WASHINGTON -- A rule requiring underwriters to send advance refunding documents to the Municipal Securities Rulemaking Board went into effect Saturday.
The board's Rule G-36 requires underwriters of deals subject to the Securities and Exchange Commission's official statement distribution rule, 15c2-12, to send two copies of the refunding escrow agreement to the board within five business days of the issue's closing. The rule is in effect for advance refundings that closed July 13 and after.
Rule 15c2-12 covers deals of $1 million or more, but it exempts offerings made to a limited number of sophisticated investors or offerings of securities with short maturities.
For issues under $1 million, underwriters must send the escrow agreement only if a final official statement is prepared for the refunding issue.
In addition, by Sept. 13, underwriters must provide two copies of advance refunding documents for refunding issues underwritten since Jan. 1, 1990. A similar "look-back" provision was included in G-36 for sending official statements to the board.
Official statements and advance refunding documents sent to the MSRB under G-36 are being made available in paper form in the board's public access facility. They also will be made available in paper form or on magnetic disk through the board's electronic library, the Municipal Securities Information Library, which the MSRB hopes to have in operation in late 1991 or early 1992.
The board first proposed having underwriters send advance refunding documents to the library in August 1989, when it called not only for escrow agreements but notices of defeasance. It went one step further in November 1989 by calling also for copies of the trust indentures for refunded issues.
But commenters warned sending anything other than the escrow agreement was duplicative and involved too much paper.
The board filed a final rule with the SEC in June 1990, calling only for escrow agreements. It said, however, that it reserves the right to review the issue at a later time.