EMMA

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See also municipal securities and Municipal Securities Rulemaking Board

Contents

Overview

The Electronic Municipal Market Access system, or EMMA, is a comprehensive, centralized online source for free access to municipal disclosures, market transparency data and educational materials about the municipal securities market.

The Electronic Municipal Market Access (EMMA) website was established to increase the broad comprehensive access to vital disclosure and transparency information in the municipal securities market.

EMMA provides investors with key information about municipal securities, free of charge. The information on EMMA is presented in a manner specifically tailored for retail, non-professional investors who may not be experts in financial or investing matters. EMMA is the sister to the SEC's corporate disclosure system, EDGAR.

EMMA is maintained by the Municipal Securities Rulemaking Board (MRSB).

  • MSRB and EMMA Presentation - New York Outreach Seminar, Harvard Club, November 2, 2010

SEC approves expansion to include ARS and VRDO data

SEC mandates "Continuing Disclosure"

Under Exchange Act Rule 15c2-12(b)(5)(i)(C), notices of the following events currently are required to be submitted to the MSRB, if material:

  • 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

Financial/Operating Data

Rule 15c2-12-Based Financial/Operating Data

  • Annual financial information concerning obligated persons
  • Audited financial statements for obligated persons if available and if not included in the annual financial information
  • Notice of failure to provide annual financial information on or before the date specified in the continuing disclosure undertaking
  • Additional/Voluntary Financial/Operating Data
  • Quarterly/monthly financial information
  • Change in fiscal year/timing of annual disclosure
  • Change in accounting standard
  • Interim/additional financial information/operating data
  • Budget
  • Investment/debt/financial policy
  • Information provided to rating agency, credit/liquidity provider or other third parties consultant reports
  • Other financial/operating data

Event-based disclosures

Rule 15c2-12 Material Event Notices

  • 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
  • Rating changes

Additional/voluntary event-based disclosures

  • Amendment to continuing disclosure undertaking
  • Change in obligated person
  • Notice to investors pursuant to bond documents
  • Communication from the Internal Revenue Service
  • Tender offer/secondary market purchases
  • Bid for auction rate or other securities
  • Capital or other financing plan
  • Litigation/enforcement action
  • Merger/consolidation/reorganization/insolvency/bankruptcy
  • Change of trustee, tender agent, remarketing agent, or other on-going party
  • Derivative or other similar transaction
  • Other event-based disclosures


Voluntary Continuing Disclosure

Source: MSRB NOTICE 2009-31 (JUNE 10, 2009)

On June 3, 2009, the Municipal Securities Rulemaking Board (the “MSRB”) received approval from the Securities and Exchange Commission (the “Commission”) for the Electronic Municipal Market Access system (“EMMA”) to accept, and to make publicly available on the EMMA web portal, voluntary electronic submissions by issuers, obligated persons and their agents, of continuing disclosure documents provided other than in connection with Exchange Act Rule 15c2-12.

EMMA’s continuing disclosure service will begin accepting such voluntary continuing disclosures effective July 1, 2009.

Such voluntary continuing disclosures will be in addition to continuing disclosure documents described in Exchange Act Rule 15c2-12 and other disclosure documents specified in continuing disclosure undertakings, but not specifically described in Rule 15c2-12, that are currently accepted by the pilot phase of the EMMA continuing disclosure service.

Thus, beginning on July 1, 2009, the continuing disclosure service of EMMA will accept submissions of, and make publicly available through the EMMA web portal, the following categories of continuing disclosure documents... (listed in the sections below).

MSRB AMENDS PENDING PROPOSAL ON ADDITIONAL VOLUNTARY SUBMISSIONS BY ISSUERS AND OBLIGATED PERSONS TO THE MSRB’S ELECTRONIC MUNICIPAL MARKET ACCESS SYSTEM (EMMA)

MSRB AMENDS PENDING PROPOSAL ON UNDERWRITER SUBMISSION OF INFORMATION ABOUT CONTINUING DISCLOSURE UNDERTAKINGS TO THE MSRB’S ELECTRONIC MUNICIPAL MARKET ACCESS SYSTEM (EMMA)

Financial/Operating Data

Rule 15c2-12-Based Financial/Operating Data

  • Annual financial information concerning obligated persons
  • Audited financial statements for obligated persons if available and if not included in the annual financial information
  • Notice of failure to provide annual financial information on or before the date specified in the continuing disclosure undertaking
  • Additional/Voluntary Financial/Operating Data
  • Quarterly/monthly financial information
  • Change in fiscal year/timing of annual disclosure
  • Change in accounting standard
  • Interim/additional financial information/operating data
  • Budget
  • Investment/debt/financial policy
  • Information provided to rating agency, credit/liquidity provider or other third parties

consultant reports

  • Other financial/operating data

Event-Based Disclosures

Rule 15c2-12 Material Event Notices

  • 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
  • Rating changes

Additional/Voluntary Event-Based Disclosures

  • Amendment to continuing disclosure undertaking
  • Change in obligated person
  • Notice to investors pursuant to bond documents
  • Communication from the Internal Revenue Service
  • Tender offer/secondary market purchases
  • Bid for auction rate or other securities
  • Capital or other financing plan
  • Litigation/enforcement action
  • Merger/consolidation/reorganization/insolvency/bankruptcy
  • Change of trustee, tender agent, remarketing agent, or other on-going party
  • Derivative or other similar transaction
  • Other event-based disclosures

Voluntary Disclosure specifics

There is no obligation upon any issuer or obligated person to make a submission of any voluntary continuing disclosure document.

The categories of voluntary disclosure listed above are for the convenience of submitters and users of such documents and do not represent the MSRB’s opinion as to the appropriate items of disclosure with respect to any specific municipal security.

The availability of such categories does not imply or create an obligation to make any such disclosures, and it will not be uncommon for one or many of the categories to be inapplicable to any particular security.

Further, the nature of the specific documents submitted for a particular category may vary widely. The MSRB believes that various factors appropriate to the particular facts and circumstances of a municipal security transaction should be assessed by issuers, obligated persons and their agents in coming to a decision on whether to make a voluntary submission of continuing disclosure to EMMA, regardless of the categories listed above, to the extent such parties are not otherwise obligated to make such disclosures.

With respect to the submission process through EMMA, the various categories of continuing disclosure described herein will be organized to differentiate between categories of items specified under Rule 15c2-12 and additional or voluntary categories not specifically identified under Rule 15c2-12.

In most cases, submitters will be able to index a single submitted document into multiple applicable categories, including categories under both Rule 15c2-12 Disclosures and Additional/Voluntary Disclosures.

Only those categories for which submissions have been made for a particular security will be displayed on the EMMA web portal page for such security. Over time, the MSRB may combine two or more categories, may divide any category into two or more new categories or subcategories, or may form additional categories for purposes of indexing documents submitted in the “other financial/operating data” or “other event-based disclosures” general category, as appropriate, based on the types of documents received.

Retail investors face high markups and opaque bond pricing

"G. Eugene Boyce, a 77-year-old attorney in Raleigh, N.C., didn't know the first thing about the bond market until the fall of 2008. That's when his Wachovia Securities broker persuaded him to invest $3 million in tax-free North Carolina municipal bonds. Eager to make sure he was getting his money's worth, Boyce decided to give himself a crash course in bond pricing. It didn't take long for him to conclude he was being fleeced.

With a little digging, Boyce uncovered evidence that, on top of the 0.5% commission outlined in his brokerage agreement, Wachovia had clipped him for a hefty--and undisclosed--markup on a half-million dollars' worth of bonds issued by the city of Salisbury, N.C. Soon Boyce was convinced Wachovia had added excessive markups to millions of dollars' worth of his family's other bond trades as well. Last June he filed a lawsuit now in federal court accusing the firm of fraud and unfair trade practices. (Wells Fargo, which now owns Wachovia, declined to comment.)

"This is an older person's market, and I know how naive and untrained people my age can be," Boyce says.

Even for those who are on the ball, the bond market is a treacherous place to buy and sell. Want to know how much a stock you own is worth? A few mouse clicks gives you a price that's at most 15 minutes old. With the average spread on S&P 500 constituents now 0.06 cents per $1 of its total value, even investors who fail to pay close attention are unlikely to get ripped off too badly.

Muni and corporate bonds, by contrast, still trade in the modern-day equivalent of smoky back rooms. There is no requirement that trades take place on an exchange. For munis there simply is no exchange; everything is over the counter. The New York Stock Exchange does list corporate bonds but accounts for only a small share of corporate bond trading. If you want a good price buying or selling a corporate or a muni bond, you generally have no better way to do it than calling different brokers where you already have accounts and going for the best deal.

Boyce's experience with Wachovia is a prime example of how these conditions can conspire against the little guy. He figured his brokerage agreement allowed Wachovia to earn $2,625 (0.5% of the $525,000 value of his bond purchase) for acquiring at par his Salisbury munis, with a double-tax-free coupon of 5.6% and a 2028 maturity. Boyce says his broker told him Wachovia bought the Salisbury bonds at their $5,000 par price. To double-check he went to the Financial Industry Regulatory Authority's online bond trade database. The site does not include the names of parties involved, but it does disclose the time, date, quantity and purchase prices of muni and corporate bond trades.

The database showed that on the day Boyce purchased his Salisbury munis, an undisclosed dealer bought 136 such bonds for $4,930 apiece. Forty minutes later it sold 105 of them to one customer (presumably Boyce) and the remaining 31 to another--all for $5,000 each. If it was in fact Wachovia that did the buying and selling, its take on Boyce's purchase was not $2,625, or 0.5%, but $9,975, or 1.9%.

When Boyce pressed Wachovia for details of the trade, the firm acknowledged it had bought at 98.6% of par value, equivalent to the same $4,930 Boyce had seen on the Finra tape. Wachovia offered to waive its commission but not to rebate its $7,350 markup. Unsatisfied, Boyce sued.

"There's always a bit of arbitrage," says Marilyn Cohen of Envision Capital Management and a FORBES fixed-income columnist. "A lot of people don't realize how much [price] gaming there is."

You can also run into problems when you're on the sell side. Vanguard Group, better known for mutual funds than for brokerage, says it always puts muni bond orders up for bidding on a national network. Fidelity routes sell orders to its own trading desk, unless the customer specifically requests national bids. Charles Schwab customers will need to ask for themselves about its policy; the firm declined to discuss it with FORBES.

Fortunately for small investors, visibility of bond prices has improved dramatically in recent years. Three Web sites relay pricing data to the public almost instantaneously, at no charge. The most user-friendly of the bunch is Emma.msrb.org, run by the Municipal Securities Rulemaking Board. Emma tracks 1.5 million different bonds and an average of 47,000 trades a day. Alas, no data on trades of corporates on Emma. But InvestingInBonds.com, managed by the Securities Industry and Financial Markets Association, and Finra's site, both offer real-time corporate as well as muni trades.

(Surprisingly, up-to-the-minute trading data for corporates and munis are easier to find for free on-line than are similar data for Treasurys. InvestingInBonds.com and Finra's site post only end-of-day prices on Treasurys. Bloomberg.com posts 15-minute-delayed prices on a range of maturities. Nevertheless, it's easier for the small investor to get a fair deal when purchasing Treasurys. For more on buying them, see the box above.)

References


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