Bloomberg
A Bid to Shame Muni-Disclosure Derelicts Draws Industry’s Fire
Her group is among those that have since weighed in on the proposal by submitting comments to the SEC, which has the final say on the MSRB’s rules. Among them is the National Federation of Municipal Analysts, a bond-analyst group that generally welcomes more information.
Yet the group said the MSRB’s timer could be misleading, inaccurate or error-prone enough to do more harm than good. For example, they said the clock could be triggered by a filing that’s not the audited financial statement, potentially making tardy filers look better than speedy ones. “It will be comparing apples to oranges,” said Lisa Washburn, a Municipal Market Analytics managing director who works with the analysts group.
There’s also the possibility a government that has neglected its duty for years could simply reset the clock when it files documents ahead of a new bond sale, leaving would-be buyers unaware that it has a history of not keeping them up to date about the state of its finances. Moreover, there’s no universal deadline in the disclosure agreements governments sign, so a day count wouldn’t necessarily let an investor know if they’re not living up to their promises.