Currently, there are 14 different events for which notices must be filed pursuant to Rule 15c2-12, which include events such as rating changes or events affecting the tax-exempt status of the security. The purpose of these notices is to provide certain information to investors. These event notices are part of the continuing disclosure obligations Rule 15c2-12 stipulates underwriters of municipal securities must ensure the issuer or obligated person will fulfill. In addition to the event notices, the rule includes other requirements, such as the filing of annual financial information. This continuing disclosure information is provided to the Municipal Securities Rulemaking Board (MSRB) on an ongoing basis and made accessible to investors through its Electronic Municipal Market Access website.
As of February 27, notices will be required for two new events:
- The incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material; and
- A default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties.
As with the current list of events, notice of these two new events must be provided to the MSRB within 10 days of the event’s occurrence.
