MSRB disclose credit

 

Thursday, Apr 16,2009, 2:23:15 PM   Click:

Copyright: U. S. News Corp.
Source: U. S. Newswire
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Contact: Jennifer A. Galloway, Chief Communications Officer, City Council securities regulatory authorities (MSRB), +1-703-797-6600, jgalloway@msrb.org

ALEXANDRIA, Virginia, April 15 / PRNewswire / - The city council of securities regulators (MSRB) supports greater accessibility to all credit ratings for municipal bonds. The MSRB recognizes that the Securities and Exchange Commission (SEC) is examining the regulation of credit rating agencies with respect to transparency and conflicts of interest in bond ratings. The MSRB has previously stated its support the SEC aims to improve transparency in the process of credit rating. The MSRB believes retail investors to benefit from clearer articulation of the considerations used in the rating process, greater transparency in this process, and disclosure or eliminate potential conflicts of interest.

The MSRB commends SEC Chairman Mary Schapiro credit ratings to make a priority, and today for the SEC rating agencies round table on the supervision of credit rating agencies.

The municipal bond market is dominated by retail investors and credit ratings are an important indicator of credit quality. Investors must have access to all the ratings to determine adequately to certain risks related to municipal security. However, it is important for investors to realize that the opinions one tool to evaluate the safety and can not replace the separate investment analysis.

The MSRB believes that the recent bond insurer and bank liquidity declines have made access to the underlying and strengthening credit rating even more important for municipal investors. "Access to all credit ratings is of vital importance to investors given the recent decline in bond insurer and bank liquidity rating," said Ronald A. Stack, president of the MSRB. "We applaud the SEC for the convening of the panel today and we welcome progressive discussions on these issues that will benefit investors. We also support the improvement of disclosure of credit ratings municipal bonds because knowledge of all the notes is a key element of investor protection. "


The MSRB plans to make credit ratings more easily available, including disclosure to investors on the MSRB Electronic Municipal Market Access (emma.msrb.org) system.

The MSRB has previously noted that the underlying rating (or lack) of May in an operation, especially when the credit rating of the bond insurer is downgraded or is the subject of the information of Agency rating opinions on a possible action. An underlying credit rating is assigned to reflect the credit quality of a problem independent credit obligations such as insurance. To ensure that all necessary information is made pursuant to MSRB Rule G-17, the MSRB noted that the dealer must take into account information on credit ratings is available in the industry sources created (or other information to the seller) and must include this information in determining the elements to disclose about the transaction.

The municipal council of securities regulators (MSRB) was established in 1975 by Congress to develop rules regulating securities firms and banks involved in underwriting, trading and selling municipal securities. The Board also operates information systems, including the municipalities of access to electronic markets (EMMA) system, designed to promote transparency and access to information. The MSRB also conducts extensive outreach and education. The Council is composed of members of municipal securities and the public, and is responsible for protecting investors and promoting a fair and efficient marketplace. The Council is a self-regulatory organization that is subject to supervision by the Securities and Exchange Commission. SOURCE Municipal Securities Rulemaking Board (MSRB)