PRA Supporting Statement for Rule 15c2-12 02042025

SUPPORTING STATEMENT
for the Paperwork Reduction Act Information Collection Submission for
Municipal Securities Disclosure (Exchange Act Rule 15c2-12)
OMB Control Number: 3235-0372
This submission is being made pursuant to the Paperwork Reduction Act of 1995, 44
U.S.C. Section 3501 et seq. (“PRA”).
A.

JUSTIFICATION
1.

Necessity of Information Collection

At the time the securities laws first were enacted, the market for most municipal
securities was largely confined to limited geographic regions. 1 The localized nature of the
market, arguably, allowed investors to be aware of factors affecting the issuer and its securities.
Moreover, municipal securities investors were primarily institutions, which in other instances are
accorded less structured protection under the federal securities laws. 2 Since 1933, however, the
municipal markets have become nationwide in scope and now include a broader range of
investors. 3 At the same time that the investor base for municipal securities has become more
diverse, the structure of municipal financing has become more complex. 4 In the era preceding
the adoption of the Securities Act of 1933, municipal offerings consisted largely of general
obligation bonds. 5 Today, municipal offerings include greater proportions of revenue bonds that
are not backed by the full faith and credit of a governmental entity and which, in many cases,
may pose greater credit risks to investors. 6 In addition, since 2009, municipal issuers and
obligated persons have increasingly used direct purchases of municipal securities 7 and direct
loans as alternatives to public offerings of municipal securities. 8
1

See Municipal Securities Disclosure, Exchange Act Release No. 26100 (September 22,
1988), 53 FR 37778, 37779 (September 28, 1988) (“1988 Proposing Release”), available
at https://www.sec.gov/files/rules/proposed/1988/34-26100.pdf.

2

Id. (citation omitted).

3

Id.

4

Id.

5

Id.

6

Id.

7

For example, an investor purchasing a municipal security directly from an issuer.

8

See, e.g., Amendments to Municipal Securities Disclosure, Exchange Act Release No.
83885 (August 20, 2018), 83 FR 44700, 44731 (August 31, 2018) (“[T]he need for more
timely and informative disclosure of financial obligations is highlighted by market
developments beginning in 2009, which feature the increasing use of direct placements
by issuers and obligated persons as financing alternatives to public offerings of municipal
securities.”).
1

Today there are over $4 trillion of municipal securities outstanding. 9 Trading volume is
also substantial, with over $3.4 trillion total par amount of long and short-term municipal
securities traded in 2023 in approximately 13.1 million transactions. 10 The availability of
accurate information concerning municipal offerings is integral to the efficient operation of the
municipal securities market. 11 In the Commission’s view, a thorough, professional review of
municipal offering documents by underwriters could encourage appropriate disclosure of
foreseeable risks and accurate descriptions of complex put and call features, as well as novel
financing structures now employed in many municipal offerings. In addition, with the increase
in novel or complex financing, there may be greater value in having investors receive disclosure
documents describing fundamental aspects of their investments. Yet, underwriters are unable to
perform this function effectively when disclosure documents are not provided to them on a
timely basis.
History of Exchange Act Rule 15c2-12
For these reasons, in 1989, pursuant to Sections 15(c)(1) and (2) of the Securities
Exchange Act of 1934, the Commission adopted Rule 15c2-12 (the “Rule” or “Rule 15c2-12”), 12
9

Board of Governors of the Federal Reserve System, Financial Accounts of the United
States – Flow of Funds, Balance Sheets, and Integrated Macroeconomic Accounts, at
121, Table L.212 (Second Quarter 2024) (September 12, 2024), available at
https://www.federalreserve.gov/releases/z1/20240912/z1.pdf.

10

Municipal Securities Rulemaking Board 2023 Fact Book (“2023 MSRB Factbook”), at 7
& 8, available at https://www.msrb.org/sites/default/files/2024-02/MSRB-2023-FactBook.pdf.

11

See, e.g., Application of Antifraud Provisions to Public Statements of Issuers and
Obligated Persons of Municipal Securities in the Secondary Market: Staff Legal Bulletin
No. 21 (OMS) (February 7, 2020), available at
https://www.sec.gov/municipal/application-antifraud-provisions-staff-legal-bulletin-21
(stating that “one of the primary purposes of the federal securities laws is to ensure that
the investing public is provided with comprehensive and accurate information about
entities whose securities are publicly traded” and a “lack of consistent disclosure impairs
investors’ ability to acquire information necessary to make informed decisions, and thus,
to protect themselves from fraud”) (internal citations omitted); Remarks of Chairman Jay
Clayton at Municipal Securities Disclosure Conference (December 6, 2018), available at
https://www.sec.gov/news/public-statement/statement-clayton-120618 (“Timely and
accurate financial information is essential for investors and analysts. Without that, it is
challenging to accurately evaluate the current financial condition of a municipal issuer (or
any issuer for that matter).”).

12

Municipal Securities Disclosure, Exchange Act Release No. 26985 (June 28, 1989), 54
FR 28799 (July 10, 1989) (“Rule 15c2-12 Adopting Release”), available at
https://www.sec.gov/files/rules/final/1989/34-26985.pdf. Unless otherwise specified, the
terms “Rule” and “Rule 15c12-2” herein refer to Exchange Act Rule 15c2-12 as adopted
in 1989 and amended in 1994, 2008, 2010, and 2018. See 17 CFR 240.15c2-12. The
various amendments are discussed below.
2

a limited rule designed to prevent fraud by enhancing the timely access of underwriters, public
investors, and other interested persons to municipal offering statements. In the context of the
access to offering statements provided by the Rule, the Commission also reemphasized the
existence and nature of an underwriter’s obligation to have a reasonable basis for its implied
recommendation of any municipal securities that it underwrites. 13
While the availability of primary offering disclosure increased following the adoption of
Rule 15c2-12, there was a continuing concern about the adequacy of disclosure in the secondary
market. To enhance the quality, timing, and dissemination of disclosure in the secondary
municipal securities market, the Commission in 1994 adopted amendments to Rule 15c2-12
(“1994 Amendments”). 14 Among other things, the 1994 Amendments placed certain
requirements on brokers, dealers, and municipal securities dealers (each, a “broker-dealer” or,
when used in connection with primary offerings, a “Participating Underwriter”). Specifically,
under the 1994 Amendments, a Participating Underwriter is prohibited, subject to certain
exemptions, from purchasing or selling municipal securities covered by the Rule in a primary
offering, unless the Participating Underwriter has reasonably determined that an issuer of
municipal securities or an obligated person has undertaken in a written agreement or contract for
the benefit of holders of such securities (“continuing disclosure agreement”) to provide specified
annual information and event notices to certain information repositories. 15 The information to be
provided under Rule 15c2-12 consists of: (1) certain annual financial and operating information
and audited financial statements (“annual filings”); 16 (2) notices of the occurrence of any of
certain specific events (“event notices”); 17 and (3) notices of the failure of an issuer or other
obligated person to make a submission required by a continuing disclosure agreement (“failure to
file notices”). 18 Annual filings, event notices, and failure to file notices may be collectively
referred to as “continuing disclosure documents.”
To further promote the more efficient, effective, and wider availability of municipal
securities information to investors and market participants, on December 5, 2008, the

13

Rule 15c2-12 Adopting Release, 54 FR at 28803 (“As emphasized in the [1988 Proposing
Release], by participating in an offering, an underwriter makes an implied
recommendation about the securities. This recommendation implies that the underwriter
has a reasonable basis for belief in truthfulness and completeness of the key
representations contained in the official statement.”).

14

Municipal Securities Disclosure, Exchange Act Release No. 34961 (November 10, 1994),
59 FR 59590 (November 17, 1994) (“1994 Amendments Adopting Release”), available at
https://www.sec.gov/files/rules/final/adpt6.txt.

15

Id., 59 FR at 59590.

16

17 CFR 240.15c2-12(b)(5)(i)(A)-(B).

17

17 CFR 240.15c2-12(b)(5)(i)(C).

18

17 CFR 240.15c2-12(b)(5)(i)(D).
3

Commission adopted amendments to Rule 15c2-12 (“2008 Amendments”) 19 to provide for a
single centralized repository, the Municipal Securities Rulemaking Board’s (“MSRB”)
Electronic Municipal Market Access (“EMMA”) system, for the electronic collection and
availability of information about outstanding municipal securities in the secondary market. 20
Specifically, the 2008 Amendments require the Participating Underwriter to reasonably
determine that the issuer or obligated person has undertaken in its continuing disclosure
agreement to provide the continuing disclosure documents: (1) solely to the MSRB; and (2) in an
electronic format and accompanied by identifying information, as prescribed by the MSRB. 21
Further amendments to the Rule adopted on May 26, 2010 (“2010 Amendments”) 22: (i)
specified the time period for submission of event notices; (ii) expanded the Rule’s current
categories of events; and (iii) modified an exemption in the Rule used for demand securities. 23
The 2010 Amendments were intended to promptly make available to broker-dealers, institutional
and retail investors, and others important information about significant events relating to
municipal securities and their issuers. 24 The 2010 Amendments help enable investors and other
municipal securities market participants to be better informed about important events that occur
with respect to municipal securities and their issuers, including with respect to demand
securities, and thus allow investors to better protect themselves against fraud. 25 In addition, the
2010 Amendments provide brokers, dealers, and municipal securities dealers with access to
important information about municipal securities that they can use to carry out their obligations
under the securities laws. 26 This information can be used by individual and institutional
investors, underwriters of municipal securities, broker-dealers, analysts, municipal securities
issuers, the MSRB, vendors of information regarding municipal securities, Commission staff,
and the public generally. 27
19

Amendment to Municipal Securities Disclosure, Exchange Act Release No. 59062
(December 5, 2008), 73 FR 76104 (December 15, 2008) (“2008 Amendments Adopting
Release”), available at https://www.sec.gov/files/rules/final/2008/34-59062fr.pdf.

20

Id.

21

Id.

22

Amendments to Municipal Securities Disclosure, Exchange Act Release No. 62184A
(May 26, 2010), 75 FR 33100 (June 10, 2010) (“2010 Amendments Adopting Release”),
available at https://www.sec.gov/files/rules/final/2010/34-62184afr.pdf.

23

Id.

24

Id., 75 FR at 33126.

25

Id., 75 FR at 33123 (“Municipal security holders’ access to meaningful information
promotes informed investment decision-making about whether to buy, sell, or hold
municipal securities and better protection against misrepresentation and fraud.”).

26

Id. (“Availability of that information also will aid brokers, dealers, and municipal
securities dealers in complying with their obligations to have a reasonable basis for
recommending municipal securities.”).

27

Id., 75 FR at 33127.
4

Finally, the Commission adopted amendments to the Rule on August 20, 2018 (“2018
Amendments”) in order to further enhance transparency in the municipal securities market. 28
The amendments revise the list of event notices a broker, dealer, or municipal securities dealer
acting as an underwriter in a primary offering of municipal securities with an aggregate principal
amount of $1,000,000 or more (subject to certain exemptions set forth in the Rule) must
reasonably determine that an issuer or an obligated person has undertaken, in a written
agreement or contract for the benefit of holders of the municipal securities, to provide to the
MSRB.29 The amendments to the Rule became effective on October 30, 2018 with a compliance
date of February 27, 2019. 30
Overview of Rule 15c2-12
Rule 15c2-12(b) 31 requires a Participating Underwriter: (1) to obtain and review an
official statement “deemed final” by an issuer of the securities, except for the omission of
specified information, prior to making a bid, purchase, offer, or sale of municipal securities; 32
(2) in non-competitively bid offerings, to send, upon request, a copy of the most recent
preliminary official statement (if one exists) to potential customers; 33 (3) to contract with the
issuer to receive, within a specified time, sufficient copies of the final official statement to
comply with the Rule’s delivery requirement, and the requirements of the rules of the MSRB; 34
(4) to send, upon request, a copy of the final official statement to potential customers for a
specified period of time; 35 and (5) before purchasing or selling municipal securities in
connection with an offering, to reasonably determine that the issuer or obligated person has
undertaken, in a written agreement or contract, for the benefit of holders of such municipal
securities, to provide continuing disclosure documents to the MSRB in an electronic format as
prescribed by the MSRB. 36
Rule 15c2-12(b)(5)(i) 37 requires Participating Underwriters to reasonably determine, in
connection with an offering, that the issuer or obligated person has undertaken in a continuing
28

Amendments to Municipal Securities Disclosure, Exchange Act Release No. 83885
(August 20, 2018), 83 FR 44700 (August 31, 2018) (“2018 Amendments Adopting
Release”), available at https://www.govinfo.gov/content/pkg/FR-2018-08-31/pdf/201818279.pdf.

29

Id., 83 FR at 44700.

30

Id.

31

17 CFR 240.15c2-12(b).

32

17 CFR 240.15c2-12(b)(1).

33

17 CFR 240.15c2-12(b)(2).

34

17 CFR 240.15c2-12(b)(3).

35

17 CFR 240.15c2-12(b)(4).

36

17 CFR 240.15c2-12(b)(5)(i).

37

17 CFR 240.15c2-12(b)(5)(i).
5

disclosure agreement to provide to the MSRB, in an electronic format prescribed by the MSRB,
the following, described below:
•

Under Rule 15c2-12(b)(5)(i)(A), 38 the annual financial information for the issuer
or obligated person for whom financial information or operating data is presented
in the financial official statement.

•

Under Rule 15c2-12(b)(5)(i)(B), 39 if not submitted as part of the annual financial
information, the audited financial statements for the issuer or obligated person
covered by (b)(5)(i)(A), if and when available.

•

Under Rule 15c2-12(b)(5)(i)(C), 40 in a timely manner not in excess of ten
business days of the occurrence of the event, notice of any of the following events
with respect to the securities being offered in the offering: (1) principal and
interest payment delinquencies; (2) non-payment related defaults, if material; (3)
unscheduled draws on debt service reserves reflecting financial difficulties; (4)
unscheduled draws on credit enhancements reflecting financial difficulties; (5)
substitution of credit or liquidity providers, or their failure to perform; (6) adverse
tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notices of Proposed Issue or other material notices
or determinations with respect to the tax status of the security, or other material
events affecting the tax status of the security; (7) modifications to rights of
security holders, if material; (8) bond calls, if material, and tender offers; (9)
defeasances; (10) release, substitution, or sale of property securing repayment of
securities, if material; (11) rating changes; (12) bankruptcy, insolvency,
receivership or similar event of the issuer or obligated person; (13) the
consummation of a merger, consolidation, or acquisition involving the issuer or
obligated person or the sale of all or substantially all of the assets of the issuer or
obligated person, other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if
material; (14) appointment of a successor or additional trustee or the change of a
name of a trustee, if material; (15) incurrence of a financial obligation of the
issuer or 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 (16)
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.

38

17 CFR 240.15c2-12(b)(5)(i)(A).

39

17 CFR 240.15c2-12(b)(5)(i)(B).

40

17 CFR 240.15c2-12(b)(5)(i)(C).
6

•

Under Rule 15c2-12(b)(5)(i)(D), 41 in a timely manner, notice of a failure of any
person specified in paragraph (b)(5)(i)(A) 42 of the Rule to provide required annual
financial information, on or before the date specified in the written agreement or
contract.

Rule 15c2-12(c) 43 makes it unlawful for a broker-dealer to recommend the purchase or
sale of a municipal security unless the broker-dealer has procedures in place that provide
reasonable assurance that it will receive prompt notice of any event specified in paragraphs
(b)(5)(i)(C), 44 (b)(5)(i)(D), 45 and (d)(2)(ii)(B) 46 of the Rule.
Rule 15c2-12(f) 47 provides the definition of the term “financial obligation.” The term
financial obligation means a (i) debt obligation; (ii) derivative instrument entered into connection
with, or pledged as security or a source of payment for, an existing or planned debt obligation; or
(iii) guarantee of (i) or (ii). 48 The term financial obligation does not include municipal securities
as to which a final official statement has been provided to the MSRB consistent with the Rule. 49
2.

Purpose and Use of Information Collection

Under Rule 15c2-12, 50 the Participating Underwriter is required: (1) to obtain and review
a copy of an official statement deemed final by an issuer of the securities, except for the
omission of specified information; 51 (2) in non-competitively bid offerings, to make available,
upon request, the most recent preliminary official statement, if any; 52 (3) to contract with the
issuer of the securities, or its agent, to receive, within specified time periods, sufficient copies of
the issuer’s final official statement to comply both with this rule and any rules of the MSRB; 53
(4) to provide, for a specified period of time, copies of the final official statement to any
potential customer upon request; 54 and (5) before purchasing or selling municipal securities in
41

17 CFR 240.15c2-12(b)(5)(i)(D).

42

17 CFR 240.15c2-12(b)(5)(i)(A).

43

17 CFR 240.15c2-12(c).

44

17 CFR 240.15c2-12(b)(5)(i)(C).

45

17 CFR 240.15c2-12(b)(5)(i)(D).

46

17 CFR 240.15c2-12(d)(2)(ii)(B).

47

17 CFR 240.15c2-12(f).

48

17 CFR 240.15c2-12(f)(11)(i).

49

17 CFR 240.15c2-12(f)(11)(ii).

50

17 CFR 240.15c2-12.

51

17 CFR 240.15c2-12(b)(1).

52

17 CFR 240.15c2-12(b)(2).

53

17 CFR 240.15c2-12(b)(3).

54

17 CFR 240.15c2-12(b)(4).
7

connection with an offering, to reasonably determine that the issuer or other specified person has
undertaken, in a written agreement or contract, for the benefit of holders of such municipal
securities, to provide certain information about the issue or issuer on a continuing basis to the
MSRB.55 In addition, it is unlawful for any broker, dealer, or municipal securities dealer to
recommend the purchase or sale of a municipal security unless such broker, dealer, or municipal
securities dealer has procedures in place that provide reasonable assurance that it will receive
prompt notice of any event specified in paragraphs (b)(5)(i)(C), 56 (b)(5)(i)(D), 57 and
(d)(2)(ii)(B) 58 of the Rule.
As previously noted, the Rule is designed to prevent fraud by enhancing the timely access
of underwriters, public investors, and other interested persons to important information about
municipal securities, and to further promote the more efficient, effective, and wider availability
of municipal securities information by providing for a single centralized repository, EMMA, for
the electronic collection and availability of information about outstanding municipal securities in
the secondary market.
The Rule facilitates timely access to important information about municipal securities
that Participating Underwriters can use to carry out their obligations under the securities laws,
thereby reducing the likelihood of antifraud violations. This information could be used by
individual and institutional investors, underwriters of municipal securities, broker-dealers,
analysts, municipal securities issuers, the MSRB, vendors of information regarding municipal
securities, the Commission and its staff, and the public generally. The Rule enables market
participants and the public to be better informed about material events that occur with respect to
municipal securities and their issuers and assist investors in making decisions about whether to
buy, hold or sell municipal securities.
3.

Consideration Given to Information Technology

Since the 1994 Amendments to the Rule, there have been significant advancements in
technology and information systems that allow market participants and investors, both retail and
institutional, easily, quickly, and inexpensively to obtain information through electronic means.
The exponential growth of the Internet and the capacity it affords to investors, particularly retail
investors, to obtain, compile, and review information has likely helped to keep investors better
informed. In addition to the Commission’s EDGAR system, which contains filings by public
companies, mutual funds, and municipal advisors, the Commission has increasingly encouraged,
and in some cases required, the use of the Internet and websites by public reporting companies,
mutual funds, and municipal advisors to provide disclosures and communicate with investors.
In 2008, the Commission adopted amendments to Rule 15c2-12 to provide for a single
centralized repository, EMMA, to receive submissions in an electronic format as a means to
55

17 CFR 240.15c2-12(b)(5).

56

17 CFR 240.15c2-12(b)(5)(i)(C).

57

17 CFR 240.15c2-12(b)(5)(i)(D).

58

17 CFR 240.15c2-12(d)(2)(ii)(B).
8

encourage a more efficient and effective process for the collection and availability of continuing
disclosure documents. The Commission continues to believe that the use of EMMA by investors
and other market participants has increased efficiency in the collection and availability of
continuing disclosure documents.
4.

Duplication

The information collection requested from Participating Underwriters is not duplicative,
since this information would not otherwise be required by the Commission.
5.

Effect on Small Entities

Rule 15c2-12 is one of general applicability that does not depend on the size of a brokerdealer. Since the Rule is designed to apply to all registered broker-dealers, the Rule must apply
in the same manner to small as well as large broker-dealers. The Commission believes that
many of the substantive requirements of the Rule have been observed by underwriters and
issuers as a matter of business practice or to fulfill their existing obligations under the MSRB
rules and the general anti-fraud provisions of the federal securities laws. Moreover, the Rule
focuses only on offerings of municipal securities of $1 million or more, 59 in which any additional
costs imposed by the establishment of specific standards are balanced by the potential harm to
the large number of investors that may purchase securities based on inaccurate information. The
Commission is sensitive to concerns that the Rule not impose unnecessary indirect costs on
municipal issuers. When the Rule was proposed, many commenters, including the MSRB and
the Public Securities Association (n/k/a the Securities Industry and Financial Markets
Association), indicated that the Rule would not impose unnecessary costs or force a majority of
responsible issuers to depart from their current practices. 60 The commenters suggested that the
Rule, however, should encourage more effective disclosure practices among those issuers that
did not currently provide adequate and timely information to the market. 61 The Rule also
contains exemptions for underwriters participating in certain offerings of municipal securities
issued in large denominations that (i) are sold to no more than 35 sophisticated investors
(“limited offering exemption”), or (ii) have short-term maturities. 62
6.

Consequences of Not Conducting Collection

The purpose of Rule 15c2-12 is to prevent fraud by enhancing the timely access of
underwriters, public investors, and other interested persons to important information about
municipal securities. The Commission believes Rule 15c2-12 is reasonably designed to prevent
fraudulent, deceptive, or manipulative acts or practices in the municipal securities market. Not
conducting or narrowing the collection of information set forth in Rule 15c2-12 may jeopardize
the protection that Rule 15c2-12 provides. The Commission understands that the Rule imposes a
59

17 CFR 240.15c2-12(a).

60

See, e.g., Municipal Securities Disclosure, Exchange Act Release No. 26985 (June 28,
1989), 54 FR 28799, 28802 (July 10, 1989).

61

Id.

62

17 CFR 240.15c2-12(d)(1).
9

burden on broker-dealers; however, the Commission seeks to accomplish its goal in the least
intrusive manner, by imposing minimal additional costs on broker-dealers while enhancing
investor protection. Moreover, the Commission has already limited application of the Rule to
primary municipal offerings of $1 million or more and has incorporated a limited placement
exemption into the Rule.
7.

Inconsistencies with Guidelines in 5 CFR 1320.5(d)(2)

There are no special circumstances. This collection is consistent with the guidelines in 5
CFR 1320.5(d)(2).
8.

Consultations Outside the Agency

The required Federal Register notice with a 60-day comment period soliciting comments
on this collection of information was published. 63 The Commission received four comment
letters in response to this comment solicitation. 64 Although Commission staff appreciates the
information received from these four commenters, it is the view of staff that the estimates
contained in the Federal Register notice remain valid and the staff has not made any changes to
the Commission’s burden estimates based on these comments. As discussed more fully below, it
is the view of Commission staff that the comments received either: (i) addressed the information
collection burden generally but did not provide any quantified alternative estimate or specific
supporting data related to the burden; (ii) included recommendations that were previously
considered and addressed by the Commission during rulemaking for the 2018 Amendments, and
the commenter provided no rationale as to why the Commission should change the conclusions it
had previously reached; or (iii) included suggested changes to the Rule itself that would need to
be effected pursuant to a Commission rulemaking and are therefore beyond the scope of the PRA
analysis.
Nonetheless, as discussed more fully below, Commission staff has determined to take
under advisement many of the comments received and will further study whether they should be
applied in future PRA analyses and/or merit potential guidance or rulemaking activities related to
63

See Proposed Collection; Comment Request; Extension: Municipal Securities Disclosure
(Exchange Act Rule 15c2-12), 89 FR 88843 (November 8, 2024).

64

Letters from Richard Li (“Li Letter”), January 6, 2025 (personally identifiable
information redacted by Commission staff); Emily S. Brock, Director, Federal Liaison
Center, Government Finance Officers Association (“GFOA Letter”), January 7, 2025; M.
Jason Akers, President, National Association of Bond Lawyers (“NABL Letter”), January
7, 2025 (the commenter submitted two versions of this letter with identical substance but
slightly different page numbers; the version addressed to Austin Gerig, Director/Chief
Data Officer, SEC, is cited herein); Leslie M. Norwood, Managing Director and
Associate General Counsel, and Gerald O’Hara, Vice President and Assistant General
Counsel, Securities Industry and Financial Markets Association (“SIFMA Letter”),
January 7, 2025. In addition, Commission staff discussed the 60-day notice, among other
things, during a video conference with representatives of Digital Assurance Certification,
LLC (“DAC Bond”). See Memorandum from the Office of Municipal Securities
regarding a November 12, 2024 meeting with representatives of DAC Bond.
10

Rule 15c2-12. 65 Among other things, staff will take under advisement comments suggesting that
the Commission should: (i) more effectively survey market participants to obtain PRA burden
estimates; (ii) analyze the burdens that Rule 15c2-12 imposes on broker-dealers by offering type
(negotiated offering, competitive offering, or private placement), and by the number of
underwriters involved in the transaction; (iii) analyze the burdens that compliance with the
limited offering exemption imposes on broker-dealers; (iv) update or amend existing guidance on
Rule 15c2-12; and (v) update or amend Rule 15c2-12 itself (e.g., by removing the “rating
change” event notice).
In addition, Commission staff consulted with MSRB staff concerning the burdens and
costs to the MSRB of complying with Rule 15c2-12.
Burden on Issuers / Method of Developing PRA Estimates
One commenter stated that the Commission underestimated the overall burden on issuers
to comply with continuing disclosure undertakings entered into pursuant to Rule 15c2-12. 66
According to this commenter, four specific areas are not “factored into” the Commission’s cost
and time estimates: (1) large and medium-sized issuers frequently need to retain dedicated staff
or an increased number of dedicated staff to address the ongoing compliance demands of their
continuing disclosure obligations; 67 (2) the burden on issuers significantly increased when new
listed events “(15) incurrence of a financial obligation” and “(16) events under the terms of a
financial obligation of the obligated person, any of which reflect financial difficulties” were
added to the Rule; 68 (3) issuers face ongoing burdens from activities that are “necessarily
ancillary” to compliance with undertakings; 69 and (4) issuers face a compliance burden
“interfacing” with the MSRB’s EMMA system.70
65

Commission staff does not commit to take any course of action following further study of
these comments.

66

See GFOA Letter, at 1.

67

See id., at 1.

68

See id., at 1-2 (quoting 17 CFR 240.15c2-12(b)(5)(i)(C)(15), (16)) (internal quotes
omitted) (emphasis in original). According to this commenter, such burdens include:
more time to consider what obligations fall within the scope of the event notices,
discussing the appropriate content of the notices, procuring/consulting with counsel,
preparing the event notices themselves, and integrating a substantially larger scope of
staff to ensure that all obligations covered by the Rule could be captured. See id., at 2.

69

According to this commenter, such burdens include: regularly training staff, developing
policies and procedures, retaining ongoing counsel, conducting due diligence on past
continuing disclosure filings and making necessary curative filings, and addressing
“disconnects” in both when and how filings are made that leads to interpretative
disagreements, various views on whether and how curative filings should be made, and
what prospective disclosure should contain. See id.

70

According to this commenter, issuers routinely do work to ensure they understand
EMMA and know how to navigate EMMA to ensure they are properly making their
filings. See id. This commenter stated that EMMA can be challenging for issuers to
11

This commenter further stated that, although it understands the Commission needs to
develop the present PRA burden estimates as a matter of statutory requirements, the commenter
is “less clear” about the process by which these estimates were compiled. 71 This commenter
stated that most of the Commission’s burden estimates related to issuers appear to be based on
how much outside counsel will be involved and not enough about the increasing staff time of
issuers needed to comply with their undertakings, the costs that process and staff attention
impose on issuers, and how that impact affects large-, medium- and small-sized issuers,
respectively. 72 This commenter recommended that the Commission obtain these kinds of
estimates through more effective surveying of a wide variety of issuers who have a wide
variation of experiences with compliance. 73
After consideration, the Commission has not made any changes to its burden estimates
based on these comments. With respect to the comment suggesting that the Commission could
be more clear about the process by which it develops its PRA burden estimates, Commission
staff notes, by way of background, that the PRA requires the Commission to obtain OMB
approval at least once every three years to extend the existing information collection provided for
in Rule 15c2-12. 74 To extend the expiration date of an existing collection, the Commission must
provide the public with two opportunities to comment (a 60-day Federal Register notice
soliciting comments for internal consideration by the Commission, and a 30-day Federal Register
notice soliciting comments for consideration by OMB), and then resubmit the information
collection request for OMB review, including a Supporting Statement prepared by the
Commission.75 Commission staff will generally develop the Commission’s PRA burden
estimates for such an extension by reviewing the Supporting Statement for the most recent
collection that OMB has approved 76 and, against that baseline, determining whether any
correctly file each necessary filing to each CUSIP, and ensure that all filings have been
properly filed to each CUSIP and each appropriate portal and selection on EMMA. See
id.
71

See id.

72

See id.

73

See id., at 2-3.

74

See 44 U.S.C. 3507(g) (“[OMB] may not approve a collection of information for a period
in excess of 3 years.”).

75

See generally U.S. General Services Administration & OMB, “A Guide to the Paperwork
Reduction Act,” https://pra.digital.gov (last visited February 4, 2025) (providing federal
agencies with information on the PRA and related processes, including links to relevant
“additional resources”).

76

All Supporting Statements for extensions of the information collection provided for in
Rule 15c2-12 are publicly available by accessing
https://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=3235-0372,
selecting the relevant “ICR Ref. No.,” and navigating to “View Supporting Statement and
Other Documents.” Supporting Statements for new information collections arising from
amendments to the Rule are available through the same process. The Commission also
12

revisions may be appropriate. Commission staff generally makes that determination by, among
other things: (1) analyzing recent market data; (2) consulting with the MSRB; (3) consulting with
market participants; (4) identifying any relevant trends or changes in circumstances (e.g.,
inflation); (5) considering any other relevant information that Commission staff may have
become aware of (e.g., data provided by market participants outside of the PRA context); and (6)
considering any public comments received in response to the 60-day notice. As reflected in prior
Supporting Statements, the Commission has generally been more amenable to revising its PRA
burden estimates in response to public comments when such comments include quantified
alternative estimates as well as specific supporting data. 77
With respect to the comment that the Commission could more effectively survey issuers
to obtain burden estimates, Commission staff acknowledges that it is beneficial for the
Commission to receive quantified alternative estimates, specific supporting data, and other
responsive information from a wide variety of market participants (including issuers) for the
purpose of developing its PRA estimates. Commission staff will therefore take this comment
under advisement for future PRA analyses.
With respect to the other comments related to burdens on issuers, Commission staff notes
that the commenter did not provide any quantified alternative estimates or supporting data (either
generally, with respect to large-, medium-, or small-sized issuers, respectively, or with respect to
the four specific areas described above). In addition, it is the view of Commission staff that the
Commission’s hour and cost estimates generally do take into account examples provided by the
commenter. For example, with respect to the two “new” event notices referenced by the
commenter, those event notices were added to Rule 15c2-12 as part of the 2018 Amendments,
the Commission had previously taken those burdens into account at the time they were
adopted, 78 the Commission doubled the estimated hours burden to complete an average event

provides PRA burden estimates in its proposing releases for amendments to the Rule, and
considers any comments received in the adopting releases. See, e.g., 2008 Amendments
Adopting Release, 73 FR at 76120, et seq. (“Paperwork Reduction Act” section); 2010
Amendments Adopting Release, 75 FR at 33125, et seq. (same); 2018 Amendments
Adopting Release, 83 FR at 44717, et seq. (same).
77

See, e.g., PRA Supporting Statement for Rule 15c2-12 (September 24, 2015), at 6,
available at https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=2014093235-042 (“In response to previous comment solicitations in 2008 and 2009 on the
[PRA] burdens associated with Rule 15c2-12, the Commission received either no
comments, or comments that did not include any quantified alternative estimates or that
did not include any supporting data. In contrast to those previous comment solicitations,
the Commission received comment letters in response to the 60-day notice that included
comments providing specific alternative estimates of the [PRA] burdens of Rule 15c2-12
and specific data to support the commenters’ alternative estimates. Based on the new
information commenters provided in response to the 60-day notice, Commission staff has
revised many of its hourly burden estimates . . . .”).

78

See 2018 Amendments Adopting Release, 83 FR at 44717, et seq.
13

notice from two hours to four hours, 79 and the Commission received no public comments during
the prior PRA renewal process in 2021.
Burden on Broker-Dealers
Hours Burden to Reasonably Determine That the Issuer or Obligated Person Has
Undertaken, in a Written Agreement or Contract, for the Benefit of Holders of Municipal
Securities, to Provide Continuing Disclosure Documents to the MSRB: One commenter stated
that the Commission’s estimate of this hours burden—15 minutes (0.25 hours) per issuance of
municipal securities—might be reasonable in those instances where a broker-dealer has
previously and recently worked with an issuer or obligor that has clearly detailed its written
undertaking to provide continuing disclosures to the MSRB, but “at least one hour, and
potentially more,” is a more accurate estimate of the average amount of time required for
underwriters and potential underwriters to comply with this aspect of the Rule. 80
After consideration, the Commission has not made any changes to its burden estimate
based on this comment. Commission staff notes that the estimate of 15 minutes (0.25 hours) is
higher than the estimate initially proposed by the Commission during rulemaking for the 2018
Amendments and is the same estimate proposed during the prior PRA renewal process in 2021,
but the Commission received no comments on this burden during either process. 81 Commission
79

See 2018 Amendments Adopting Release, 83 FR at 44724 (“In response to comments,
the Commission is revising, from two hours to four hours, its estimate of the average time
needed for an issuer to prepare and submit an event notice to the MSRB in an electronic
format, including time to actively monitor the need for filing. . . . The Commission
recognizes that the event notices required by the amendments may on average be more
complex and require more than an average of four hours to monitor, evaluate, prepare,
and file. But, as discussed below, the Commission believes that the adopted amendments
will generate relatively few event notices and that the majority of the event notices
required to be filed under the Rule are not as time-consuming for an issuer to monitor,
evaluate, prepare, and file.”).

80

SIFMA Letter, at 3-4. This commenter noted that there are over 50,000 municipal
securities issuers; that issuers and obligors do not always use the same continuing
disclosure agreements; that broker-dealers must review each continuing disclosure
agreement to determine not only that the undertaking exists, but that it is compliant with
the current Rule; and that broker-dealers must review and communicate what operating
information the issuer or obligor must provide as part of the undertaking. See id., at 3.
This commenter also noted that all of these reviews may require that certain steps be
completed and documented for compliance purposes and may also require supervisory
procedures and/or approval by multiple individuals at a single firm, which increases the
amount of time required to complete the reviews. See id., at 3-4.

81

See, e.g., 2018 Amendments Adopting Release, 83 FR at 44721 (“Using this new method
of calculation, the Commission is revising its estimate that dealers would continue to
incur a burden of 2,500 hours per year (10 hours per dealer per year), to reasonably
determine that the issuer or obligated person has undertaken, in a written agreement or
contract, for the benefit of holders of municipal securities, to provide continuing
14

staff further notes that, although this commenter has now provided a quantified alternative
estimate of “at least one hour,” the commenter did not provide any specific supporting data, 82
nor did the commenter provide any rationale as to why the Commission should change the
conclusions it had previously reached during the rulemaking process for the 2018 Amendments.
As stated in the 2018 Amendments Adopting Release 83: (i) the Commission understands that
most continuing disclosure agreements are provided to the broker-dealer by the issuer or
obligated person and that most of these agreements are standard form agreements 84 of limited
length, and (ii) the Commission believes that the determination required to be made—that the
issuer or obligated person has undertaken to provide continuing disclosure documents to the
MSRB—is a narrow one that does not require a substantial time commitment from the brokerdealer. In the view of Commission staff, the rationale in the 2018 Amendments Adopting
Release continues to apply. For the foregoing reasons, it is the view of Commission staff that the
estimate of 15 minutes (0.25 hours) burden per issuance continues to be reasonable.
Hours Burden to Determine Whether Issuers or Obligated Persons Have Failed to
Comply, in All Material Respects, with Any Previous Undertakings in a Written Contract or
Agreement Specified in Paragraph (b)(5)(i) of the Rule: One commenter stated that the
Commission’s estimate of this hours burden—9 hours per issuance of municipal securities—
materially underestimates the burdens of the Rule on broker-dealers. 85 According to this

disclosure documents to the MSRB. The Commission estimates that dealers will incur a
15 minute burden per issuance of municipal securities to make this determination,
resulting in an annual burden on all dealers of approximately 3,415 hours (approximately
13.7 hours per dealer per year). This revised estimate constitutes an increase of
approximately 915 hours (approximately 3.7 hours per dealer) over the estimates
provided in the Proposing Release. No commenter provided an estimate for this
burden.”) (emphasis added).
82

See, e.g., SIFMA Letter, at 3-4 (commenter stating it “believes” that broker-dealers “can”
spend an hour or more with the issuer or obligated person and underwriter’s counsel, and
that compliance documentation and supervisory procedures “may” be required).

83

See 2018 Amendments Adopting Release, 83 FR at 44721.

84

See id., 83 FR at 44721, note 228 (“Although not required by the Commission, a staff
letter suggested that a standard form should be used. See Letter from Catherine McGuire,
Chief Counsel, Division of Market Regulation, U.S. Securities and Exchange
Commission, to John S. Overdorff, Chair, Securities Law and Disclosure Committee,
Nat’l Ass’n of Bond Lawyers (Sept. 19, 1995), available at
https://www.sec.gov/info/municipal/nabl-2-interpretive-letter-1995-09-19.pdf (‘NABL
2’) (stating that such documents ‘should list all events in the same language as is
contained in the rule, without any qualifying words or phrases’).”).

85

See SIFMA Letter, at 4.
15

commenter, a more accurate estimate is “a minimum of 10 hours up to a multiple thereof,”
depending on a variety of factors. 86
This commenter also asserted that the Commission’s estimates should distinguish
between offering type (negotiated offering, competitive offering, or private placement) and
recognize that multiple underwriters may participate in an offering, regardless of offering type. 87
With respect to negotiated offerings, this commenter stated that the Commission’s estimates do
not appear to account for the time spent by certain underwriters, such as co-managers in a
syndicate, to draft and/or review the accuracy of the issuer or obligor’s representations in the
disclosure compliance statements in the offering documents. 88 According to this commenter,
these steps could add “at least five extra hours in the aggregate” to a deal team’s development
and review of an official statement to ensure Rule compliance, over and above the time required
for underwriters to review the issuer’s past compliance with continuing disclosure
undertakings. 89
With respect to competitive offerings, this commenter stated that the Commission’s
estimates only account for time spent on transactions actually underwritten, and noted that
broker-dealers review an issuer’s financial and operational documents as they prepare to submit
a bid to act as a Participating Underwriter. 90 This commenter stated that, although pre-bid initial
reviews may not be as extensive as the reviews conducted after becoming Participating
Underwriters (or even possible), bid preparation still involves several steps relevant to
compliance with the Rule, including a review of the disclosure compliance statement in the
deemed final preliminary official statement, or offering document, for accuracy against publicly
available financial information and industry news. 91 According to this commenter, the per
offering burden to review the financial and operational disclosures in competitive offerings could
range from “two to seven times” the Commission’s estimated average per underwriter review
time, and this number is “likely even larger” given that multiple underwriters often participate in
competitive syndicates. 92

86

Id., at 4-5. This commenter stated that “[t]his ten-hour estimate is composed of an
average initial review of approximately eight hours by the broker-dealer or outside
vendor and two hours of additional reviews, investigation and supervisory procedures.”
SIFMA Letter, at 5, note 10. This commenter also stated that the burden depends on a
variety of factors, including but not limited to: “issuer type; number of their outstanding
CUSIP numbers; number of past issuances; complexity of outstanding issuances; public
information and statements about the issuer, obligated persons or project; and number of
Participating Underwriters.” Id.

87

See id., at 5-6.

88

See id.

89

Id., at 5.

90

See id., at 6.

91

See id.

92

Id.
16

After consideration, the Commission has not made any changes to its burden estimates
based on these comments. Commission staff acknowledges that the actual burden on a brokerdealer in a particular issuance of municipal securities may depend on a variety of factors
(including offering type and number of underwriters involved), but staff reiterates that the
Commission’s burden estimates are intended to be estimated averages across all issuances. 93
Staff notes that the Commission arrived at its average burden estimate of 9 hours per issuance of
municipal securities after considering and responding to public comments in the course of the
2018 Amendments rulemaking process, 94 and the Commission received no comments during the
prior PRA renewal process in 2021. Commission staff further notes that, although this
commenter has provided a quantified alternative estimate of “a minimum of 10 hours up to a
multiple thereof,” the commenter did not provide any specific supporting data, 95 nor did the
93

See, e.g., 2018 Amendments Adopting Release, 83 FR at 44722 (“The Commission
understands that burdens will vary across dealers and across specific issuances depending
on numerous factors, such as the frequency of issuances by the issuer, size and
complexity of the issuer, and the familiarity of the dealer with the issuer. The burden for
some dealers will exceed our estimate, and the burden for others will be less.”).

94

See, e.g., id., 83 FR at 44721 (“[I]n response to comments, the Commission is now
calculating the PRA burdens on dealers under Rule 15c2-12 on a per issuance of
municipal securities basis. . . . Under the new method of calculation, the Commission
believes that the [2018 Amendments] will, on average, amount to an additional one hour
burden per issuance of municipal securities [to determine whether issuers or obligated
persons have failed to comply, in all material respects, with any previous undertakings in
a written contract or agreement specified in paragraph (b)(5)(i) of the Rule] . . . . Finally,
the Commission is revising its prior estimates, predating the proposed amendments, that
the total annual burden for dealers to determine whether issuers or obligated persons have
failed to comply, in all material respects, with any previous undertakings in a written
contract or agreement specified in paragraph (b)(5)(i) of the Rule is 20,000 hours (80
hours per dealer per year). No commenter provided an estimate for this burden. Under the
new method of calculation, the Commission believes that dealers will incur 8 hours of
burden per issuance of municipal securities to make this determination . . . . The
Commission arrived at the 8-hour per issuance burden estimate after considering (1) the
comments addressing the prior burden estimates for dealers under Rule 15c2-12,
particularly the comments related to the Commission’s prior PRA submissions; (2)
comments addressing the potential that dealer burdens may have shifted as a result of
subsequent Commission action; (3) the MSRB’s statistics concerning the number of event
notices filed on an annual basis; and (4) the potential volume of documentation to be
reviewed under this obligation.”) (emphasis added).

95

See, e.g., SIFMA Letter, at 4-5 (stating that an unspecified number of firms report
needing multiple full-time equivalent professionals to handle reviews; that “[m]any”
broker-dealers use outside counsel or vendors to conduct primary or supplementary
reviews; that “[s]ome” broker-dealers substitute the cost of a vendor report for some of
the cost of work that could be done in-house; that vendors “anecdotally” report spending
approximately eight hours per initial report; and that underwriters and potential
17

commenter provide any rationale as to why the Commission should change the conclusions it
had previously reached during the 2018 Amendments rulemaking process. Likewise, although
this commenter provided quantified alternative estimates related to negotiated offerings (“at least
five extra hours in the aggregate”) and competitive offerings (“two to seven times” the
Commission’s estimated average per underwriter review time), this commenter did not provide
any specific supporting data for either of these purported burdens, 96 nor did this commenter
provide any rationale as to why these burdens may have arisen (or changed) since the 2018
Amendments.
For the foregoing reasons, it is the view of Commission staff that the estimate of 9 hours
burden per issuance of municipal securities continues to be reasonable. Commission staff does
acknowledge, however, that depending on the availability of specific supporting data, it could
potentially be useful in future PRA extensions to analyze the burdens that Rule 15c2-12 imposes
by offering type, and by the number of underwriters involved in the transaction. Commission
staff will therefore take these comments under advisement.
Hours Burden Related to Broker-Dealers That Recommend Municipal Securities
Transactions in the Secondary Market: One commenter asserted that the Commission’s
estimates omitted, but should have included, the work broker-dealers undertake to comply with
obligations under Rule 15c2-12(c) and MSRB Rule G-47 when making recommendations to buy
or sell municipal securities in the secondary market. 97 Among other things, the commenter
stated that, “[w]hile the Commission is correct that broker-dealers have separate obligations to
comply with the general anti-fraud provisions of the federal securities laws and MSRB rules, the
Rule does impose prescriptive requirements for broker-dealers making recommendations in
municipal securities to have systems in place to obtain and review the financial and operational
data contained in paragraph (b)(5) of the Rule.” 98
After consideration, the Commission has not made any changes to its burden estimates
based on this comment. Commission staff notes that the Commission had previously considered
and addressed similar comments received during the 2018 Amendments rulemaking process
(including one from this commenter), 99 the Commission received no comments on this burden
underwriters completing these reviews therefore “could” spend from a minimum of 10
hours up to a multiple thereof, “depending on a variety of factors”).
96

See, e.g., id., at 5 (stating that the requirements “could” add at least five extra hours “in
the aggregate” across the entire deal team, i.e., potentially applicable not just to the
broker-dealer, but also spread to “the issuer, . . . municipal advisor, and each party’s
counsel”); id., at 6 (stating that, according to unspecified “previous anecdotal estimates,”
there were on average two bidding underwriters in small competitive transactions, and on
average seven bidding underwriters in large competitive transactions, each of which
conducts similar reviews for compliance with the Rule).

97

See SIFMA Letter, at 6-7.

98

Id., at 7.

99

See Letter from Leslie M. Norwood, Managing Director and Associate General Counsel,
SIFMA, to Brent J. Fields, Secretary, Commission, dated May 15, 2017, at 4, available at
18

during the prior 2021 PRA renewal process, and this commenter did not provide any rationale as
to why the Commission should change the conclusions it had previously reached during the
rulemaking process for the 2018 Amendments. Commission staff further notes that this
commenter did not provide any quantified alternative estimates or supporting data for this
purported burden. 100
Hours Burden Related to the Limited Offering Exemption: One commenter asserted that
the Commission’s estimates omitted, but should have included, the steps that broker-dealers take
to conduct and document due diligence in order to rely on the Rule’s limited offering
exemption. 101 According to this commenter, that hours burden is “a minimum of five aggregate
staff hours” per transaction. 102
After consideration, the Commission has not made any changes to its burden estimates
based on this comment. Commission staff notes that, although this commenter provided a
quantified alternative estimate of “a minimum of five aggregate staff hours,” the commenter did
not provide any specific supporting data. 103 Commission staff does acknowledge, however, that
depending on the availability of specific supporting data, it could potentially be useful for the
Commission, in future PRA analyses, to analyze burdens related to the limited offering
exemption. Commission staff will therefore take this comment under advisement.

https://www.sec.gov/comments/s7-01-17/s70117-1753185-151945.pdf; 2018
Amendments Adopting Release, 83 FR at 44726 (“Under the Rule prior to these
amendments and in the Proposing Release, the Commission made no estimate of the
burden on dealers effecting transactions in the secondary market to comply with Rule
15c2-12. Two commenters characterized this as an omission. Those commenters cited to
obligations, under Rule 15c2-12(c) and MSRB Rule G-47, which those commenters
stated required dealers in the secondary market to disclose material information to
investors, expressing concern that the proposed amendments would greatly increase the
burden on such dealers. . . . The Commission continues to believe that neither the adopted
amendments nor Rule 15c2-12 prior to amendment contains ‘collection of information
requirements’ within the meaning of the PRA on dealers effecting transactions in the
secondary market. Rule 15c2-12(c) requires only that a dealer acting in the secondary
market have ‘procedures in place that provide reasonable assurance that it will receive
prompt notice of any event disclosed pursuant to paragraph (b)(5)(i)(C), paragraph
(b)(5)(i)(D), and paragraph (d)(2)(ii)(B)’ of the Rule. To the extent that dealers effecting
transactions in the secondary market review and disclose material to customers, those
associated burdens stem from antifraud provisions and MSRB rules that are not subject to
this PRA analysis.”).
100

See, e.g., SIFMA Letter, at 7 (stating that the Rule creates “significant” compliance
burdens for broker-dealers making recommendations in the secondary market).

101

See SIFMA Letter, at 7-8.

102

Id., at 8.

103

See, e.g., id. at 8 (stating that, “[a]necdotally,” broker-dealers report that this task can
take a minimum of five aggregate staff hours per transaction).
19

Guidance on Rule 15c2-12
One commenter noted that the Commission’s 1994 Interpretive Release to Rule 15c212 is now over 30 years old, recommended that the Commission take this opportunity to
review the existing guidance to Rule 15c2-12, and stated that updates and amendments could be
made to reduce the burdens of the Rule. 105 This commenter also provided an example of a topic
that, in the commenter’s view, would merit such guidance. 106
104

After consideration, the Commission has not made any changes to its burden estimates
based on this comment. Commission staff notes that this commenter did not provide any
quantified estimates or supporting data related to the potential reduction in burdens that might be
achieved by updates or amendments to the existing Commission guidance on Rule 15c2-12.
With respect to the specific example that this commenter suggested would merit guidance,
Commission staff notes that, to the extent the specific example would require amendments to
Rule 15c2-12, any suggested changes to the Rule itself would need to be effected pursuant to a
Commission rulemaking and are beyond the scope of the PRA analysis. Commission staff
further notes that the Commission, in the course of rulemaking, had previously considered and
addressed comments requesting guidance on other specific topics related to Rule 15c2-12 and the
antifraud provisions of the federal securities laws. 107 Finally, Commission staff notes that, in the
104

See Statement of the Commission Regarding Disclosure Obligations of Municipal
Securities Issuers and Others, Exchange Act Release No. 33741 (March 9, 1994), 59 FR
12748 (March 17, 1994) (“1994 Interpretive Release”).

105

See SIFMA Letter, at 8-9.

106

This commenter appeared to suggest that the Commission should issue guidance deeming
certain information maintained on the publicly available website of a municipal securities
issuer to be a compliant disclosure under Rule 15c2-12. See id., at 9 (“For example, both
the initial Rule and its continuing disclosure amendments were adopted prior to the
existence of easily accessible public information about issuers of municipal securities.
Most states, large cities and counties, and other municipal securities issuers have publicly
available websites on which they maintain the same financial disclosures required by the
Rule, plus other useful information. Issuers also often update this public information
more frequently than required by the Rule. For these issuers, the Rule’s duplicative
disclosure provisions may not provide much additional benefit in reducing securities
fraud. In these circumstances, the more limited amount of benefit should be weighed
against the burdens imposed on issuers, underwriters, and the MSRB.”).

107

See, e.g., 2018 Amendments Adopting Release, 83 FR at 44701, note 13 (“The
Commission also provided interpretive guidance [in the 2010 Amendments Adopting
Release] on Participating Underwriter responsibilities under the antifraud provisions of
the federal securities laws in response to market participants’ concerns that some issuers
and obligated persons were not consistently submitting continuing disclosure documents
in accordance with the undertakings made in their continuing disclosure agreements”);
id., 83 FR at 44710 (“[A]s discussed below, the Commission is providing guidance that
the term ‘debt obligation’ generally should be considered to include lease arrangements
entered into by issuers and obligated persons that operate as vehicles to borrow money.”);
20

years since the Commission’s 1994 Interpretive Release was issued, staff has on many occasions
provided its views on other specific topics related to Rule 15c2-12 and the antifraud provisions
of the federal securities laws. 108
Commission staff does acknowledge, however, that—depending on the topic at issue, and
the nature of the potential guidance—certain updates or amendments to the existing guidance on
Rule 15c2-12 could have the potential to reduce the burdens of the Rule. Commission staff will
therefore take this recommendation under advisement.
Changes to Rule 15c2-12
One commenter recommended that the Commission consider amending Rule 15c2-12 to
“streamline” the limited offering exemption to reduce impediments to capital formation. 109
In addition, three commenters recommended that the Commission consider amending
Rule 15c2-12 to remove the required filing of event notices regarding rating changes. 110 These
commenters generally asserted that it is unnecessary and duplicative for issuers to file rating
change event notices to EMMA because the underlying source of the rating changes, the
Nationally Recognized Statistical Rating Organizations (NRSROs), currently submit their rating
change information directly to EMMA using an automated process. 111 A fourth commenter
id., 83 FR at 44714 (“The Commission continues to believe that the guidance provided in
the Proposing Release regarding the term ‘guarantee’ accurately sets forth the coverage
of guarantee of a debt obligation or derivative instrument entered into in connection with,
pledged as security or a source of payment for, an existing or planned debt obligation by
the Rule.”).
108

See generally SEC, Office of Municipal Securities, “Municipal Securities Disclosure,”
https://www.sec.gov/about/divisions-offices/office-municipal-securities/municipalsecurities-disclosure (last visited February 4, 2025) (providing links to no-action letters,
staff interpretive guidance, public statements/press releases, and other resources
pertaining to municipal securities disclosure); see also, e.g., SEC, Office of Municipal
Securities, “Municipal Securities SEC Conferences,”
https://www.sec.gov/about/divisions-offices/office-municipal-securities/municipalsecurities-sec-conferences (last visited February 4, 2025) (providing recordings and
materials from recent municipal securities disclosure conferences organized and
moderated by Commission staff).

109

SIFMA Letter, at 8.

110

GFOA Letter; NABL Letter; Li Letter. See 17 CFR 240.15c2-12(b)(5)(i)(C)(11). One of
these commenters also requested that the Commission “deem all outstanding Continuing
Disclosure Agreement[s] to have the requirement removed unless reaffirmed by an
Issuer.” Li Letter.

111

See GFOA Letter, at 2 (stating that “Rating Changes are performed by NRSRO’s which
are separately required to report rating changes;” “[i]n some instances, the Issuer may not
be aware of rating changes because the change relates to another entity, the rating on the
financing is tied to the other entity, and the NRSRO does not inform the issuer of the
rating change;” “[t]he collection of the ‘(11) Rating Change’ information from the issuer
21

shared similar concerns, but appeared to suggest that the Commission could potentially address
those concerns through staff guidance in lieu of rulemaking. 112 With respect to the potential
reduction in burdens that might be achieved by removing the rating change event notice from
Rule 15c2-12, one commenter asserted that covered persons spent 22,496 hours filing rating
change event notices in 2022, and 14,652 hours filing rating change event notices in 2023. 113
This commenter also acknowledged that its request to amend Rule 15c2-12 may be outside of the
scope of a PRA review, but recommended that, at a minimum, the Commission should
“reexamine the efficacy and necessity of requiring rating changes event notices during its next
substantive review of the Rule.” 114
After consideration, the Commission has not made any changes to its burden estimates
based on these comments. Commission staff notes that any suggested changes to the Rule itself
would need to be effected pursuant to a Commission rulemaking and are beyond the scope of the
PRA analysis. With respect to the proposal to amend the limited offering exemption,
Commission staff notes that the commenter provided no specific recommendation on how the
exemption could be “streamlined and amended,” 115 and did not provide any quantified estimates
or supporting data related to the potential reduction in burdens that might be achieved by
amending the exemption. With respect to the proposal to remove the rating change event notice
is not necessary as it is already collected separately from the NRSRO itself;” and “[t]he
information from the issuer does not have practical utility since it duplicates the
information provided directly from the NRSRO”); NABL Letter, at 1-2 (stating that the
rating change information currently available on EMMA renders rating change event
notices “redundant and unnecessary;” that “the inclusion of event notices for ratings
changes in the Rule creates an unnecessary risk for various covered market participants in
the event an issuer or obligated person fails to file a ratings change event notice within
ten business days” because “it often . . . lead[s] to additional time spent notifying
interested persons of the failure and disclosing it in future offerings of municipal
securities.”); Li Letter (stating that “[h]aving the primary source of the rating change
(NRSRO) report the information [to EMMA] enhances the quality, utility, and clarity of
the information collected;” that “Issuer reporting (secondary source) is not reliable
because NRSRO’s are not required to report the change in a timely manner to the Issuer,”
and “[t]hat can also cause Issuers to have a ‘failure to file’ due to a 3rd party (NRSRO)
not informing the Issuer of the rating change”]; and “[n]ot requiring the issuer to ALSO
report the information minimizes the burden of the collection of information”).
112

See SIFMA Letter, at 9 (“We believe the SEC or its staff should conclude publicly that
these rating agency feeds [sent directly to EMMA from the relevant NRSROs] satisfy
issuer filing obligations or, at a minimum, that any issuer failure to file a duplicative
notice is not material.”).

113

See NABL Letter, at 2 (stating that “[t]he PRA review estimates that simple event notices
take covered persons 4 hours to complete,” and purporting to multiply that 4-hour burden
estimate by the number of rating change event notices filed in 2022 (5,624 according to
the commenter) and 2023 (3,663 according to the commenter)).

114

Id., at 2.

115

SIFMA Letter, at 8.
22

from the Rule, it is the view of Commission staff that the estimated annual hours burdens
provided by one of the commenters are likely not precise, nor representative of burdens over the
longer term, because: (a) the commenter relied on the Commission’s 4-hour burden estimate for
filing non-complex event notices, but that estimate applies to the average time needed to
monitor, prepare, and file all sixteen types of event notices included within the Rule, 116 and (b) a
relatively high number of rating change filings occurred during the 2021-2023 time period,
which is likely due to the impact caused by the COVID-19 pandemic. 117
Commission staff does acknowledge, however, that certain updates or amendments to
Rule 15c2-12 (or the existing guidance on Rule 15c2-12) could potentially reduce the burdens of
the Rule. Commission staff will therefore take these recommendations under advisement.
9.

Payment or Gift

Not applicable.
10.

Confidentiality

No assurances of confidentiality have been provided.
11.

Sensitive Questions

No questions of a sensitive nature are asked. The information collection does not collect
information about individuals and, therefore, a Privacy Impact Assessment, System of Records
Notice, and Privacy Act Statement are not required.
12.

Information Collection Burden

a. Broker-Dealers
Rule 15c2-12 imposes ongoing third-party disclosure burdens on broker-dealers that act
as Participating Underwriters in offerings of municipal securities. The Commission calculates
the PRA burdens on broker-dealers under Rule 15c2-12 on a “per issuance of municipal
securities” basis. The Commission believes this is appropriate because a broker-dealer’s
obligations under Rule 15c2-12 are triggered only by acting as a Participating Underwriter in an
offering of municipal securities. This method is consistent with the Commission’s estimates of
the PRA burden on issuers under the Rule, which are similarly calculated on a per event basis
(see further below). The Commission is basing its estimate on the average number of primary
market submissions to the MSRB over the past three years – 10,968. 118

116

See supra Section 12.b.

117

For instance, this commenter cited the MSRB’s 2023 Factbook to note that 5,624 rating
change event notices occurred in 2022 (see NABL Letter, at 2), but of those 5,624 rating
change event notices, over half occurred a year after the start of the pandemic (2,054 in
March 2022 alone and 1,070 in April 2022 alone) (see 2023 MSRB Factbook at 71).

118

In 2021 there were 13,697 primary market submissions to the MSRB, in 2022 there were
9,982 primary market submissions to the MSRB, and in 2023 there were 9,226 primary
market submissions to the MSRB. 13,697 + 9,982 + 9,226 = 32,905. 32,905 ÷ 3 =
23

Based on estimates provided by the MSRB, the Commission estimates that, over the last
three years, an average of 205 broker-dealers served as a Participating Underwriter in municipal
securities offerings. 119 Accordingly, the Commission estimates that approximately 205 brokerdealers could serve as a Participating Underwriter in municipal securities offerings over the next
three years. Further, the Commission estimates that broker-dealers will incur a 15 minute (0.25
hour) burden per issuance of municipal securities to reasonably determine that the issuer or
obligated person has undertaken, in a written agreement or contract, for the benefit of holders of
municipal securities, to provide continuing disclosure documents to the MSRB, resulting in an
annual burden on all broker-dealers of approximately 2,742 hours (approximately 13.4 hours per
broker-dealer per year). 120 However, as stated in the 2018 Amendments Adopting Release 121: (i)
the Commission understands that most continuing disclosure agreements are provided to the
broker-dealer by the issuer or obligated person and that most of these agreements are standard
form agreements 122 of limited length, and (ii) the Commission believes that the determination
required to be made—that the issuer or obligated person has undertaken to provide continuing
disclosure documents to the MSRB—is a narrow one that does not require a substantial time
commitment from the broker-dealer. For these reasons, the Commission believes the estimate of
a 15 minute burden per issuance is appropriate.

10,968.33. See Municipal Securities Rulemaking Board 2022 Fact Book (“2022 MSRB
Factbook”), at 64, available at https://www.msrb.org/sites/default/files/2023-03/MSRB2022-Fact-Book.pdf (covering 2021 and 2022); MSRB 2023 Fact Book at 64 (covering
2023).
119

The MSRB estimates that 214 broker-dealers served as a Participating Underwriter in
municipal securities offerings in the year ending October 1, 2021, 205 broker-dealers
served as a Participating Underwriter in municipal securities offerings in the year ending
October 1, 2022, and 195 broker-dealers served as a Participating Underwriter in
municipal securities offerings in the year ending October 1, 2023. 214 + 205 + 195 = 614.
614 ÷ 3 = 204.67.

120

10,968 (estimated annual issuances) x 0.25 (hourly burden to reasonably determine that
the issuer or obligated person has undertaken, in a written agreement or contract, for the
benefit of holders of such municipal securities, to provide continuing disclosure
documents to the MSRB) = 2,742 hours. 2,742 hours ÷ 205 (estimated number of brokerdealers) = 13.38 hours.

121

See 2018 Amendments Adopting Release, 83 FR at 44721.

122

See id., 83 FR at 44721, note 228 (“Although not required by the Commission, a staff
letter suggested that a standard form should be used. See Letter from Catherine McGuire,
Chief Counsel, Division of Market Regulation, U.S. Securities and Exchange
Commission, to John S. Overdorff, Chair, Securities Law and Disclosure Committee,
Nat’l Ass’n of Bond Lawyers (Sept. 19, 1995), available at
https://www.sec.gov/info/municipal/nabl-2-interpretive-letter-1995-09-19.pdf (‘NABL
2’) (stating that such documents ‘should list all events in the same language as is
contained in the rule, without any qualifying words or phrases’).”).
24

The Commission further estimates that broker-dealers will incur 9 hours of burden per
issuance of municipal securities to determine whether issuers or obligated persons have failed to
comply, in all material respects, with any previous undertakings in a written contract or
agreement specified in paragraph (b)(5)(i) of the Rule, resulting in an annual burden on brokerdealers of 98,712 hours (approximately 482 hours per broker-dealer per year). 123 The
Commission arrived at the 9 hour per issuance burden estimate after considering (1) the
comments addressing the burden estimates for broker-dealers under Rule 15c2-12 received as
part of the rulemaking process in adopting the 2018 Amendments to the Rule; 124 (2) the MSRB’s
statistics concerning the number of event notices filed on an annual basis; 125 and (3) the potential
volume of documentation to be reviewed under this obligation. Based on these considerations—
and in light of the Commission’s experience—the Commission believes that the estimate of an
average burden of 9 hours per issuance is appropriate.
With respect to broker-dealers effecting transactions in the secondary market, the
Commission continues to believe that Rule 15c2-12 does not contain “collection of information
requirements” within the meaning of the PRA. Rule 15c2-12(c) requires only that a brokerdealer acting in the secondary market have “procedures in place that provide reasonable
assurance that it will receive prompt notice of any event disclosed pursuant to paragraph
(b)(5)(i)(C), paragraph (b)(5)(i)(D), and paragraph (d)(2)(ii)(B)” of the Rule. To the extent that
broker-dealers effecting transactions in the secondary market review and disclose material to
customers, those associated burdens stem from antifraud provisions in the securities laws and
MSRB rules that are not subject to this PRA analysis.
Accordingly, the Commission estimates that the total annual burden for all broker-dealers
will be 101,454 hours (approximately 495 hours per broker-dealer per year), 126 or an average of
9.25 hours per issuance of municipal securities. 127 The Commission understands that burdens
123

10,968 (estimated annual issuances) x 9 (average burden estimate per issuance for
broker-dealers to determine whether issuers or obligated persons have failed to comply,
in all material respects, with any previous undertakings in a written contract or agreement
specified in paragraph (b)(5)(i) of the Rule) = 98,712 hours. 98,712 hours ÷ 205
(estimated number of broker-dealers) = 481.52 hours.

124

See, e.g., Amendments to Municipal Securities Disclosure, Exchange Act Release No.
83885 (August 20, 2018), 83 FR 44700, 44720 (August 31, 2018).

125

See MSRB 2022 Fact Book at 67-68; MSRB 2023 Fact Book at 67-68.

126

98,712 hours (estimate of broker-dealer burden to determine whether issuers or obligated
persons have failed to comply, in all material respects, with any previous undertakings in
a written contract or agreement specified in paragraph (b)(5)(i) of the Rule) + 2,742 hours
(annual estimate for broker-dealers to reasonably determine that the issuer or obligated
person has undertaken, in a written agreement or contract, for the benefit of holders of
such municipal securities, to provide continuing disclosure documents to the MSRB) =
101,454 hours. 101,454 hours ÷ 205 (estimated number of broker-dealers) = 494.9 hours.

127

0.25 hours (estimate of burden per issuance for broker-dealer to reasonably determine
that the issuer or obligated person has undertaken, in a written agreement or contract, for
25

will vary across broker-dealers and across specific issuances depending on numerous factors,
such as the frequency of issuances by the issuer, size and complexity of the issuer, and the
familiarity of the broker-dealer with the issuer. The burden for some broker-dealers will exceed
our estimate, and the burden for others will be less. However, the Commission believes, on
balance, that 101,454 hours (on average approximately 495 hours per broker-dealer per year), is
a reasonable estimate for the time needed for broker-dealers to comply with their obligations
under Rule 15c2-12.
b. Issuers
Rule 15c2-12 indirectly imposes ongoing third-party disclosure burdens on issuers that
determine to engage a broker-dealer to act as a Participating Underwriter in an offering of
municipal securities. Based on information provided by the MSRB to Commission staff, the
Commission estimates that approximately 28,000 issuers will be subject to continuing disclosure
agreements consistent with Rule 15c2-12 over the next three years. The Commission estimates
that such issuers will prepare and submit annually: (1) 49,958 event notices, 128 with each notice
taking approximately four hours to prepare and submit, 129 for an annual burden of 199,832
hours; 130 (2) 65,082 annual filings, 131 with each filing taking approximately seven hours to
prepare and submit, for an annual burden of 455,574 hours; 132 and (3) 3,680 failure to file

the benefit of holders of municipal securities, to provide continuing disclosure documents
to the MSRB) + 9 hours (estimate of burden per issuance for broker-dealers to determine
whether issuers or obligated persons have failed to comply, in all material respects, with
any previous undertakings in a written contract or agreement specified in paragraph
(b)(5)(i) of the Rule) = 9.25 hours per issuance.
128

According to the MSRB, there were a total of 57,779 event notices filed in 2021, 50,125
event notices filed in 2022, and 41,971 event notices filed in 2023. See 2023 MSRB Fact
Book at 66 (covering all three years). 57,779 + 50,125 + 41,971 = 149,875. 149,875 ÷ 3 =
49,958.33. The Commission notes that the relatively high number of filings in 2021 is
likely due to the impact caused by the COVID-19 pandemic.

129

This four-hour estimate applies to the average time needed to monitor, prepare, and file
all sixteen types of event notices included within the Rule.

130

49,958 event notices x 4 hours = 199,832 hours.

131

According to the MSRB, there were a total of 64,349 annual filings submitted in 2021,
64,606 annual filings submitted in 2022, and 66,290 annual filings submitted in 2023.
See 2022 MSRB Fact Book at 67-68 (total annual filings for 2021 and 2022 calculated by
adding monthly totals for “Audited Financial Statements or ACFR Submissions” and
“Annual Financial Information and Operating Data Submissions” for each respective
year); 2023 MSRB Fact Book at 67-68 (same for 2023). 64,349 + 64,606 + 66,290 =
195,245. 195,245 ÷ 3 = 65,081.67.

132

65,082 annual filings x 7 hours = 455,574 hours.
26

notices, 133 with each notice taking approximately two hours to prepare and submit, for an annual
burden of 7,360 hours. 134 Accordingly, the Commission estimates that issuers will incur a total
annual burden of 662,766 hours. 135
c. MSRB
Rule 15c2-12 imposes ongoing recordkeeping burdens on the MSRB. Based on
estimates provided by the MSRB, the Commission estimates that, over the last three years, the
MSRB has incurred an annual burden of approximately 22,000 hours to collect, index, store,
retrieve, and make available the pertinent continuing disclosure documents under the Rule.
Accordingly, the Commission estimates that the total burden on the MSRB to collect, store,
retrieve, and make available the disclosure documents covered by the Rule would be 22,000
hours each year over the next three years.
d. Summary of Hourly Burdens
The tables below set forth the Commission’s estimates of the total hourly burdens for all
respondents under Rule 15c2-12.
THIRD-PARTY DISCLOSURE BURDEN ESTIMATES

10,968
65,082
49,958
3,680

Annual Burden
(hours)
101,454
455,574
199,832
7,360

18,200 136

0

147,888

764,220

Responses
Broker-dealers
Issuers (annual filings)
Issuers (event notices)
Issuers (failure to file notices)
Issuers that use the services of
a designated agent to submit
continuing disclosure
documents
Total Estimates
133

According to the MSRB, there were a total of 3,717 failure to file notices submitted in
2021, 3,579 failure to file notices submitted in 2022, and 3,744 failure to file notices
submitted in 2023. See 2022 MSRB Fact Book at 69 & 72 (total failure to file notices for
2021 and 2022 calculated by adding the “Failure to Provide Annual Financial
Information” disclosure type and the “Failure to Provide Event Filing Information” event
disclosure type for each respective year); 2023 MSRB Fact Book at 69 & 72 (same for
2023). 3,717 + 3,579 + 3,744 = 11,040. 11,040 ÷ 3 = 3,680.

134

3,680 failure to file notices x 2 hours = 7,360 hours.

135

199,832 hours (event notices) + 455,574 hours (annual filings) + 7,360 hours (failure to
file notices) = 662,766 hours.

136

See infra Section 13.b.
27

MSRB RECORDKEEPING BURDEN ESTIMATES
Responses

Annual Burden
(hours)

1

22,000

Municipal Securities
Rulemaking Board
13.

Cost to Respondents

a. Broker-Dealers
Not applicable. The Commission does not believe that broker-dealer respondents will incur
any costs to comply with Rule 15c2-12.
b. Issuers
The Commission acknowledges that some issuers may use the services of designated
agents to submit continuing disclosure documents. Based on information provided by the MSRB
to Commission staff, the Commission estimates that (1) up to 65% of issuers may use the
services of a designated agent over the next three years, and (2) the number of issuers subject to
continuing disclosure agreements with broker-dealers consistent with the Rule is 28,000.
Further, the Commission estimates that the average annual cost for an issuer’s use of a
designated agent is $970 each year. Accordingly, the Commission estimates an average total
annual cost that will be incurred by issuers using the services of a designated agent for the Rule
of $17,654,000. 137
In addition, the Commission acknowledges that some issuers may retain outside counsel
to assist in the evaluation and preparation of some of the more complex event notices. Based on
its experience, the Commission believes a reasonable estimate is that issuers may retain outside
counsel on 1,000 event notices in each of the next three years, while preparing the other event
notices solely internally. The Commission further believes that, for those 1,000 complex event
notices in which issuers and obligated persons seek assistance from outside counsel, one-half of
the burden of preparation of the event notices (including time for monitoring and evaluation) will
be carried by issuers internally (four hours), and the other half of the burden will be carried by
outside professionals retained by the issuer (four hours). Further, the Commission estimates that
the average hourly cost for an issuer’s use of outside counsel is $400 per hour. Thus, the
Commission estimates that issuers will incur an approximate annual total cost of $1,600,000 138
137

28,000 (number of issuers subject to continuing disclosure agreements) x 0.65
(percentage of issuers that may use designated agents) = 18,200 issuers that may use
designated agents. 18,200 x $970 (estimated average annual cost for issuer’s use of
designated agent under the Rule) = $17,654,000.

138

1,000 (number of event notices requiring outside counsel) x 4 (estimated hours for
outside attorney to assist in the preparation of such event notice) x $400 (hourly cost for
28

to employ outside counsel to assist in the examination, preparation, and filing of certain event
notices under Rule 15c2-12.
c. MSRB
The Commission acknowledges that the MSRB may expend annual costs attributed to
EMMA’s continuing disclosure program, including hardware, software, and external third-party
costs. MSRB staff estimates that, over the past three years, the MSRB expended approximately
$341,000 annually on hardware and software costs along with an additional approximate
$897,000 spent annually on external third-party costs such as cloud service provider costs. Thus,
the MSRB expended approximately $1,238,000 annually to support EMMA’s continuing
disclosure program over the past three years. 139
Accordingly, the Commission estimates the total costs to the MSRB under Rule 15c2-12
are approximately $1,238,000 annually over the next three years.
d. Summary of Cost Burdens
The tables below summarize the Commission’s estimate of the annual cost burdens for all
respondents under Rule 15c2-12. 140
THIRD-PARTY DISCLOSURE COST ESTIMATES
Broker-dealers
Issuers (annual filings)
Issuers (event notices)
Issuers (failure to file notices)
Issuers that use the services of a
designated agent to submit
continuing disclosure documents
Total Estimates

Annual Cost
$0
$0
$1,600,000
$0
$17,654,000
$19,254,000

an outside attorney) = $1,600,000. The Commission recognizes that the costs of retaining
outside professionals may vary depending on the nature of the professional services, but
for purposes of this PRA analysis we estimate that costs of outside counsel would be an
average of $400 per hour.
139

$341,000 (hardware and software costs) + $897,000 (third-party costs) = $1,238,000.

140

$1,600,000 (annual cost to employ outside counsel to assist in preparation of certain
event notices) + $17,654,000 (annual cost to employ designated agents to submit event
notices) = $19,254,000.
29

MSRB RECORDKEEPING COST ESTIMATES
Annual Cost

Municipal Securities
Rulemaking Board
14.

$1,238,000

Costs to Federal Government

Cost to the federal government results from appropriate regulatory agency staff time and
related overhead costs for inspection and examination for compliance with requirements of the
Rule. Since the Commission inspects broker-dealers regularly, inspection for compliance with
the requirements of this Rule is a part of the overall broker-dealer inspection. Thus, the
Commission uses little additional resources to ensure compliance with the Rule. Commission
staff estimates that approximately 100 hours of staff time per year are devoted to ensuring
compliance with the requirements of the Rule at a cost of $8,500 per year.
15.

Changes in Burden

The Commission has revised its estimates of time burdens based upon updated market
data obtained since the prior PRA renewal process in 2021:
•

Broker-Dealers Third-Party Disclosure: The decrease in annual time burden for this
collection is due to the estimated average number of respondents decreasing by 45, from
approximately 250 to approximately 205, and the estimated average number of municipal
securities offerings decreasing by 1,492, from approximately 12,460 to approximately
10,968. These changes are derived from recently obtained data showing that, on average,
both the number of municipal securities offerings as well as the number of broker-dealers
acting as a Participating Underwriter in a municipal securities offering have decreased
over the past three years. 141

•

Issuers Third-Party Disclosure: Event Notices: The decrease in annual time burden for
this collection is due to the estimated average number of event notices submitted by
issuers decreasing by 4,163, from approximately 54,121 to approximately 49,958. This
change is derived from recently obtained data showing that, on average, the number of
event notices submitted by issuers decreased over the past three years. 142

141

See supra Section 12.a.

142

See supra Section 12.b. Separately, the annual number of responses estimated for this
collection decreased by 58,284, from 108,242 to 49,958. This decrease is due to the
Commission selecting a time period of “Year” for this collection rather than “Semiannual (2 per year)” as it had selected during the prior PRA renewal process. In the prior
renewal, the Commission had estimated the average number of annual filings to be
54,121 but selected a time period of “Semi-annual (2 per year)” in its submission,
resulting in an approval of 108,242 annual responses (54,121 x 2) rather than the intended
estimate of 54,121 annual responses. Compare PRA Supporting Statement for Rule 15c230

•

Issuers Third-Party Disclosure: Failure to File Notices: The increase in annual time
burden for this collection is due to the estimated average number of failure to file notices
submitted by issuers increasing by 83, from approximately 3,597 to approximately 3,680.
This change is derived from recently obtained data showing that, on average, the number
of failure to file notices submitted by issuers increased over the past three years. 143

•

Issuers Third-Party Disclosure: Annual Filings: The increase in annual time burden for
this collection is due to the estimated average number of annual filings submitted by
issuers increasing by 3,118, from approximately 61,964 to approximately 65,082. This
change is derived from recently obtained data showing that, on average, the number of
annual filings submitted by issuers increased over the past three years. 144

•

MSRB Recordkeeping: The decrease in annual time burden for this collection is due to
the estimated average time that it would take the MSRB to collect, index, store, retrieve,
and make available the pertinent continuing disclosure documents under Rule 15c2-12
decreasing by 3,000 hours, from 25,000 hours to 22,000 hours. This change is derived

12 (February 8, 2022), at 11, available at
https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202110-3235-016
(estimating 54,121 annual responses), with Reginfo.gov, ICR Reference No. 2021103235-016, “View Information Collection (IC): Issuers (Event Notices) Third Party
Disclosure,” https://www.reginfo.gov/public/do/PRAViewIC?ref_nbr=202110-3235016&icID=215165 (approving 108,242 annual responses). Accordingly, this change in
the estimated annual number of responses should be read as a decrease from 54,121 to
49,958 rather than a decrease from 108,242 to 49,958.
143

See supra Section 12.b.

144

See supra Section 12.b. Separately, the annual number of responses estimated for this
collection decreased by 58,846, from 123,928 to 65,082. This decrease is due to the
Commission selecting a time period of “Year” for this collection rather than “Semiannual (2 per year)” as it had selected during the prior PRA renewal process. In the prior
renewal, the Commission had estimated the average number of annual filings to be
61,964 but selected a time period of “Semi-annual (2 per year)” in its submission,
resulting in an approval of 123,928 annual responses (61,964 x 2) rather than the intended
estimate of 61,964 annual responses. Compare PRA Supporting Statement for Rule 15c212 (February 8, 2022), at 11, available at
https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202110-3235-016
(estimating 61,964 annual responses), with Reginfo.gov, ICR Reference No. 2021103235-016, “View Information Collection (IC): Issuers Annual Filing Third-Party
Disclosure,” https://www.reginfo.gov/public/do/PRAViewIC?ref_nbr=202110-3235016&icID=34930 (approving 123,928 annual responses). Accordingly, this change in the
estimated annual number of responses should be read as an increase from 61,964 to
65,082 rather than a decrease from 123,928 to 65,082.
31

from recently obtained data provided by the MSRB showing that, on average, the
MSRB’s recordkeeping burden has decreased over the past three years. 145
The Commission has revised its estimates of cost burdens based upon updated market
data obtained since the prior PRA renewal process in 2021:
•

Issuers Third-Party Disclosure: Event Notices: The decrease in annual cost for this
collection is due to the estimated average number of complex event notices that issuers
may retain outside counsel to evaluate and prepare decreasing by 100, from
approximately 1,100 to approximately 1,000. This change is derived from recently
obtained data showing that, on average, the overall number of event notices submitted by
issuers decreased over the past three years. 146

•

Issuers Third-Party Disclosure: Issuers That Use the Services of a Designated Agent: The
increase in annual cost for this collection is due to the Commission increasing the
estimated average hourly rate for a designated agent by $120/hour, from $850/hour to
$970/hour. This change is derived from adjusting the original $850/hour figure for
inflation.

•

One-Time Cost for Issuers to Revise Continuing Disclosure Agreement: The
Commission’s estimate of issuer cost burdens no longer includes the one-time estimate of
$2,800,000 that was included within the prior PRA renewal process in 2021. The
Commission had previously included this estimate to account for the approximate cost
that issuers would incur to employ outside attorneys to update their continuing disclosure
agreement templates in response to the 2018 Amendments. This cost estimate was a
temporary inclusion that was intended to be shown as a cost incurred only once by
issuers.

145

See supra Section 12.c.

146

See supra Sections 12.b. and 13.b. The decrease in annual cost burden estimated for this
collection is also due to the Commission selecting a time period of “Year” for this
collection rather than “Semi-annual (2 per year)” as it had selected during the prior PRA
renewal process. In the prior renewal, the Commission had estimated the approximate
annual total cost to be $1,760,000 but selected a time period of “Semi-annual (2 per
year)” in its submission, resulting in an approval of $3,519,998 (approximately
$1,760,000 x 2) rather than the intended estimate of $1,760,000. Compare PRA
Supporting Statement for Rule 15c2-12 (February 8, 2022), at 13, available at
https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202110-3235-016
(estimating $1,760,000 annual cost), with Reginfo.gov, ICR Reference No. 202110-3235016, “View Information Collection (IC): Issuers (Event Notices) Third Party Disclosure,”
https://www.reginfo.gov/public/do/PRAViewIC?ref_nbr=202110-3235016&icID=215165 (approving $3,519,998 annual cost). Accordingly, this change in the
estimated annual cost burden should be read as a decrease from $1,760,000 to $1,600,000
rather than a decrease from $3,519,998 to $1,600,000.
32

•

MSRB Recordkeeping: The increase in annual cost for this collection is due to the
estimated average cost for the MSRB to collect, index, store, retrieve, and make available
the pertinent continuing disclosure documents under Rule 15c2-12 increasing by
$183,000, from $1,055,000 to $1,238,000. This change is derived from recently obtained
data provided by the MSRB showing that, on average, the MSRB’s total recordkeeping
costs attributed to EMMA’s continuing disclosure program have increased over the past
three years. 147

•

Federal Government: The increase in annual cost to the federal government is due to the
Commission increasing the estimated annual cost by $1,600, from $6,900/year to
$8,500/year. This change is derived from adjusting the original $6,900/year figure for
inflation.
16.

Information Collection Planned for Statistical Purposes

Not applicable. The information collection is not used for statistical purposes.
17.

Approval to Omit OMB Expiration Date

The Commission is not seeking approval to omit the expiration date.
18.

Exceptions to Certification for Paperwork Reduction Act Submissions

This collection complies with the requirements in 5 CFR 1320.9.
B.

COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
This collection does not involve statistical methods.

147

See supra Section 13.c.
33