WASHINGTON R.R. Donnelley & Sons Co. is urging the SEC to allow it to play a major role in a secondary market disclosure program that the commission is expected to mandate for the municipal bond market next month.
Donnelley, a large Chicago-based financial and commercial printing company, has proposed serving as an intermediary that would provide "back office support" to help link nationally recognized repositories under whatever disclosure requirements the Securities and Exchange Commission adopts.
The company's proposals are outlined in an SEC staff memorandum about a meeting held with company officials in late August and in written comments Donnelley filed with the SEC last month.
The SEC has proposed disclosure requirements that would bar dealers from purchasing or selling bonds unless the issuer had pledged in Writing to provide financial information and notices of material events to a nationally recognized repository.
The proposed amendments also contain a controversial provision that would prohibit dealers from recommending bonds to investors in the secondary market unless they had reviewed the issuer's financial statements.
Donnelley is proposing to take hard copy or other financial documents from state and local issuers and transform them into something that could be electronically transmitted to nationally recognized municipal securities information repositories, known as NRMSIRs.
Donnelley already provides such filing services for the SEC's Electronic Data Gathering, Analysis, & Retrieval, or Edgar, system, an electronic filing system that 3,400 out of 15,000 SEC registrants currently use to file information with the commission.
In its proposal to the SEC, Donnelley is proposing to help link the nationally recognized repositories so that information filed with any of them would be available from all of them.
"Under the proposed rule, unless the NRMSIRs were linked, every broker and dealer in municipal securities would require computer access to every NRMSIR, and may have to consult with each of those separate services before making a recommendation," Donnelly told the SEC in comments.
"In contrast, a 'back office' linkage among NRMSIRs that assured continuity of information among the repositories and open access to all repositories would avoid these problems," the company said.
Donnelley's proposal is attractive to the National Association of State Auditors, Comptrollers, and Treasurers, which has been pushing for states to create their own repositories for municipal bond information, an association official said yesterday.
