The Municipal Securities Rulemaking Board (MSRB) recently published the agenda for the January 27-28, 2016 meeting of its Board of Directors. Among the items noted for discussion is the following:
The Board will discuss direct purchases of municipal securities by financial institutions and bank loans to municipal entities to consider whether the MSRB should engage in further activities related to disclosure of material information.
In a press release accompanying the agenda, the MSRB stated that the purpose for the inclusion of this discussion item is to “explore possible regulatory action in this area to promote disclosures about bank loans affecting the overall indebtedness of an issuer.”
Currently, information about bank loans is not required to be posted on EMMA, the MSRB’s online repository for municipal securities data. While the MSRB has encouraged municipalities to voluntarily report data on bank loans, few municipalities have chosen to do so, as voluntarily reporting such information brings with it a number of risks to the municipality (a topic we have discussed in the past).
Municipalities should continue to pay close attention to this issue, and await further information as to what the MSRB intends to do with respect to the reporting of bank loans.