Timely and complete disclosure of information is an important obligation of municipal bond issuers. Federal securities laws prohibit issuers from making false or misleading statements or omissions of material information in connection with the purchase or sale of securities. Information that is considered material is generally considered information that an investor would want to know prior to participating in securities transactions of the issuer. In response to recent Securities and Exchange Commission (SEC) cases against municipal issuers, the National Association of Bond Lawyers (NABL) released a paper on August 20, 2015 titled “Crafting Disclosure Policies”.
We thought you would find this information helpful.
The paper provides tools to issuers in developing written disclosure policies and procedures and other considerations that go into drafting these policies. When drafting comprehensive disclosure policy, NABL recommends issuers first determine which documents and other information is likely to be deemed as material information. Examples include: offering documents (i.e. Official Statements); annual continuing disclosure filings including financial statements and information; information contained on an issuer’s website or newsletter and other information including press releases, speeches and interviews. Also included in the policy are details regarding proper training of employees and review of the documents included in the policy by senior officials or outside consultant.
In addition to the information provided in the paper, NABL has gathered examples of disclosure policies.
We hope you find this paper useful and informative.
Robert P. Vail
Senior Vice President and Managing Director of Public Finance
Bernardi Securities, Inc.
September 10, 2015