WASHINGTON -- Bloomberg Financial Markets yesterday became the third private information vendor to announce it will accept secondary-market disclosure information now that the Municipal Securities Rulemaking Board's proposed continuing disclosure system is in limbo.
"Bloomberg is ready to act as a secondary-market repository immediately," said Kenneth Wagner, municipal analyst for Bloomberg. "We'll accept information via facsimile machine or mail and, if demand warrants an electronic application, that can be addressed eventually."
Last week, following the SEC's decision to defer a vote on the board's proposed Continuing Disclosure Information/Electronic Submission system, J.J. Kenny Co. and The Bond Buyer said they were ready to accept disclosure by bond trustees and issuers.
J.J. Kenny had already jumped ahead of the pack last summer with the announcement of its Kenny-Alert system, which delivers condensed versions of secondary-market information on-line and free of charge to subscribers of The Blue List over Telerate, the Kenny Drake Screen, and the KENNYWIRE.
David Francescani, general counsel for J.J. Kenny, reiterated after the SEC's June 6 vote that the firm is "absolutely ready" to take in secondary-market disclosure information immediately. Since its inception, he said, the system has received and disseminated electronically about 45 notices, half from bond trustees and half from issuers.
William McLaughlin, a spokesman for The Bond Buyer, also said last week that the company is "ready, willing, and able" to accept trustee disclosure. Spokesmen for both The Bond Buyer and Bloomberg said their firms had not stepped into the ring until now because they wanted to see if the board's CDI/ES would be approved.
But since the SEC has asked the MSRB to repropose a system that can accept information both on paper and electronically--a step that is months away if the MSRB chooses to take it -- the two firms say they will provide secondary-market services now.
Bloomberg, Kenny, and The Bond Buyer have all been named by the SEC as nationally recognized municipal securities information libraries. Dealers that submit official statements to the so-called NRMSIRs when deals close only have to supply copies to investors for 25 days. Those that do not submit to one or more NRMSIRs have to supply up-to-date official statements for 90 days.
Mr. Wagner of Bloomberg said the firm will disseminate trustee notices and other disclosures through the Bloomberg network. He said the company will follow the same principals in releasing secondary-market information as it does in releasing official statements. NRMSIRs can place no limits on whom they accept official statements from. They must make documents available to anyone able to pay for them and they must charge reasonable fees.
Meanwhile, a spokesman for the American Bankers Association's corporate trust committee said there will be no major changes in the panel's draft guidelines for secondary-market disclosure by bond trustees, following last week's corporate trust conference in Reston, Va. The panel held three workshops on the guidelines to get feedbank from trustees.
Jeffrey Powell, vice president of the First National Bank of Chicago and a principal drafter of the standards, said a final draft with some changes in the commentary and introduction to the guidelines will be out by the end of June, comments will be due at the end of July, and the group hopes to have final standards to the industry by Sept. 1.
The revised guidelines are expected to address a concern raised by the Government Finance Officers Association in comments filed May 17 on the trustees' disclosure guidelines. Section 2 of the draft guidelines spells out what notices and periodic reports issuers pledge to release over the life of the bonds.
In his comments, GFOA research chief John Petersen warned that generally a failure by an issuer to abide by a condition of the indenture can lead to a default. He wanted to know whether failure of the issuer to supply information detailed in Section 2 would constitute a default or whether separate remedies should be attached to the section.