Investment programs established by states to assist families in saving for future higher education expenses are considered municipal securities under federal securities laws. The MSRB regulates municipal securities dealers that act in the capacity of underwriters of 529 plans, dealers that sell interests in 529 plans and municipal advisors to these plans.
The effective date for the rule change is February 24, 2015. New MSRB Rule G-45 requires 529 plan underwriters to submit new information to the MSRB electronically, including information regarding the plan’s assets, contributions, withdrawals, fee and cost structure and performance. The rule establishes a semiannual reporting period, with the first submission of the additional information due by August 30, 2015, which is 60 days after the end of the first reporting period of January 1 - June 30, 2015.
By collecting this information, the MSRB will be better able to analyze and monitor the 529 plan market, and work with fellow regulators to identify risks and potential wrongful conduct in the market.
The information will not, at this time, be disseminated publicly, though the MSRB’s goal is to disseminate through EMMA at a later date the information that will be of benefit to investors. Prior to any public dissemination, the MSRB will file a proposal with the SEC to do so, which will provide market participants with an opportunity to comment publicly on the proposal.
“The MSRB plans to use the additional data to gain additional expertise regarding the 529 plan market, the growth of plans and their investment options, and the differences among plans in support of our mission to protect municipal securities investors,” said MSRB Executive Director Lynnette Kelly.
The MSRB protects investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. The MSRB fulfills this mission by regulating the municipal securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. To further protect market participants, the MSRB provides market transparency through its Electronic Municipal Market Access (EMMA®) website, the official repository for information on all municipal bonds. The MSRB also serves as an objective resource on the municipal market, conducts extensive education and outreach to market stakeholders, and provides market leadership on key issues. The MSRB is a Congressionally-chartered, self-regulatory organization governed by a 21-member board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is subject to oversight by the Securities and Exchange Commission.