Specifically, SEC Rule 15c2-12 requires that underwriters of municipal securities, before bidding, purchasing, or selling a municipal security in the primary market, must obtain and review the issuer’s preliminary and final official statements and reasonably determine that the issuer has committed to provide continuing …
What is a continuing disclosure agreement?
Continuing disclosure consists of important information about municipal bonds that arises after the initial issuance. Continuing disclosures are intended to assist investors in determining the suitability of a bond, as well as potential risks associated with the credit of the state or local government.
When must underwriters provide the final official statement to the MSRB?
Underwriters must submit the official statement to the MSRB within one business day of receipt of the official statement from the issuer, but by no later than the closing date for the offering.
What is a primary offering of municipal securities?
(7) The term primary offering means an offering of municipal securities directly or indirectly by or on behalf of an issuer of such securities, including any remarketing of municipal securities.
What is an obligated person?
More Definitions of Obligated Person Obligated Person means Borrower or any other Person now or hereafter liable for repayment of any or all of the Obligations, whether by guaranty or otherwise.
Can underwriter Post official statement before time of purchase?
continued) they “purchase or sell” municipal securities, Rule 15c2-12(b)(1) requires Participating Underwriters to obtain and review an official statement deemed final by the issuer (“DFOS”) prior to the time they “bid for, purchase, offer, or sell” securities.
Which of the following entities enforce MSRB rules for bank dealers?
The enforcement agencies for the MSRB are: Office of the Comptroller of Currency, Federal Deposit Insurance Corporation, and the Federal Reserve Board for bank dealers that are not registered with FINRA and the SEC and thus are only subject to inspection by the bank regulators; and the SEC and FINRA for broker-dealers.
What is OTC Pink Current?
The OTC Pink, now branded as the Pink Open Market, is the lowest and most speculative tier of the three marketplaces for the trading of over-the-counter (OTC) stocks. This marketplace offers to trade in a wide range of equities through any broker and includes companies in default or financial distress.
What is SEC Rule 15c?
Rule 15c2-11 applies primarily to broker-dealers that provide quotations for securities that trade on the over-the-counter (OTC) market. It also alters certain other compliance requirements and exceptions that apply to broker-dealer quotations of OTC-traded securities.
What is the retail order period?
During a retail order period, orders are typically only solicited from retail investors. Sometimes orders may be solicited from both retail and institutional investors, although orders from retail investors generally will be given priority in the municipal bond allocation process.
What are municipal advisory services?
A municipal advisor’s primary role is to provide services relating to the structure and sale of securities and to ultimately assist issuers in obtaining the lowest financing cost.
What is a continuing disclosure agreement or undertaking?
The U.S. Securities and Exchange Commission’s (the “SEC”) Rule 15c2-12 (the “Rule”) requires an underwriter in a primary offering of certain municipal securities to reasonably determine that an issuer or obligated person (as such terms are defined in the Rule) has entered into a continuing disclosure agreement or undertaking.
What does the SEC’s new guidance on continuing disclosure look like?
In its interpretive guidance, the SEC reiterated its view that an issuer’s description of its obligation to provide continuing disclosure is a key representation in an official statement, and that an underwriter must have a reasonable basis to believe the issuer will comply with its continuing disclosure obligations.
What does SEC Rule 15c2-12 mean for municipal underwriting firms?
The recent amendments to SEC Rule 15c2-12 (the “ Rule ”), which must be incorporated into continuing disclosure undertakings effective on or after February 27, 2019, have caused municipal underwriting firms to review existing due diligence processes and procedures.
What is Rule 15c2-12 and why does it matter?
Indeed, this provision of Rule 15c2-12 was specifically intended to serve as an incentive for issuers to comply with their undertakings to provide disclosures in the secondary market for municipal securities, and also assists underwriters and others in assessing the reliability of the issuer’s disclosure representations.
