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Speer Financial Services

Continuing Disclosure Requirements

The Rule
Rule 15c2-12 of the Securities Exchange Act of 1934 requires that issues of certain municipal securities issued after July 3, 1995, and not otherwise exempt from the Rule, to agree in writing when those securities are issued, to provide certain information to the market place for the life of the issue. The information that is agreed to be provided on a continual basis is commonly referred to a continuing disclosure. Under the Rule, it is unlawful for a municipal securities broker/dealer to act as an underwriter of an issue of municipal securities unless the broker/dealer has reasonably determined that the issuer, or its designated agent, has undertaken in a written agreement to provide such continuing disclosure. Information relating to continuing disclosure is to be provided to the marketplace through nationally recognized municipal securities information repositories (NRMSIRs).

What Information Must Be Disclosed?
  1. Audited financial statements;

  2. Annual financial information, which includes updated information from any offering or disclosure document prepared in connection with and used for the securities that have been issued; and

  3. Reportable Events Disclosure.
    The covenants that it will disseminate in a timely manner to the MSRB the disclosure of the occurrence of a Reportable Event (as described below) with respect to the Bonds in such manner and format and accompanied by identifying information as is prescribed by the MSRB or the Commission at the time of delivery of such information. The “”Reportable Events” are:

    Rule 15c2-12 Event Notices
    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, IRS notices or material events affecting the tax status of the security
    7. Modifications to rights of security holders, if material
    8. Bond calls, if material
    9. Defeasances;
    10. Release, substitution or sale of property securing repayment of the securities, if material
    11. Rating changes
    12. Tender offers
    13. Bankruptcy, insolvency, receivership or similar event of the obligated person
    14. merger, consolidation, or acquisition of the obligated person, if material
    15. appointment of a successor or additional trustee, or the change of name of a trustee, if material

    Additional/Voluntary Event-Based Disclosures
    1. Amendment to continuing disclosure undertaking
    2. Change in obligated person
    3. Notice to investors pursuant to bond documents
    4. Certain communications from the Internal Revenue Service
    5. Bid for auction rate or other securities
    6. Capital or other financing plan
    7. Litigation/enforcement action
    8. Change of tender agent, remarketing agent, or other on-going party
    9. Derivative or other similar transaction
    10. Other event-based disclosures
Who Must Comply?
For purposes of the Rule, issuers include almost all governmental units that can issue tax exempt bonds and any “obligation persons” as defined by the Continuing Disclosure Rule. Issuers with less than $10,000,000 in outstanding bonded indebtedness have less stringent continuing disclosure requirements.

What Type of Municipal Securities are Exempt?
Certain small issues, short-term issues, private placements with a limited number of sophisticated investors, and issues with certain tender optims may all be exempt from the Rule

Continuing Disclosure Services Provided by Speer Financial
Speer Financial, Inc. provides continuing disclosure services, as dissemination agent, to approximately 125 clients of varied types under a separate hourly contract for this service.

Disclosing material events are the responsibility of issuers.

Speer Financial, Inc. electronically submits the clients disclosure document to the municipal securities information repositories (NRMSIRs) or the central Post Office (Disclosure USA) prior to the due date, 180-210 days after the close of the client’s fiscal year.

Disclosure requirements vary by security.

Typical Tables
General Obligation Bonds
- Retailers Occupation Tax, if applicable
- Property Assessment and Tax Information
- Debt Information
- Financial Information
Revenue Bonds
- System Data
- System Debt
- System Financial Information
Special Service Areas/
Special Assessments
- Area Debt Information
- Area Tax Information
Installment Contracts/
Debt Certificates
- Same as General Obligation Bonds

Filing – Disclosure documents and audits, or CAFR's, that include all relevant tables, can be filed electronically at http://emma.msrb.org/