Continuing disclosure consists of important information about a municipal bond that arises after the initial issuance of the bond. This information generally would reflect the financial or operating condition of the issuer as it changes over time, as well as specific events occurring after issuance that can have an impact on the ability of issuer to pay amounts owing on the bond, the value of the bond if it is bought or sold prior to its maturity, the timing of repayment of principal, and any number of other key features of the bond. Each bond will have its own unique set of continuing disclosures, and not all types of continuing disclosures will apply to every bond.

EMMA provides three different categories of continuing disclosure: (i) required disclosures provided by municipal issuers and other parties known as “obligated persons” or “obligors” under contractual agreements entered into under Rule 15c2-12 of the Securities and Exchange Commission (SEC); (ii) voluntary disclosures provided by issuers and obligated persons without any legal obligation to do so; and (iii) advance refunding documents provided by underwriters when an old issue of bonds is being refinanced with a new issue of bonds. These disclosures are described below:

Rule 15c2-12 Disclosures

The SEC’s Rule 15c2-12 rule provides, for most new offerings of municipal securities, that the following types of information be provided to the marketplace:

• annual financial information concerning issuers or other obligated persons, or other financial information and operating data provided by issuers or other obligated persons;
• audited financial statements for issuers or other obligated persons if available and if not included in the annual financial information;
• notices of the following events, if material: principal and interest payment delinquencies; non-payment related defaults; unscheduled draws on debt service reserves reflecting financial difficulties; unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; adverse tax opinions or events affecting the tax-exempt status of the security; modifications to rights of security holders; bond calls; defeasances, release, substitution, or sale of property securing repayment of the securities; and rating changes; and
• notices of failures to provide annual financial information on or before the date specified in the written undertaking

Continuing disclosure information generally is not provided for a new issue where the size of the new issue is $1 million or less; where bonds are sold to investors in units of no smaller than $100,000 ("$100,000 minimum denomination") and are sold to no more than 35 "sophisticated" investors; where bonds are sold in $100,000 minimum denomination and mature in nine months or less from initial issuance; or where bonds are sold in $100,000 minimum denomination and the bond owners can require the issuer to purchase back the bonds at face value every nine months or more frequently. See SEC Rule 15c2-12. For more information about advance refunding documents, see our frequently asked questions about continuing disclosure documents.

Voluntary Disclosures

Voluntary Disclosures Some issuers and obligated persons provide additional items of information after the initial issuance, either under contractual arrangements or as a matter of practice. EMMA will display any of the following additional categories of continuing disclosure if submitted by an issuer or obligated person:

• Additional financial or operation information, including quarterly/monthly financial information; change in fiscal year/timing of annual disclosure; change in accounting standard; interim/additional financial information/operating data; budget; investment/debt/financial policy; material provided to rating agency or credit/liquidity provider; consultant reports; and other financial/operating data; and
• Additional event-based disclosures, including amendment to continuing disclosure undertaking; change in obligated person; notice to investors pursuant to bond documents; communication from the Internal Revenue Service; tender offer/secondary market purchases; bid for auction rate or other securities; capital or other financing plan; litigation/enforcement action; merger/consolidation/reorganization/insolvency/bankruptcy; change of trustee, tender agent, remarketing agent, or other on-going party; derivative or other similar transaction; other event-based disclosures