Market Sighs In Relief

A Texas bond disclosure bank settles a threat to its existence.
August 2007

The municipal market is adapting to yet another change in its system of disclosing information on new and old bond deals. In June, the Digital Assurance Certification LLC and the Municipal Advisory Council of Texas announced that they had reached an agreement that resolves DAC's claim that the Texas MAC's Central Post Office facility was infringing on a patent it obtained last year.

The Central Post Office was designed to serve as a one-stop filing place for issuers' secondary market disclosure documents. The facility collects issuers' documents, and then sends them to the four nationally recognized repositories and three state information depositories. While the suit threatened to close the CPO, under the settlement the CPO will continue to operate but with some technical changes to the way the Texas MAC's Central Post Office goes about its business.

The agreement does not require any payments between the two parties. And the technical changes will not result in major alterations to the nuts and bolts of the Texas MAC disclosure facility--raising questions about what the fuss and the threat to the CPO was all about in the first place.