What is sec Rule 15c2 12?
What is sec Rule 15c2 12?
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?
Continuing disclosure consists of important information about municipal bonds that arises after the initial issuance. By looking at continuing disclosures, investors can compare annual financial information about a particular bond from year to year, or between two similar securities.
When must underwriters provide the final official statement to the MSRB?
seven days
State and local governments usually do not complete preparation of the official statement until after the first trading day of the security and generally are under contract to provide the official statement for a new municipal security to the underwriter within seven days of the date.
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.
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 a sophisticated municipal market professional?
For purposes of this notice, the term “sophisticated municipal market professional” or “SMMP” shall mean an institutional customer of a dealer that: (1) the dealer has a reasonable basis to believe is capable of evaluating investment risks and market value independently, both in general and with regard to particular …
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 are disclosure requirements for new issue of municipal securities?
Issuers must disclose any 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. A failure to comply with the undertaking would be a breach of contract.
What is the retail order period?
A retail order period is a period of time before the formal bond pricing with institutional investors when the issuer accepts bond orders only from retail investors.
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.
Why are municipal fund securities exempt from the Investment Company Act?
Because it is issued by a state or local government, it is exempt from the rules of the Investment Company Act of 1940. Municipal fund securities are also exempt from federal taxes, often state and local taxes as well. Historical Background. The term “municipal fund securities” did not exist until recently.
Which of the following must be disclosed in negotiated municipal underwritings?
The best answer is B. In negotiated municipal underwritings, the spread and offering price of each maturity must be disclosed. There is no requirement to disclose the names of the underwriters, nor their participation amounts.
When does SEC Rule 15c2-12 go into effect?
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 are the SEC requirements for continuing disclosure?
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 are the exemptions from Rule 15c2-12?
What are the exemptions from Rule 15c2-12? When any one of the following exemptions to Rule 15c2-12 applies, there is no requirement for an official statement or a continuing disclosure agreement. • The aggregate principal amount of the issue is less than $1,000,000. • The authorized denominations are at least
What does it mean to have a continuing disclosure agreement?
2 The issuers’ agreement to make such disclosures is memorialized in a written undertaking frequently called a Continuing Disclosure Agreement. The Continuing Disclosure Agreement requires that issuer to file annual financial information and notices of certain material events with the Electronic Municipal Market Access, or EMMA]
