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SEC Lawyer

SEC Lawyer

The Securities and Exchange Commission today voted to propose rule amendments to improve investor protection and enhance transparency in the municipal securities market. If you are an issuer, or need to get your stock or company registered, call a great SEC Lawyer today.

SEC PROPOSES RULE AMENDMENTS TO IMPROVE MUNICIPAL SECURITIES DISCLOSURES

Rule 15c2-12 under the Securities Exchange Act of 1934 requires brokers, dealers, and municipal securities dealers that are acting as underwriters in primary offerings of municipal securities subject to the Rule, to reasonably determine, among other things, that the issuer or obligated person has agreed to provide to the Municipal Securities Rulemaking Board (MSRB) timely notice of certain events.  The amendments proposed by the SEC today would add two new event notices:

  • Incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material; and
  • Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties.

“Today the SEC took steps to empower investors by improving their access to current information about the financial obligations incurred by municipal issuers and conduit borrowers,” said SEC Acting Chairman Michael S. Piwowar.

These proposed amendments would provide timely access to important information regarding certain financial obligations incurred by issuers and obligated persons that could impact such entities’ liquidity and overall creditworthiness.

The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register.

FACT SHEET (SEC Open Meeting)

Action

The Commission will consider whether to propose amendments designed to better inform investors and other market participants about the current financial condition of issuers of municipal securities and obligated persons.  Specifically, the proposed amendments would facilitate timely access to important information regarding certain financial obligations incurred by issuers and obligated persons, which could impact an issuer’s or obligated person’s liquidity and overall creditworthiness and create risks for existing security holders.

Highlights

The proposed amendments to Exchange Act Rule 15c2-12 would amend the list of event notices that a broker, dealer, or municipal securities dealer acting as an underwriter in a primary offering of municipal securities subject to the Rule must reasonably determine that an issuer or obligated person has undertaken, in a written agreement for the benefit of holders of municipal securities, to provide to the Municipal Securities Rulemaking Board within ten business days of the event’s occurrence.

Specifically, the proposed amendments would add two new events to the list included in the Rule:

  • Incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material and
  • Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties

The proposed amendments also would set forth a definition for the term “financial obligation.”

Background

Adopted in 1989, Rule 15c2-12 is designed to address fraud and manipulation in the municipal securities market by prohibiting the underwriting of municipal securities and subsequent recommendation of those municipal securities by brokers, dealers, and municipal securities dealers for which adequate information is not available.

What’s Next

The Commission will seek public comment on the proposed amendments to Rule 15c2-12 for 60 days following publication in the Federal Register.

SEC VOTES TO SEEK PUBLIC INPUT ON POSSIBLE CHANGE TO INDUSTRY GUIDE 3

The Securities and Exchange Commission today voted to publish a request for public comment on disclosures called for by Industry Guide 3 – Statistical Disclosure by Bank Holding Companies.

Specifically, the Commission is soliciting public input on whether Guide 3 continues to elicit the information that investors need for informed investment and voting decisions.  The Commission also seeks comment on whether there are new types of disclosures about the activities of bank holding companies that investors would find important.

“As an agency designed to serve the American people, it is imperative to constantly look back on the SEC’s rules and engage the public on ways to improve,” said SEC Acting Chairman Michael Piwowar. “Today, we are asking for public comment on whether Industry Guide 3 continues to elicit the information that investors need for informed investment and voting decisions.”

The request for comment will be published on the SEC website and in the Federal Register.  The comment period will remain open for 60 days.

FACT SHEET (SEC Open Meeting) 

Highlights

The request for comment seeks public input on statistical and other disclosures provided by bank holding company registrants.  Among other things, the request for comment covers:

  • Existing disclosure guidance for bank holding companies called for by Guide 3, as well as other sources of disclosure for bank holding companies and other registrants in the financial services industry
  • Potential improvements to the disclosure regime, which could include new disclosures, the elimination of duplicative or overlapping disclosures, or revisions to current disclosures
  • The scope and applicability of Guide 3
  • The effects of regulation on bank holding companies, including with regard to their operations, capital structures, dividend policies and treatment in bankruptcy

For each of these topics, the request for comment presents specific questions for public comment.

Background

Industry Guide 3 was first published in 1976 as a convenient reference to the statistical disclosures sought by the staff of the Division of Corporation Finance in registration statement and other disclosure documents filed by bank holding companies.  The financial services industry is dynamic and has changed dramatically since Guide 3 was first published.  Consequently, our disclosure guidance may not in all cases reflect recent industry developments or changes in accounting standards related to financial and other reporting requirements.

Free Consultation with SEC Lawyer

When you need an SEC lawyer, call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506