SEC clarifies disclosure policies for muni issuers

09/19/2008 | Bond Buyer (subscription required), The

Even if credit-rating agencies don't notify them of a downgrade, municipal insurers are required to file event notices when bond ratings are downgraded, Securities and Exchange Commission enforcement attorney Mark Zehner said. The reason, Zehner said, is that some investors could profit by selling off the bonds when the rest of the market was unaware of the downgrade. The SEC is hoping to ease the process by implementing a new disclosure system known as EMMA, but SIFMA Managing Director and Associate General Counsel Leslie Norwood noted it could be five years before the system is fully implemented.

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