Rule 15c2-12 of the Securities Exchange Act of 1934 (Rule 15c2-12) was adopted by the Securities and Exchange Commission (SEC) in 1989 to establish standards for the procurement and dissemination of disclosure documents by underwriters as a means of enhancing the accuracy and timeliness of disclosure to municipal securities investors. Previous amendments to Rule 15c2-12 incorporated provisions: (1) prohibiting underwriters from purchasing or selling municipal securities in connection with a primary offering unless the issuer and/or an obligated person had committed to providing continuing disclosure (1994); (2) establishing a single centralized disclosure repository for the electronic collection and availability of information regarding municipal securities (2008); and (3) making significant changes to the material event notice requirements and making the continuing disclosure requirements of Rule 15c2-12 applicable to variable rate demand obligations (2010).
In March 2017, the SEC published for comment proposed amendments to Rule 15c2-12, which focused on material financial obligations that could impact an issuer’s liquidity, overall creditworthiness, or an existing security holder’s rights. A wide range of commenters sent comment letters to the SEC in response to the proposed amendments and encouraged the SEC to consider narrowing the scope of the proposed amendments to avoid overburdening market participants.
On August 20, 2018, the SEC announced that it adopted amendments to Rule 15c2-12 (the 2018 Amendments) in substantially the form as proposed with some revisions, including the deletion of the broader language which would have included all leases and any “monetary obligation resulting from a judicial, administrative, or arbitration proceeding.”
For an overview of the 2018 Amendments and relevant guidance from the SEC, click here.