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Know-How: How to Get to Know EMMA

One website has solved a huge problem in the municipal-bond market.

Jeff Westergaard, 08/29/2012

Finding information on municipal bonds can be a difficult and frustrating task. Munis are not traded on an exchange, so information is not as readily available as it is for stocks and exchange-traded funds. Besides being a headache, this lack of information also created an unlevel playing field. Some muni-market participants were privy to information others lacked. To address this problem, the Municipal Securities Rulemaking Board, which is in charge of regulating the market, created a website containing a wealth of information about municipal bonds. It’s called Electronic Municipal Market Access, or EMMA.

Addressing the Need for Transparency
MSRB’s goal in creating EMMA is to provide municipal-bond investors with the necessary tools and information to be able to make smart decisions. In other words, the group hopes that EMMA makes the municipal-bond market more transparent.

EMMA is packed with educational materials, documents related to bond issuance, financial statements, trade information, alert messaging functionality, and many other features—all things previously unavailable to investors or scattered around in different places in the market.

How EMMA Solved the Problem
Because it is the regulatory authority for muni-market participants, the MSRB can mandate that issuers submit information to its central data depository. EMMA makes this database fully searchable.

Some of the key types of information that EMMA provides are:

  • Offering documents.
  • Descriptive information on individual bonds.
  • Trading price and yield information.
  • Material event notices.
  • Credit ratings.


Investors also can find educational materials and videos, statistical reports on the municipal market, and information regarding 529 college-savings plans, which the MSRB also oversees as regulator.

Using EMMA
EMMA’s interface is well designed and fairly easy to use. Investors can search for information by either using descriptive terms such as state, issuer name, maturity, coupon, or rating. Searching by CUSIP is also supported. How deep you want to go will depend on your sophistication and the type of information you need. EMMA’s database holds very specific information on issuers, bond issues, and individual bonds.

For example, investors can analyze issuers based on their financials and economic strength, and they can get the terms of a bond issue, such as the issuer’s legal authority, source of payment, and use of proceeds. EMMA’s continuing disclosure documents provide updated financial information, event notices that may have been filed, and rating-change notices. It also issues trade activity reports for individual bonds that go back six months.

Armed with all this information, muni investors can perform the kind of credit-quality analysis and price discovery they need to make informed investment decisions.

Last but not least, investors can set up alerts and messaging in EMMA to keep abreast of new events in the muni market and to be notified when information is added to the site.

Summary
With EMMA, the MSRB has provided muni investors with valuable tools and data. The wealth of information available in one centralized place is extremely helpful in a market as diverse as the municipal-bond market. Investors now can get answers to many of their questions about the muni market. In short time, EMMA has become an essential tool for muni investors.

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Jeff Westergaard is Morningstar’s director of municipal analytics.

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