Amendments to Municipal Securities Disclosure Rule

The Securities and Exchange Commission (the “SEC”) has announced amendments to a rule under the Securities and Exchange Act of 1934 relating to municipal securities disclosure. Effective July 1, 2009, the existing Rule 15c2-12 will be amended to require a broker, dealer, or municipal securities dealer (“Participating Underwriter”), prior to underwriting municipal securities, to obtain an undertaking from the issuer or other obligated person thereunder, to provide all continuing disclosure agreements and related information to the Municipal Securities Rulemaking Board (“MSRB”), instead of one of the four Nationally Recognized Municipal Securities Information Repositories (“NRMSIRs”) and the existing state information depositories (“SIDs”). The amendments will require this information to be provided in electronic format and accompanied by identifying information as prescribed by the MSRB. This advisory is being furnished to you as a courtesy by the Public Finance Group of Maynard, Cooper & Gale, P.C., Birmingham, Alabama.

The following highlights of the amendments are particularly noteworthy for those in the public finance community:

Single Submission Location. Effective July 1, 2009, issuers or other obligated parties under continuing disclosure agreements must file their continuing disclosure information using the Electronic Municipal Market Access (“EMMA”), a system operated by the MSRB. The amendments do not create additional disclosure obligations on issuers, agents or obligated persons; but they significantly alter the submission process and related requirements affecting Participating Underwriters. EMMA is an SEC-approved website that provides the public with free, searchable access to information about municipal securities. Such information includes financial information and operating data, along with certain material event notices. EMMA can be accessed at www.emma.msrb.org.

Small Issuer Exemption Repeal. Existing Rule 15c2-12(d)(2)(ii) currently requires issuers or obligated persons with $10 million or less of outstanding debt (i.e., “small issuers”) to provide annual continuing disclosure only if specifically requested by an investor. For bond issues closed on or after July 1, 2009, this rule will be amended to require small issuers to make continuing disclosure using EMMA regardless of whether an investor requests it. Participating Underwriters must obtain an undertaking from small issuers to provide annual financial information or operating data, if customarily prepared and publicly available, using EMMA.

Effective July 1, 2009, continuing disclosure documents filed with existing NRMSRS or SIDs will no longer satisfy the requirements of Rule 15c2-12.

For more information on these amendments, please contact one of our public finance attorneys listed to the right.