In March 2014, the Securities and Exchange Commission (the “SEC”) initiated the Municipalities Continuing Disclosure Cooperation Initiative (“MCDC Initiative”) to provide issuers (including obligated persons) and underwriters the opportunity to voluntarily disclose to the SEC any instances where an issuer failed to disclose in an offering document material non-compliance with the issuer’s prior continuing disclosure obligations under SEC Rule 15c2-12. The self-reporting period for underwriters ended on September 9, 2014, and the self-reporting period for issuers ended on December 1, 2014. To encourage self-reporting, the SEC offered standardized settlement terms to qualifying issuers and underwriters who self-reported.

During the past year, the SEC has entered into numerous settlements with 72 underwriting firms that had self-reported under the MCDC Initiative. On February 2, 2016, the SEC announced that it had completed its enforcement actions against all underwriters who self-reported and further indicated that “[t]he initiative is continuing with respect to issuers who may have provided investors with inaccurate information about their compliance with continuing disclosure obligations.” Although the press release does not provide a date for when the SEC will begin settlement actions with issuers who self-reported, some industry participants have stated that the SEC may have already begun the process of contacting certain issuers. If you are contacted by the SEC regarding a settlement action under the MCDC Initiative, we would encourage you to contact us prior to providing any response to the SEC.