Availability and Review of Official Statements (SEC Rule 15c2-12)
SEC Rule 15c2-12 prohibits dealers from buying or selling any municipal security that is not accompanied by an official statement and a pledge of continuing disclosure. Dealers engaged in underwriting new issues of municipal securities are also required to exact a pledge from the issuer to provide an official statement and continuing disclosure agreement.
The official statement provides details of the new issue and the financial characteristics of the issuer. It must be prepared prior to pricing the issue and kept current until the end of the underwriting period. The preparation of the official statement is completed in two steps:
- 1. The preliminary official statement describes the pertinent details of the issue before its price and interest rates have been determined.
- 2. Once the pricing elements have been decided, they are added to the preliminary official statement, and the new document is published as the final official statement.
The preliminary official statement details the purposes and essential terms and conditions of th