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National Federation of Municipal Analysts May 5 - 8, 2009 Seattle, Washington

Municipal Securities Rulemaking Board EMMA – Electronic Municipal Market Access: Real-Time Disclosure in the Municipal Securities Market. National Federation of Municipal Analysts May 5 - 8, 2009 Seattle, Washington Lynnette Hotchkiss, Executive Director. MSRB in a Nutshell.

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National Federation of Municipal Analysts May 5 - 8, 2009 Seattle, Washington

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  1. Municipal Securities Rulemaking BoardEMMA – Electronic Municipal Market Access:Real-Time Disclosurein the Municipal Securities Market National Federation of Municipal Analysts May 5 - 8, 2009 Seattle, Washington Lynnette Hotchkiss, Executive Director

  2. MSRB in a Nutshell Self Regulatory Organization for broker-dealers and bank dealers in the municipal market no rulemaking authority over issuers, intermediaries or other market participants no non-securities rulemaking authority MSRB coordinates with SEC, FINRA, bank regulators on enforcement Coordinating efforts with IRS, Treasury, others on market issues Congressionally mandated mission: protect investors and the public interest promote fair and efficient municipal bond market MSRB furthers mission through rulemaking, information services/systems, outreach andeducation and market leadership

  3. MSRB’s Recent Investor Protection and Fair Practice Initiatives auction rate securities – MSRB Notice 2008-09 (Feb 19, 2008) Focus on customer protection obligations – fair dealing, disclosure of material facts, suitability of recommendations bond insurer downgrades – MSRB Notice 2008-04 (Jan 22, 2008) Focus on customer protection obligations – fair dealing, disclosure of material facts, suitability of recommendations, fair pricing bank tying arrangements – MSRB Notice 2008-34 (Aug 14, 2008) Focus on promoting compliance with federal banking laws when structuring transactions with liquidity facilities political contributions – MSRB Notice 2008-38 (Sept 11, 2008) Reminder of applicability of political contribution rule when issuer officials run for federal office

  4. MSRB’s Recent Transparency and Market Efficiency Initiatives NIIDS – New Issue Information Dissemination ServiceMSRB requirements effective Sept 30, 2008 Dissemination of key new issue bond data to market through DTCC ♦ Assures rapid and consistent disclosure to the market ♦ Promotes efficient trade processing and reporting ♦ Currently analyzing NIIDs data Auction Rate and VRDO Transparency Collect and disseminate rate resets, related data and key documents for each ARS auction and VRDO remarketing Research and Market Statistics EMMA: Electronic Municipal Market Access System

  5. MSRB Recent Market Leadership Initiatives Resource to Congressional leaders Congressional Committees Individual Senators and Representatives Resource to other Federal and State regulators MSRB Statement for House Financial Services Committee Hearing on “Municipal Bond Turmoil: Impact on Cities, Towns, and States” on March 12, 2008 MSRB Statement for House Financial Services Committee Hearing on “Auction Rate Securities Market: A Review of Problems and Potential Resolutions,” on September 18, 2008 MSRB Testimony for Senate Banking Committee Hearing on “Enhancing Investor Protection and the Regulation of the Securities Markets,” on March 26, 2009

  6. MSRB Recent Market Leadership Initiatives MSRB Statement Regarding Regulation of the Municipal Market on January 9, 2009 Focus attention on unregulated municipal market participants Uses pay-to-play as an example MSRB Letter to Congress with Specific Recommendations on Regulating Financial Intermediaries on February 11, 2009 Focus on regulation of intermediaries Suggests Muni Czar or industry coordinating committee Calls for better coordination of federal and state enforcement activities Muni derivatives to be subject to same regulatory framework developed for other derivative markets Articulates role for market-specific SROs to complement anti-fraud authority of federal securities laws

  7. EMMA: Electronic Municipal Market Accesshttp://www.emma.msrb.org Internet-based portal providing free public access to disclosure documents and real-time trade prices EMMA contains official statements – current & historical from 1990 advance refunding documents – current & historical from 1990 trade prices – real-time & historical from 2005 SHORT – transparency for ARS and VRDOs market statistics Access Equals Delivery (May 2009) secondary market disclosures (July 2009) future enhancements planned

  8. EMMAElectronic Municipal Market Access • EMMA to expand over course of this year to provide: • variable rate securities rate reset & liquidity information – beginning April 2009; expanded to provide copies of LOCs late 2009 • auction rate security rate bidding data & documents – beginning second half of 2009 • market statistics/investor education – expanded coverage throughout the year • enhanced official statement dissemination – real-time posting of OSs, all-electronic dissemination expected late spring 2009 • continuing disclosure – centralized all-electronic system replacing de-centralized NRMSIR system – pilot in late spring 2009, official launch on July 1, 2009

  9. EMMAElectronic Municipal Market Access • Free real-time continuing disclosure access • SEC Rule 15c2-12 amended, as of July 1, 2009, to: • replace NRMSIRs and SIDs with MSRB as central filing venue • provide for submissions to EMMA solely in electronic format • provide for indexing information to accompany all submissions • MSRB’s continuing disclosure service would: • accept submissions for all issues subject to continuing disclosure undertakings, even if issued prior to July 1, 2009 • make available disclosures submitted on & after launch of continuing disclosure service on July 1, 2009

  10. EMMAElectronic Municipal Market Access • Free real-time continuing disclosure access • System highlights: • continuing disclosures submitted to EMMA by issuers, obligated persons & agents, at no cost, through web upload or B2B stream • leverage underwriter OS submissions & market data to organize issues & securities for indexing purposes • free real-time public access to continuing disclosures through EMMA web portal • integrated display of continuing disclosures with OSs and security-specific trade/interest rate data

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  44. Municipal Securities Rulemaking BoardEMMA – Electronic Municipal Market Access:Real-Time Disclosurein the Municipal Securities Market National Federation of Municipal Analysts May 5 - 8, 2009 Seattle, Washington Lynnette Hotchkiss, Executive Director

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