MSRB proposes transparency system for auction-rate securities, VRDOs to SEC

By Sheri Kasprzak

New York, Nov. 18 - The Municipal Securities Rulemaking Board said Tuesday it has filed with the Securities and Exchange Commission for a rule change that would establish a transparency system for municipal auction-rate securities and variable-rate demand obligations.

The rule change, said an MSRB statement, would provide for the collection and dissemination of ARS and VRDO interest rate and descriptive information.

"The proposed rule change would implement an electronic system that would collect and disseminate information about variable-rate securities, provide free public access to information disseminated from the Short-Term Obligation Rate Transparency system through the MSRB's Electronic Municipal Market Access system and amend Rule G-34, on CUSIP numbers and new issue requirements, to require brokers, dealers and municipal securities dealers to report, or ensure the reporting of, interest rate and descriptive information to the SHORT system about ARS and VRDO following an ARS auction or VRDO interest rate reset," MSRB said.

MSRB proposed a Jan. 30 effective date for the change.

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