What is the purpose of continuing disclosure in the municipal market?

• A. Issuers publish ongoing information after issuance to keep investors informed about financial conditions and risks
• B. Issuers publish annual profit reports for quick investor updates
• C. The purpose is to advertise new bond offerings
• D. It is optional and not required by MSRB

Answer: (A)

Continuing disclosure is the ongoing duty of issuers to provide information after a bond is issued. This ensures investors have timely, accurate updates about the issuer’s financial condition and any events that could affect the securities’ risk or value. It typically includes annual financial information and notices of material events (such as changes in credit ratings, defaults, bankruptcy filings, calls of bonds, or other significant financial developments). This transparency supports informed investment decisions and smoother pricing and liquidity in the municipal market. It is a required obligation under MSRB rules and related securities laws, not a routine profit report or an advertising tool, and it is not optional for issuers.