WASHINGTON - The Public Securities Association supports states setting up their own bond repositories as long as they are linked to a national data bank, the PSA told New York State officials.
"When it comes to the subject of repositories, the PSA would prefer one-stop shopping," George Brakatselos, a PSA vice president, said at a hearing held Monday by New York State Comptroller H. Carl McCall, who is considering establishing a nationally recognized municipal securities information repository to house primary and secondary market disclosure documents.
Other states are considering similar moves, but New York is believed to be the first state to hold public hearings on the issue.
"If states and other entities desire to develop their own repositories, it is of utmost importance that these repositories be linked with a centralized repository," Brakatselos said. "These linkages should be state of the art and cost-efficient," he said.
The Securities and Exchange Commission proposed rules in March that bar dealers from underwriting a new issue unless the municipality has agreed to file ongoing information with a recognized repository.
Currently, there are three such repositories - at The Bond Buyer, J.J. Kenny Co., and Bloomberg Financial Markets - that accept official statements and event notices from issuers and make them available to investors and other market participants.
But the SEC's proposed rule envisions one or more nationally recognized repositories that can distribute a broader array of information than the data banks currently provide, including annual financial reports. And repositories would need to disseminate information electronically and via hard-copy delivery using facsimile machines, the mail, and messenger services.
The SEC has said that state-based repositories must accept information from all issuers within their own boundaries and disseminate it to anyone requesting it nationally. They would not be permitted to accept documents from issuers in any other states.
The agency asked in March for comment on whether state-based repositories are effective and whether a significant number of states are willing to put out the dollars to create a state-based system.
Brakatselos appeared at the hearing with representatives of 17 other industry organizations, including dealers, issuers, rating agencies, and bond counsel.
The idea of a New York state repository won kudos from the National Association of State Auditors, Comptrollers and Treasurers, which has been pushing for a national system of state-based repositories for at least two years. The group is scheduled to release a report on the issue next month.
