SEC Modifies MCDC Terms: Extends Issuer Deadline to 12/01/2014, Lowers Penalty Cap for Small Underwriters; Recognizes Pre-EMMA Limitations


The Securities and Exchange Commission has announced modifications to the terms of its Municipalities Continuing Disclosure Cooperation (MCDC) Initiative (click here for our prior alerts). In a press release issued late in the afternoon July 31, 2014, the SEC modified the terms of the MCDC Initiative by:

  1. Extending the deadline for Issuers and Obligated Persons to self-report until 5:00 p.m. EST December 1, 2014.  The deadline for Underwriters remains unchanged at midnight September 9, 2014.
  2. Reducing the penalty cap for small underwriters by adopting a tiered approach, based on the underwriter’s Annual Audited Report – Form X-17A-5 Part III for the underwriter’s fiscal year 2013, as follows:
    For underwriters with 2013 reported total annual revenue of more than $100 million: $500,000;
    For underwriters with 2013 reported total annual revenue between $20 million and $100 million: $250,000; and
    For underwriters with 2013 reported total annual revenue of less than $20 million: $100,000.
  3. Recognizing the flaws in the pre-EMMA NRMSIR system. Acknowledging that “some municipal underwriters and issuers have experienced difficulties in identifying potential violations” in reviewing compliance during the pre-EMMA years, “the division  will consider reasonable, good faith, and documented efforts” made by self-reporters in deciding whether to recommend enforcement action and, to the extent enforcement action is recommended, in determining relief for “violations identified by the division after the expiration of the initiative.”

For a copy of the SEC Press Release, click here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bracewell LLP | Attorney Advertising

Written by:


Bracewell LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.