ecosystem of information that 

will ultimately benefit both the 

investment community and the 

municipalities that seek access to public 

markets.’’ 18

The MSRB believes that the 

availability of continuing disclosure 

documents through the EMMA portal 

and the continuing disclosure 

subscription service, without the 

imposition of limitations on or 

additional charges for redistribution of 

such documents to customers, clients or 

other end-users of the subscriber,19


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46164 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

20See MSRB Notice 2008–05 (January 31, 2008). 

21See MSRB Notice 2006–19 (July 27, 2006); 

MSRB Notice 2007–5 (January 25, 2007); MSRB 

Notice 2007–33 (November 15, 2007). Only those 

comments of the commentators on the Prior Notice 

and the Pilot Filing relating to the continuing 

disclosure service are discussed in this filing. 

22See letters from Leslie Norwood, Vice President 

and Assistant General Counsel, Bond Market 

Association (now known as Securities Industry and 

Financial Markets Association, or ‘‘SIFMA’’), to Mr. 

Lanza, dated September 15, 2006; Thomas Sargant, 

President, Regional Municipal Operations 

Association, to Mr. Lanza, dated September 27, 

2006; Gary P. Machak, Chairman, Municipal 

Advisory Council of Texas, to Mr. Lanza, dated 

September 14, 2006; Elizabeth R. Krentzman, 

General Counsel, Investment Company Institute 

(‘‘ICI’’), to Mr. Lanza, dated September 14, 2006; 

Ruth Brod, Consultant, TRB Associates, to Mr. 

Lanza, dated September 14, 2006; Terry L. 

Atkinson, Managing Director, UBS Securities LLC, 

to Mr. Lanza, dated September 15, 2006. 

23See letters from Ms. Norwood, Managing 

Director and Associate General Counsel, SIFMA, to 

Mr. Lanza, dated December 14, 2007; S. Lauren 

Heyne, Chief Compliance Officer, R.W. Smith & 

Associates, Inc., to Mr. Lanza, dated December 17, 

2007. 

would promote competition among 

private data vendors and other 

enterprises engaged in or interested in 

becoming engaged in information 

services by eliminating existing barriers 

to new entrants into the market for 

municipal securities information 

services. Private enterprises would be 

able to obtain a complete collection of 

all continuing disclosure documents 

submitted by issuers, obligated persons 

and their agents as contemplated by 

Exchange Act Rule 15c2–12 from a 

single source using a single consistent 

indexing method since all such 

documents would be submitted to the 

continuing disclosure service and 

would be indexed as received using a 

single indexing logic. Currently, parties 

wishing to obtain a complete collection 

of continuing disclosure documents 

must consider whether continuing 

disclosure documents have been 

uniformly provided to all existing 

nationally recognized municipal 

securities information repositories as 

contemplated under Rule 15c2–12 and, 

if not, might need to undertake the effort 

and expense of obtaining continuing 

disclosure documents from two or more 

of the existing sources, which may have 

differing terms of use that may limit the 

ability to re-disseminate such 

documents. 

Furthermore, the availability of all 

continuing disclosure documents in a 

defined electronic format in one venue 

should make document handling, 

storage and dissemination more efficient 

than under the current situation in 

which documents may exist in paper 

form as well as in various different 

electronic formats. The existence of a 

single consistent indexing logic to be 

used by the continuing disclosure 

service, and the inclusion of key 

indexing information on the EMMA 

portal and in the continuing disclosure 

subscription service, would relieve the 

burden that private information vendors 

would otherwise have of creating such 

an index. The standardized continuing 

disclosure document collection and 

indexing information provided through 

the continuing disclosure service would 

be available equally to existing 

information vendors and parties seeking 

to enter the market, thereby promoting 

competition among all such private 

parties in a non-discriminatory manner 

with respect to the value-added services 

they may wish to offer based on the 

continuing disclosure document 

collection. Such parties would likely 

bear some initial burden of ensuring 

that their infrastructure and facilities are 

capable of receiving and processing the 

information provided through the 

continuing disclosure service, but the 

MSRB believes that such parties would 

realize savings from the efficiencies 

described above. 

Thus, although the MSRB recognizes 

that the continuing disclosure service 

might require private enterprises to 

modify some aspects of the way they 

undertake their current business 

activities, the MSRB believes that the 

continuing disclosure service would 

promote, rather than hinder, further 

competition, growth and innovation in 

this area. The MSRB further believes 

that the operation by the MSRB of the 

continuing disclosure service would not 

result in the MSRB taking over the 

business of providing value-added 

content but instead serve as a basis on 

which private enterprises could 

themselves concentrate more of their 

resources on developing and marketing 

value-added services. The MSRB 

believes that much of the impact of the 

proposed rule change on commercial 

enterprises would result from the 

increased competition in the 

marketplace resulting from the entry of 

additional commercial enterprises in 

competition with such existing market 

participants with respect to value-added 

services, rather than from the operation 

of the continuing disclosure service as 

a source of the raw documents and 

related information to the public. The 

MSRB believes that the benefits realized 

by the investing public from the broader 

and easier availability of disclosure 

information about municipal securities 

that would be provided through the 

continuing disclosure service would 

justify any potentially negative impact 

on existing enterprises from the 

operation of EMMA. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

In a notice published by the MSRB on 

January 31, 2008, the MSRB described 

its plan for implementing a continuing 

disclosure service that would be 

integrated into other services to be 

offered through EMMA (the ‘‘2008 

Notice’’).20 In particular, the MSRB 

stated its plan to institute the 

continuing disclosure service to accept 

submissions of continuing disclosure 

information in a designated electronic 

format directly from issuers, obligated 

persons and their designated agents 

acting on their behalf. EMMA’s 

continuing disclosure service would be 

designed to accept such electronic 

submissions, including basic indexing 

information, either through a Web-based 

interface or by computer-to-computer 

upload or data stream. In addition to 

making continuing disclosures available 

through the EMMA portal, the MSRB 

would make such disclosures available 

through a paid real-time data stream 

subscription for re-dissemination or 

other use by subscribers. In publishing 

the 2008 Notice, the MSRB sought 

comment on certain basic elements 

relating to the incorporation into EMMA 

of continuing disclosure information 

provided by issuers and obligated 

persons under Rule 15c2–12, as 

discussed below. The 2008 Notice had 

been published by the MSRB following 

a series of other notices for comment 

(the ‘‘Prior Notices’’) 21 and the filing 

with the Commission of the Pilot Filing 

in connection with the establishment of 

the MSRB’s proposed centralized 

disclosure utility. 

Several commentators on the Prior 

Notices discussed issues relating to 

continuing disclosure. These 

commentators stated that continuing 

disclosures should be made available on 

the same platform as other 

disclosures,22 with some commentators 

supporting the MSRB’s willingness to 

establish a comprehensive disclosure 

system that included continuing 

disclosure.23 The MSRB’s plan to 

establish the continuing disclosure 

service as a component of EMMA would 

ensure that continuing disclosure 

documents would be made available to 

the public through the EMMA portal. 

A commentator on the Pilot Filing 

suggested that, if the Commission were 

to make the MSRB the sole secondary 

market disclosure filing venue for 

issuers and obligated persons, the 

Commission would move ‘‘closer to the 


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24See comments of DPC. See also footnote 14 

supra. 

25See Exchange Act Section 15B(d). 

26See comments of DPC. 

27See letter from EDGAR Online. See also 

footnote 15 supra. 

28See letters from Rob Yolland, Chairman, 

National Federation of Municipal Analysts, to Mr. 

Lanza, dated March 10, 2008; Kathleen A. Aho, 

President, National Association of Independent 

Public Finance Advisors (‘‘NAIPFA’’), to Lynnette 

Hotchkiss, Executive Director, MSRB, dated March 

10, 2008; Robert Donovan, Executive Director, 

Rhode Island Health and Educational Building 

Corporation, Stephen M. Fillebrown, Director of 

Research, Investor Relations and Compliance, NJ 

Health Care Facilities Financing Authority, and 

Charles A. Samuels and Meghan B. Burke, Mintz 

Levin Cohn Ferris Glovsky and Popeo PC, on behalf 

of National Association of Health and Educational 

Facilities Finance Authorities (‘‘NAHEFFA’’), to Mr. 

Lanza, dated March 3, 2008; Cristeena G. Naser, 

Senior Counsel, American Bankers Association, to 

Mr. Lanza, dated February 28, 2008; Rick Farrell, 

Executive Director, Council of Infrastructure 

Financing Authorities (‘‘CIFA’’), to Mr. Lanza, dated 

February 25, 2008; Jack Addams, Managing 

Director, First Southwest Company (‘‘First 

Southwest’’), to Mr. Lanza, dated February 25, 2008; 

Jeffrey L. Esser, Executive Director and CEO, 

Government Finance Officers Association 

(‘‘GFOA’’), Vernon L. Larson, President, National 

Association of State Auditors, Comptrollers and 

Treasurers (‘‘NASACT’’), & South Dakota State 

Treasurer, and Lynn Jenkins, President, National 

Association of State Treasurers (‘‘NAST’’), & Kansas 

State Treasurer, jointly, to Mr. Lanza, dated 

February 25, 2008; Heather Traeger, Assistant 

Counsel, ICI, to Mr. Lanza, dated February 25, 2008; 

Ms. Norwood, SIFMA, to Mr. Lanza, dated February 

25, 2008. 

29See letters from CIFA; GFOA, NASACT and 

NAST; NAHEFFA; NAIPFA. GFOA, NASACT and 

NAST also stated, and NAHEFFA agreed, that ‘‘Rule 

15c2–12 should only be changed to allow for 

electronic submission of disclosure documents to 

one central location, and that no other changes to 

the Rule should be made.’’

30See letters from CIFA; GFOA, NASACT and 

NAST; NAHEFFA. 31See letter from NAHEFFA. 32See letter from J. Foster Clark, President, 

National Association of Bond Lawyers (‘‘NABL’’), to 

Mr. Lanza, dated February 25, 2008. 

33See letter from First Southwest. 

Tower Amendment danger zone.’’ 24 As 

noted in section 3(b) of this filing, the 

MSRB believes that the continuing 

disclosure service is consistent with the 

MSRB’s statutory mandate under 

Section 15B of the Act. In particular, the 

MSRB believes that the operation of the 

continuing disclosure service would in 

no way violate the restrictions placed on 

the MSRB’s activities by the so-called 

Tower Amendment.25 The MSRB 

believes that the proposed continuing 

disclosure service is consistent with the 

MSRB’s mandate under the Act to adopt 

rules that, among other things, protect 

investors and the public interest by 

providing a free centralized source of 

information for retail investors. 

As discussed in greater detail in 

section 4 of this filing, this commentator 

also stated that the MSRB’s intention to 

combine continuing disclosures with 

primary market disclosures and trade 

price data ‘‘breaks new ground among 

regulatory bodies in terms of valueadded content available to the public at 

no charge,’’ expressing the view that the 

MSRB would ‘‘effectively take over the 

business of providing value-added 

content.’’26 Another commentator on 

the Pilot Filing argued in favor of the 

creation of a ‘‘publicly accessible 

storage and dissemination system’’ for 

all filings in the municipal securities 

market, stating that the current 

municipal securities disclosure model 

‘‘severely limits innovation and access’’

to disclosures and ‘‘locks up public 

documents in private hands while the 

proposed portal run by a public entity 

will encourage transparency in the 

municipal securities market and create 

a healthy ecosystem of information that 

will ultimately benefit both the 

investment community and the 

municipalities that seek access to public 

markets.’’ 27

As discussed in greater detail in 

section 4 of this filing, the MSRB 

believes that the operation by the MSRB 

of the continuing disclosure service 

would not result in the MSRB taking 

over the business of providing valueadded content but instead serve as a 

basis on which private enterprises could 

themselves concentrate more of their 

resources on developing and marketing 

value-added services. The MSRB 

believes that much of the impact of the 

proposed rule change on commercial 

enterprises would result from the 

increased competition in the 

marketplace resulting from the entry of 

additional commercial enterprises in 

competition with such existing market 

participants with respect to value-added 

services, rather than from the operation 

of continuing disclosure service as a 

source of the raw documents and related 

information to the public. Although the 

MSRB recognizes that the continuing 

disclosure service might require private 

enterprises to modify some aspects of 

the way they undertake their current 

business activities, the MSRB believes 

that the continuing disclosure service 

would promote, rather than hinder, 

further competition, growth and 

innovation in this area. 

Most commentators on the 2008 

Notice were supportive of the MSRB’s 

decision to begin planning for the 

continuing disclosure service,28

although some commentators would not 

commit fully to support this process 

until reviewing possible Commission 

amendments to Rule 15c2–12 necessary 

for the development of the MSRB’s 

continuing disclosure service, as well as 

specific details relating to the 

implementation by the MSRB of the 

proposed continuing disclosure 

service.29 Commentators representative 

of issuers encouraged the MSRB to work 

with the issuer community in 

developing the submission process.30

The MSRB has participated in a series 

of meetings and demonstrations with 

issuer organizations to discuss the 

development of EMMA, including the 

continuing disclosure service. The 

MSRB would continue to work with the 

issuer community, as well as with the 

other relevant segments of the 

municipal securities marketplace, as 

development of the continuing 

disclosure service proceeds. In addition, 

the MSRB intends to work with issuer 

organizations to assist issuers in 

adapting to the process for submitting 

continuing disclosure documents to 

EMMA, including coordinated efforts 

targeted at issuers making submissions 

under continuing disclosure 

undertakings entered into prior to the 

continuing disclosure service becoming 

operational, with a view to ensuring that 

means for making submissions of 

continuing disclosure documents 

through EMMA are available for issuers 

that have not yet fully adapted to 

EMMA’s all-electronic submission 

process. 

One commentator asked whether 

periodic filings other than submissions 

of annual financial information, such as 

quarterly or monthly financial results, 

would be accepted.31 A second 

commentator sought clarification on 

whether continuing disclosure 

information for offerings sold prior to 

the launch of the continuing disclosure 

service would be accepted and made 

publicly available.32 Another 

commentator asked whether historical 

documents would be included.33

The MSRB understands that issuers 

and obligated persons have often sought 

to disseminate to the marketplace items 

of continuing disclosure that are in 

addition to the specific items of 

continuing disclosure described in Rule 

15c2–12. Such additional items may 

include, but are not limited to, quarterly 

or monthly financial information and 

notices of other events. In some cases 

such additional items of disclosure may 

be specified under a continuing 

disclosure undertaking entered into 

consistent with Rule 15c2–12. The 

continuing disclosure documents to be 

made publicly available through the 

EMMA portal would consist of the 

specific items of continuing disclosure 

described in Rule 15c2–12 and any 

additional disclosure items as 

specifically set forth in a continuing 


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34The MSRB supports the dissemination of 

additional continuing disclosures beyond the 

baseline established by Rule 15c2–12 and may 

consider in the future the possible expansion of the 

continuing disclosure service to include additional 

voluntary secondary market disclosures, which 

would be the subject of future filings with the 

Commission. 

35While EMMA would not include historical 

documents, the continuing disclosure documents 

that would be received by EMMA through the 

continuing disclosure service would constitute the 

most up-to-date disclosures made by or on behalf 

of submitting issuers and obligated persons 

applicable to their securities. 

36See letter from NABL. 

37See letters from NAHEFFA; First Southwest. 

38See letters from NAHEFFA. 

39See letter from GFOA, NASACT and NAST. 

40See letters from NAHEFFA; First Southwest. 

41See second letter from SIFMA. 

42See second letter from SIFMA. The Cover Sheet 

referenced in the comment is a voluntary form 

created by industry participants for use in 

connection with submissions of continuing 

disclosures. 

disclosure undertaking.34 Continuing 

disclosure documents would be made 

available for any issue for which such 

documents have been submitted to 

EMMA, regardless of whether the 

continuing disclosure undertaking was 

entered into before or after the 

establishment of the continuing 

disclosure service. EMMA would make 

available only those continuing 

disclosures submitted to EMMA on or 

after the launch of the continuing 

disclosure service.35

One commentator asked whether all 

continuing disclosure documents and 

information would be available for free 

on the EMMA portal or whether some 

portions would only be available to paid 

subscribers.36 Other commentators 

sought clarification on the timing of 

information that would be provided 

through a subscription as compared to 

the time of posting the information on 

the EMMA portal.37 As noted in this 

filing, all continuing disclosures 

received by the MSRB would be 

accessible for free on the EMMA portal 

and would also be available, 

simultaneously with posting on the 

EMMA portal, through a data-stream 

subscription for a fee. The subscription 

would not provide any documents or 

information in addition to what is made 

public through the EMMA Web site. 

A commentator asked whether special 

software or other arrangements would 

be necessary for issuers, obligated 

persons and their agents to make 

submissions of continuing disclosure 

documents. This commentator also 

asked whether submitters would be 

provided with electronic confirmation 

that disclosure materials were received 

by the continuing disclosure service.38

Continuing disclosure documents may 

be converted from other electronic 

formats to PDF using various free or 

commercially available software 

programs or plug-ins. In those cases 

where the original continuing disclosure 

document exists solely in paper format 

(which the MSRB believes is not 

common and should become 

increasingly rare), submitters may use 

the services of widely available 

commercial copying and document 

handling enterprises or may use existing 

or newly acquired scanning hardware. 

The Web-based data-entry process that 

would be established for on-line 

submissions to the continuing 

disclosure service would require no 

special software other than a Web 

browser. Similarly, on-line uploads of 

data files in extensible markup language 

(XML) do not require any special 

software but would require 

programming to create XML files and to 

provide a process for accurately 

populating the XML files with necessary 

data. Computer-to-computer 

connections, an optional means for 

submitting continuing disclosures 

expected to be used primarily by agents 

acting on behalf of multiple issuers and/ 

or obligated persons, would require 

submitters to use commercially 

available products or to undertake 

programming (at the election of the 

submitter) to interface with an EMMA 

Web service. All submission methods 

would provide appropriate feedback to 

submitters for error correction and 

submission confirmation purposes, 

which may require some programming 

by submitters to ensure they realize the 

full benefit of such feedback. 

The 2008 Notice sought comment on 

whether the continuing disclosure 

service should accept continuing 

disclosure submissions from a third 

party with respect to an issuer’s 

securities only if the issuer has 

affirmatively designated that such third 

party is authorized to act as its agent, or 

whether submissions from any 

registered EMMA user should be 

accepted on behalf of an issuer unless 

the issuer has affirmatively indicated 

that it wishes to take control over which 

parties can submit on its behalf. 

Three commentators jointly stated 

that ‘‘third parties should be able to 

submit on behalf of an issuer if and only 

if the issuer has affirmatively designated 

the third party agent to do so [emphasis 

in original].’’ 39 Two other 

commentators agreed,40 while another 

disagreed,41 stating that it was 

‘‘concerned that if EMMA does not 

accept continuing disclosure from a 

third party, unless an issuer specifically 

authorizes the third party to EMMA, 

there will be cases of issuer inaction 

preventing timely disclosure.’’ This 

commentator stated that, to avoid 

potential delays in the dissemination of 

disclosure to the marketplace caused by 

a requirement that the issuer authorize 

an agent to act on its behalf, it believed 

that ‘‘the current practice set forth in the 

standard Municipal Secondary Market 

Disclosure Information Cover Sheet 

should be continued, which requires the 

person/entity submitting information to 

represent affirmatively that the person is 

authorized to submit the 

information.’’ 42

The MSRB believes that the ultimate 

authority to determine who may submit 

documents on behalf of the issuer or 

obligated person should lie with such 

issuer or obligated person and, as a 

result, the MSRB is proposing to 

provide that issuers and obligated 

persons may designate agents to submit 

documents and information on their 

behalf, and may revoke such 

designation, through the EMMA on-line 

account management utility, and such 

designated agents must register to obtain 

password-protected accounts on EMMA 

in order to make submissions on behalf 

of the designating issuers or obligated 

persons. Any party identified in a 

continuing disclosure undertaking as a 

dissemination agent or other party 

responsible for disseminating 

continuing disclosure documents or 

other disclosure documents specified 

pursuant to such continuing disclosure 

undertaking may also act as a 

designated agent for such issuer or 

obligated person, without the necessity 

of the issuer or obligated person making 

a designation through the EMMA online account management utility, upon 

such party certifying through the EMMA 

on-line account management utility as 

to its authority to make submissions on 

behalf of the issuer or obligated person 

under the continuing disclosure 

undertaking. The issuer or obligated 

person, through the EMMA on-line 

account management utility, may revoke 

such authority to act as a designated 

agent. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 


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A. By order approve such proposed 

rule change, or 

B. Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

The MSRB has consented to an 

extension of the time period specified in 

Section 19(b)(2) of the Exchange Act to 

120 days after the date of publication of 

notice of filing of this proposed rule 

change. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–MSRB–2008–05 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–MSRB–2008–05. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of the MSRB. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–MSRB–2008–05 and should 

be submitted on or before September 22, 

2008. 

By the Commission. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–17857 Filed 8–4–08; 8:45 am] 

BILLING CODE 8010–01–P 


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