Securities and Exchange Commission (“SEC”) Rule 15c2-12 under the Securities Exchange Act of 1934 sets forth certain obligations of underwriters to receive, review and disseminate official statements prepared by issuers of most primary offerings of municipal securities such as municipal bonds, underwriters to obtain continuing disclosure agreements from issuers and other obligated persons to provide material event disclosures and annual financial information on a continuing basis, and broker-dealers to have access to such continuing disclosure in order to make recommendations of municipal securities in the secondary market.
Although Rule 15c2-12 does not explicitly regulate issuers such as municipalities directly, it is in their best interest to comply with the obligations set forth by the Rule in order to allow underwriters and broker-dealers to offer/purchase their municipal bonds in the primary and secondary markets. Rule 15c2-12 expressly regulates underwriters and broker-dealers. It is therefore in their best interest to keep track of the various requirements by issuers.
However, keeping track of the various regulatory requirements and required information associated with individual ones of the various requirements can be difficult. Different municipal bonds may have different requirements, timelines, and intervals for which disclosures are to be made. Furthermore, keeping track of material events as they occur can also be difficult. The problem may be exacerbated because information may be spread across different third party databases such as Nationally Recognized Municipal Securities Information Repositories (“NRMSIRs”), State Information Repositories (“SIRs”), which collectively include Municipal Data Repositories (“MDRs”), and others.