WASHINGTON - A broad-based industry panel Friday urged states to establish central information offices to improve the collection of secondary market disclosure information and to appoint a national advisory board to help them with that task.
The Blue Ribbon Committee on Secondary Market Disclosure was established by the National Association of State Auditors, Comptrollers, and Treasurers in November 1992 in the wake of mounting pressure by regulators for improved secondary market disclosure in the municipal market.
NASACT members are scheduled to vote Tuesday on whether to approve the recommendations at the association's annual meeting to be held Aug. 22-24 in Baltimore.
The 24-member advisory panel that prepared the report is chaired by Harvey Eckert, deputy secretary for comptroller operations in Pennsylvania, and includes officials of state and local governments, rating agencies, underwriters, financial advisers, analysts, credit enhancers, bond counsel, major buyers, and bond issuers.
The state finance officers association created the blue ribbon panel last year after it found in a preliminary report that states already collect extensive ongoing information about the bonds they issue. But the data is not assembled in a central place and often is not complete or timely, NASACT found.
The report urges states to adopt legislation that would set up central repositories of ongoing information within their borders. NASACT could establish a national board to help states collect the information and make it accessible to investors, the panel said.
The association also could publish a directory of continuing disclosure information for all states that would include the type of information being collected, the agency collecting it, and the telephone number of a contact person, the panel said.
The report comes as the House securities committee has tentatively scheduled the first in a series of hearings Sept. 9 on the need for tougher regulation in the municipal market.
Officials from the Securities and Exchange Commission, Municipal Securities Rulemaking Board, and National Association of Securities Dealers are expected to issue recommendations on whether new standards are needed, including legislation or regulations to heighten secondary market disclosure.
The MSRB launched its 18-month Continuing Disclosure Information Pilot on Jan. 21 for use by bond trustees. The system was expanded to issuers in April. But participation has been very light, and regulators have signaled that they are eyeing new standards that would require issuers to supply ongoing disclosure.
A NASACT official said late last year that the association's efforts to broaden states' collection activities are not intended to upstage the MSRB's "CDI" system.