EXTENSION OF CDI SYSTEM

Volume 16, Number JANUARY 1996

NOTICE OF FILING

EXTENSION OF CDI SYSTEM

Route To: Manager, Muni Department Underwriting Trading Public Finance Compliance

Request for Extension Filed The Board has filed to request an extension of its interim CDI system.

Questions about the filing may be directed to Marianne I. Dunaitis, Assistant General Counsel, or Thomas A. Hutton, Director of MSIL.

On November 28, 1995, the Board filed with the Securities and Exchange Commission (Commission) to request an extension, from December 31, 1995, through September 30, 1996, of its interim Continuing Disclosure Information (CDI) System of the Municipal Securities Information Library(R) (MSIL(R)) system.¹ The CDI System accepts and electronically disseminates submissions of official disclosure notices relating to outstanding issues of municipal securities, i.e., continuing disclosure information.

BACKGROUND

On November 10, 1994, the Commission approved amendments to its Rule 15c2-12 which prohibit dealers from underwriting issues of municipal securities unless the issuer commits, among other things, to provide notice of material events to the Board's CDI System or to all Nationally Recognized Municipal Securities Information Repositories (NRMSIRs) and to the applicable state information depository.² In addition, the Rule prohibits dealers from recommending municipal securities without having a system in place to receive material events notices.³

In July 1995, the Board made certain changes to the CDI System consistent with the new Commission requirements. These changes were interim changes to the System to allow it to accept and disseminate material event notices received after the July 3, 1995, effective date of the amendments to Rule 15c2-12. A permanent System designed to process more and longer submissions is currently under development and is expected to be ready for operation by September 1996.⁴

The Board is requesting an extension from the Commission for the interim system through September 30, 1996, to gain additional experience with the new disclosure scheme while the permanent system is being designed. The amendments to SEC Rule 15c2-12 regarding material event notices were effective in July 1995, and will not be fully effective until January 1, 1996. Issuers and their agents are still in the process of adjusting to the amendments. In addition, the current volume of material event notices has been within the capacity of the interim system. Additional experience will allow the Board to design the permanent system to accommodate better the expected volume and length of material event notices.

November 28, 1995

ENDNOTES

[1] File No. SR-MSRB-95-19. Comments submitted to the Commission should refer to this file number. The Municipal Securities Information Library and MSIL are registered trademarks of the Board. The MSIL(R) system, which was approved in Securities Exchange Act Release No. 29298 (June 13, 1991), is a central facility through which information about municipal securities is collected, stored and disseminated.

[2] Sec. Exch. Act Rel. No. 34961 (Nov. 10, 1994). This provision of the rule became effective on July 3, 1995.

[3] The effective date of this provision of the Rule is January 1, 1996.

[4] For the interm System, the price remains $16,000 for an annual subscription. The price for the permanent System will be reviewed for any appropriate adjustment.

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