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Panel II: Use of Electronic Media2000 Municipal Market Roundtable United States Securities and Exchange Commission Ms. McGuire – I'd like to welcome you back from lunch. The SEC, with its fine budget, has, of course, not sprung for lunch, but I hope you found the eateries. I personally was at McDonald's. We're not allowed to lobby for pay parity, but be nice. Seriously, and apropos of that, the views I express today are my own and not necessarily those of the staff of the Commission, although that last one probably is -- the Commission, as a whole, they are my own. And that disclaimer also goes for Amy Starr, my colleague on the staff of the Commission. I am the chief counsel of the Division of Market Regulation. And I have been with the Commission for 27 years. And I began working in the municipal securities area with the enactment of the 1975 amendment, which gave the Commission authority to regulate municipal securities dealers. And at that time, enacted the Tower Amendment, an amendment widely believed to preclude the SEC from having anything to say about municipal securities disclosure. But John Evans, a man who's still alive, Commissioner John Evans, who negotiated the Tower Amendment, knew better and he left in speeches clear guidance that he believed that the Tower Amendment did not preclude the SEC from doing what was necessary to prevent fraud, and the municipal securities market, including in the area of disclosure, and that belief was the genesis of Rule 15C2-12. First the first original 15C2-12, which related to Official Statements, and developed that disclosure system, and then the amendments to Rule 15C2-12, that modified that to extend to a continuing disclosure system. So we look back 25 years ago and see John Evans and his colleague, Al Summer, who both gave speeches about the need for disclosure in the muni market, and see what has come today to now this panel, which is about the Internet and the implications of the Internet for the municipal securities market, the regulation of the dealers. Brokers I think have more of a role than ever before. And investors who trade, there's a bigger opportunity for data dissemination than we've ever seen in the past. The buy side has access to more information more cheaply. Probably never as much information as they would like, never as cheaply as they would like. The sell side has probably, I hope we'll find out, access to more customers. And hopefully prices are more competitive. We'll learn more about that. So I think that this is a very, very interesting opportunity. I'd like to ask the panelists today to introduce themselves, because I know that -- I've just told you about my history with the muni market and how I came to Internet issues, and I think each of you has an interesting history and approach to. And perhaps we can start with you, Mr. Wittman. And just kind along through over to you, Mr. Deane, and we'll begin the panel that way with an introduction of your background. And start there, and then we'll begin our discussion. Thank you. Mr. Wittman – My name is Harold Wittman. In the financial world, I'm a certified financial planner. And I'm secretary and a member of the Board of Directors of the American Association of Individual Investors. I personally am involved in buying and selling equities and municipal bonds for myself and for other people and clients and advise them in reference to this particular matter. Mr. Hayes – I'm Roger Hayes. I'm with Banc of America Securities in Charlotte, North Carolina. I started in the municipal business as a municipal salesperson in 1972. I know lots of you here weren't born then, but that's how old I am. I've been involved with trading, underwriting, public finance, and obviously sales. In the mid '90s, I was on the Municipal Securities Rulemaking Board and chairman of that I guess in '96 or '97, somewhere back in then. And currently I'm on the Bond Market Association. I serve as vice-chairman of the municipal division right now, and am chairing a task force on electronic delivery or e-commerce issues in the municipal market. While I was chairman of the MSRB, I will never forget making a comment to Lynn Hume, over at the bond buyer. She questioned why the MSRB didn't just make a rule about this or that. And I said, "Lynn, the MSRB wants to be very judicious and careful about any rule it makes. As a matter of fact, there are people in the industry who already believe we've got too many regulations. It's just almost too complicated." The next morning, in the Bond Buyer, there was a headline that said, "MSRB Chairman Hayes believes the municipal market is over-regulated." By 9:00 that morning -- fortunately I didn't pick up the phone, because had I done so, I'd have had a heart attack. But on my voice mail was a call that said, "Roger, this is Chairman Levitt from the SEC. I would advise you to call me immediately." And so it is with some trepidation that I am here speaking on an SEC panel but I hope everything is going to work out okay. Mr. Green – My name is Jeff Green. I'm general counsel of the Port Authority of New York and New Jersey. And before I go into my background in defense of my friend, Lynn, who just walked in while you were talking, Roger, she would tell you that she didn't write the headline. Mr. Hayes –Oh. Oh, okay. Mr. Green – I've been involved in the municipal market since 1969 through my activities both at the Port Authority and with GFOA. And I was very active with GFOA from about 1979 until the present, including chairing their disclosure task force and with my good friend, Robert Doty, who's on the next panel. We basically co-authored the last set of disclosure guidelines, which were referred to in this morning's panel. I've also worked with the 10 and 12 groups that assisted the SEC in the adoption of Rule 15C2-12, and some of the implementation issues that have come up since then. Ms. Starr – I'm Amy Starr. I am a special counsel in the Office of the Chief Counsel in the Division of Corporation Finance. I have been at the Commission now for about eight years, and actually had my first experience with the muni market with the interpretative release from '94, and the amendments to 15C2-12 in '94. So have had the wonderful opportunity to work with Jeff and others in this room since then, and I am what one would call the point person in CorpFin for muni issues and work closely with Kate on all these points. And I will be giving you the CorpFin side of the world in the electronics areas. Mr. Wendt – – My name is Brad Wendt. I am president and chief operating officer of BondDesk.com. BondDesk.com is an Internet-based platform focused on retail distribution of fixed-income instruments. BondDesk.com has two broker-dealer subsidiaries. One for trading taxable products, which is called BondDesk.trading. And also one broker-dealer for trading municipal securities called MuniGroup. I've been in the fixed-income markets for 15-plus years, both at Goldman Sachs and at Merrill Lynch. We are not trading as of yet in either broker-dealer subsidiary but we hope to be trading in the not-to-distant future. Ms. Hyman – My name is Ursula Hyman. I'm a partner at Latham & Watkins out of the Los Angeles office. I'm also a member of the State of California Debt and Investment Advisory Technical Task Force and we'll be looking at many of these issues this year as well. In addition, in the wake of the Orange County bankruptcy, which is where I first came to know Paul Maco, I chaired a municipal task force on Chapter 9 reform. Mr. Deane – Good afternoon. My name is Joe Deane. I'm the managing director at Salomon Smith Barney in New York. I've been managing money now for about 17 years. I've been in the business for 30. And at the moment I'm managing approximately seven and a half to $8 billion in long assets and about $14 billion in short-term money market instruments. And after listening to this panel, I'm assuming that I'm representing the plain English version of investment at the moment. We're pretty well known in the industry for being fairly aggressive managers of money. And there are a number of issues that I think it's going be very interesting to discuss today in terms of the Internet. I think there are some real positives. I think there are some real questions and I would hope that we get to address both of them today. Thank you. Ms. McGuire –That's great. Would you like to tee up? What are the positives? Mr.. Deane – You know, it's funny. I think probably, you know, Harold and I represent what I would refer to in our industry as the end users of the product. You know, you can issue them. You can talk about, you know, disclosure. You can underwrite them. You can bring them to market. You sell them and everybody basically is giving each other high fives. And then our job begins. We own them and we have to follow them and we have to find out what's happening with the credit, what's happening in the secondary market. And I think -- I would say just from a market perspective, and I'm not sure exactly how Harold comes out on it. I think from a positive perspective, I think that the individual investor, I think it is going to, if they're knowledgeable enough with the Internet, to have access to a lot more information perhaps than they've been involved with before. I will tell you from an institutional point of view, if you are a very plugged-in, you know, large manager of money today. The only difference that the Internet provides you with is that it may provide you with an electronic means of obtaining what you're already getting. I mean if you are well plugged in to most of the people on the street, if you have your own research department, which we do, then a lot of what the individual investor, you know, may get the initial access to across the Internet is probably something that we've been getting for a fairly long time. I think the question, the positive question, that has to be asked is, will this give you the opportunity to access more individual investors out in our marketplace. And I think if it does, I think that potentially could be a positive. But I don't think that's a given. I think that's a question. Ms. McGuire –Harold, do you have a view on that? We're all essentially speaking, I agree with what you have to say. The marketplace has gotten very affluent for the average person in light of the economic condition. People are looking more and more into two specific areas. They are looking for income capability that, quote, "has some tax advantages on their behalf." The information for these sorts of things is very difficult to come by because it isn't made public. But the advent, however, of the electronics and the Internet, the whole picture I feel definitely changes. Especially by virtue of the fact that recently electronic signatures now aren't considered valid and legal in a sense of documentation. Personally the difficulty in bond instruments or any type of lending instrument has always amazed myself and the people I deal with that while equities constantly update their information, give out quarterly reports, annual reports, without being asked to do so, the municipal bondholders seldom, if ever, get any kind of information or documentation as to the status of their holdings. I mean if something could be rated AAA when they buy it, and it might get down rated for credit to a B, the average holder of that municipal bond has no idea that such an event even occurred, which is certainly detrimental to his basic interest. Ms. McGuire –Oh, I'm sorry. Go ahead. Mr. Wittman – : And I think the Internet will certainly serve the purpose if full disclosure is permitted with Safe Harbors that maybe this will help alleviate that type of a situation for those that are interested. Ms. McGuire –Jeff, do you want to describe how you use your Web site maybe to meet these informational needs? Mr. Green – Well, yes. We really at this point are not using our Web site to the maximum potential that it's there for because really the use of Web sites for this purpose is in its infancy. I think one of the things that we have to look at, and I'd just like to set out a few general principles, if I might, is that one of the things the SEC needs to consider when it considers the municipal market and electronic disclosure is that most investors have access to the Internet. I realize that some of the statistics are that maybe half the country has access to the Internet, but half the country does not translate into half the investors. I mean the vast majority of the investing public and the users of the information or the intended recipients of the information probably have access to the Internet. Second, that information on Web sites and other electronic disclosure should be treated no differently than paper disclosure. Third, and it was a point that was made this morning. The fact that information is available on a Web site or over the Internet could mean that there's more information available. And that should not mean that there will be more confusion in the market. And we have to be careful to have a proliferation of information result in confusion to the investing public. We must be careful not to over-regulate the use of the Internet. And I think that the SEC really needs to take steps to clarify the controversy over whether Official Statements or other archival material on a Web page is republished every day or every time somebody accesses it. And most important perhaps is we have to make sure that the costs to issuers are kept to the bare minimum. Particularly for the small general government issuers. The large frequent issuers, the cost are not likely to be a major factor. For the conduit issuer, the cost is not likely to be a major because somebody else is going to be paying for it. But for the small general government, the small town, the small village, that most of us are taxpayers to, we have to make sure that their costs and their access to making the information available is kept to an absolute minimum. And lastly, I think the SEC needs to permit reasonable disclaimer language so that you can clearly segregate what information is market-based information and what information is marketing information for the municipality. And with those general principles in mind, I think that the use of the Internet disclosure will grow dramatically and will help facilitate trading in the market because I believe that more information in the marketplace leads to greater liquidity. Ms. McGuire –Ursula, did you have something you wanted to add to that? Ms. Hyman – I think Jeff's point is somewhat built off of Harold's point. The republication issue is very serious. And the idea is that every time you open up a document on the Web site, it's as though it's republished and so the Statute of Limitations starts to run again with respect to that disclosure. However, if you went to a NRMSIR, and you took down the original OS, under which a security was issued, you don't start a new publication. And yet we're saying -- or we're actually providing a disincentive to our issuers to not make information available to our individual investors, like Harold. Harold and I were talking before this panel, and he said "Well, all the continuing disclosure is there. The problem is with the NRMSIR and the individual investor doesn't have access," and he said something which is a challenge to the two bankers here, and said, "You call your brokers and you say you want the continuing disclosure information, and they can't be bothered." There's no money in it for them to get it. There is no incentive to provide the service. And yet in the way the rules are starting to be generated, the envelope concept with respect to how things are included, the issues with respect to hyperlinks and what happens if you're linked to another site, inclusion of information. All of these if we aren't careful will actually provide disincentives to our issuers to use this medium. Ms. McGuire –Joe, I want to give Amy a chance to drive a stake through the heart of these things if she can. Do you have something short or long? Mr. Deane – Just very brief, very brief. Because I know what we were talking about before is, you know, granted only 50 percent of the people have access to the Internet, but a lot of them aren't investors. I want to make a distinction here between access to the Internet and the ability to use it. Ms. McGuire – Right. I can't tell -- Mr. Deane – I mean the ability to play solitaire on your computer does not make you Internet accessible. And I think that there's a very, very big difference between people who are competent on the Internet and people who are investors with the ability to access it. Ms. McGuire – Harold, do you have something quickly? Mr. Wittman – I just want to add one more comment, and it may be premature but I'm sure you'll address it. Not only do you have to have access to the Internet, not only do you have to be capable of utilizing the access, but the language has to be legible for the average investor. Legalese just drives me crazy. They want it in simple plain English. Ms. McGuire –Right. I think we should take that one up next. There's been a lot of words thrown around here, envelope theory. I think Ursula did a really good job of explaining republication. And a few others. Maybe, Amy, can you go through that list? Ms. Starr – Yes, I want -- Ms. McGuire –And talk about what the SEC has said and this in reality. Ms. Starr – Yes. What I want to do is -- I'm going to start with the republication issue that I know is in the forefront of everyone's mind. As you probably are all aware, the Internet release came out of the Division of Corporate Finance. And one of the issues that there was a question raised on to solicit comments was the concept of the ability to access historical information. The discussion in the interpretative release that mentioned the republication issue was only intended to acknowledge that the republication issue existed and to solicit the thoughts of market participants and others as to how issuers can set up procedures, such as archiving, dating, putting exit screens, et cetera, to avoid investor confusion of what the historical information is intended to communicate. The implication that the Commission was endorsing republication was not the intention of the interpretative release. The question is how do you post historical information, allow it to remain on Web sites, and avoid investor confusion. I have been advised to advise you that at this point we should not expect the staff, or at this point I don't know that the staff would recommend that the Commission would take action to repudiate any discussion that was in the interpretive release, but it was not intended to have the Commission sanction republication, the republication theory as necessarily applicable to all Web site content and accessing historical information. To the extent that the staff recommends that the Commission do anything in this area, it's going to be most likely to provide guidance on how issuers can use archiving and other means to minimize investor confusion and any implication of a duty to update historical information. I hope that that clarifies somewhat the bogeyman that's been out there that the Commission said that republication exists in every case, that there's never anything that you can do to avoid an issue that the courts have raised in the context of whether there's a duty to update or a duty to correct information. Our goal in the interpretative release, as I note, was to solicit thoughts and comments. I think that everyone recognizes that the electronic medium and the Internet is a very dynamic and changing medium. And the Commission and the staff of the Commission has every intention to make sure that we keep up to date and keep current and keep accurate with how the use of the medium fits into the liability and disclosure schemes that we're charged with regulating. Mr. Green –Without putting you on the spot or trying to pin you down, we're trying to help clarify the issue, Amy. If I could just read you two sentences and maybe ask you to clarify one of them. Ms. Starr – Are you talking about from the release itself? Mr. Green –From the release. Ms. Starr – See, that -- I think -- if I know what you're going to refer to, you're referring to the exact language from the release that talks about republication. Mr. Green –Yes. Ms. Starr – As I understand that perhaps the language was not as carefully crafted as it might have otherwise been, because there was no intent to give the implication that the Commission adopt the republication theory as the legal theory of the Commission. And this is as I understand it. From my folks on the electronics side in CorpFin, and so they wanted me to be sure to get that message across. Ms. McGuire –So basically what I'm hearing, and remember, these are my own views, not the views of the Commission, but what I'm hearing is that in writing this document, when we got to the question section, we reported about a legal theory that the courts had adopted and we asked people to comment about how to deal with that. Ms. Starr – Well, it's not even that the courts had adopted because I don't even believe that there's been any courts that have necessarily spoken to the issue of republication to date. I think it was issues that were raised by a number of legal commentators as to a potential issue that might arise when you transfer the paper world in the electronic world and accessing information. Ms. McGuire –So with just the talking heads. Ms. Starr – Based on my understanding perhaps, yeah. Mr. Green –The sentence that seems to trouble most people, and I think you've dealt with it, is there's one sentence which is the second paragraph of the questioned paragraph dealing with access to historical information, which begins with the words "Commentators have suggested that if" statement. But it's the immediately prior sentence in the prior paragraph that begins -- and this is one that's not been commented on much, "In effect, the statement may be considered to be republished each time that it is accessed by an investor, or for that matter, each day that it appears on the Web site." Without putting words in your mouth, I take it you're saying that that is not the position of the Commission. Ms. McGuire –It may be considered by those commentators that we're going to refer to in the next paragraph. Mr. Green –Yes. That's what I thought I understood and I appreciate your expressing your personal views on that, both of you. Ms. McGuire –I think there are two other really good words used that I'd like you to describe, Amy, if you would. The next word is the word "hyperlinking." And actually we received this specific question, which I could read to you maybe -- Ms. Starr – Okay. Ms. McGuire –-- so that you could get a chance to have a drink of water or hear somebody else's question. An opinion. "It is useful for investors to access information linked to issuer's Web site. Please discuss the status of linked information vis-a-vis Official Statement and information directly published by the issuer. In the Internet medium, why shouldn't links be allowed and let the investor weigh the source of the validity of the information?" Ms. Starr – I think the first answer is, is there's no prohibition on hyperlinking information from your Web site to another Web site. You have a couple of issues that arise in the muni context as well as in the registered context, because they arise under the anti-fraud provisions of the federal securities laws. If you have information -- if you have a Web site up and you hyperlink to other information -- I'll give two examples. One is you'll hyperlink to analyst report saying how great the bonds are. And another example is you hyperlink to the community calendar. In looking at the information that you're hyperlinking to and the reason for the hyperlinking, the questions become why have you hyperlinked? And do investors understand what you hyperlinked? The next issue that relates to it, and what have you done to protect yourself so that people don't think that this is your information? So that you're putting into context the reasons for the hyperlinking. One of the issues that comes up in the first example where you're hyperlinking, for example, to an analyst report, is have you, by the hyperlinking, effectively made that analyst report your own. And some of you may be familiar with -- there are two legal theories under which an issuer can have liability for analyst reports and others, and it's known as the "entanglement theory" or the "adoption theory," depending on when you are involved with an analyst report. But, you know, are you effectively saying, "Look. I'm going to tell you to look at the analyst report because they're providing information about my bond. So really haven't I said, you know, focused you for purposes of, you know, as an investor to this report because I want you as a trading market to understand specific information." The issue is am I liable for that information? You know, if you are cherry picking, you're saying, "Look at this analyst report but don't look at the negative guy." The likelihood is is that you may be in a situation where you in fact, you know, are becoming liable for the information depending on the role that you play. I think there's another issue though is what is -- if you're hyperlinking to another site, and have you adequately described or viewed the other site to determine what's on there. One of the areas that's discussed in the electronics release again is the liability or responsibility for information on somebody else's site. Somebody asked me the question, "Well, if I hyperlinked to one site and they have hyperlinked to a second site? If I get comfortable with the first site, am I going to have liability for the second site?" And generally we would say that, yeah, you know, you probably should be concerned to the extent that there are hyperlinks, but I think the farther away from the issuer that you get, the more remote it is that anyone could really claim that they relied on that information in, say, buying your bond. Ms. McGuire –Isn't there a rule of reason here though again. First of all, the way I read the electronics release, you look at hyperlinks that are included in offering documents are looked, scrutinized, very carefully because that's something you consciously put in. You said, "This is a part of my presentation to sell these bonds." Ms. Starr – You've actually made a part of your Official Statement if you have a hyperlink in your OS. Ms. McGuire –So as I understand it, the main focus is really understanding, you know, what's the context and what's the potential for investor confusion. And so the more removed it is, if it's a community Web site with a lot of information, some labeled financial, some labeled community calendar, then the link from the community calendar aren't going to be viewed as of a concern because you've already labeled it up in front that -- Ms. Starr – There are some areas that you look at, right. Ms. McGuire –You're not -- I mean this is not rocket science here. I mean first of all, we've only got 800 enforcement guys. We're not going to make it all the way to the end of the community calendar in the fourth hyperlink. I'm here to tell you. So at some point you have to apply a rule of reason. Amy can't give you a pass. For that, neither can I. Ms. Starr – I mean I think you also do need to make a big distinction between the information that you're hyperlinking to from your Web site that may be sitting next to your OS. And hyperlinks that are actually what we'll call embedded hyperlinks, those are the ones that actually are contained in your electronic OS. You pull up the electronic OS. There's a line WWW. You click on that and you go to somebody else. Well, by having that active hyperlink in there, you've now taken all that information and put it into your offering document. And by putting that into your offering document, you're assuming the responsibility for it and the liability for it. I think that's something very important for people to understand. The fact that you have any link to your community calendar sitting next to the link to your Official Statement on your Web site is a separate issue from when you have hyperlinks that are contained within your document itself. Ms. Hyman – But, Amy, isn't there even a difference there? I mean you can have an embedded hyperlink, but if the appropriate disclaimer is around it, and perhaps you jumped to an intermediate screen, it makes it clear -- Ms. Starr – Well, we would never say that an embedded hyperlink can be disclaimed. Ms. Hyman – In the '33 Act? Ms. Starr – In fact, from a '33 Act standpoint, absolutely. I mean for purposes of 15C2-12, to the extent that you have an embedded hyperlink, it's effectively you are in fact making that document that you're hyperlinking to cross-referenced into your Official Statement. So that you are in fact then making it part of your Official Statement because your Official Statement is a document or set of documents. Ms. Hyman – Well, this is where the challenge becomes with respect to, again, making the ease of the information and the securities laws -- we always are all pleased to say, "Well, this is the process and the procedure and it doesn't affect the law," but what's happening as the process and the procedure in and of itself is having an impact on whether or not we've got a fraudulent disclosure rather than the disclosure itself. And so let me use the example of there are four or five analyst reports out there. You, as a good issuer -some are good, some are bad -- you as a good issuer though want to make sure everybody has all of the same disclosure. You embed those and you go to an intermediate page that says, "These aren't ours. You understand you're leaving our Web site. You're going to another site. These are independently prepared." Having that be an ease for the -- Ms. Starr – But the thing you have to always keep in mind is you're selling securities. And in selling securities, I must -- my personal reaction is if I saw any document offering securities that had an embedded hyperlink to an analyst report, one of my first phone calls would be to the issuer saying, "I suggest that unless you want to assume liability for everything that's contained in that analyst report, you may want to consider redoing your Official Statement and redoing your offering." And if the answer to that is, "Well, no, I'm not going to do that," then my next call may go to the eighth floor to Enforcement, to say, "I think there's a significant problem here. We need to assess whether or not there's going to be liability to the issuer because -- and what I'm talking about is embedding it in your OS. Not having it on your site. Ms. McGuire –Ursula -- Ms. Hyman – We actually haven't used it because of the concerns that Amy has raised. But we were doing some hypotheticals earlier today and it seems as though, again, if there are four or five analysts' reports, we were talking to some individual investors who said, "I don't have access to get four or five. I can't get the rating agent to report. I can't get this. Gee, I'd like it, that I could go to the Web site and then reading one document and it could take me back and forth and I could read them." The idea is, again, can we -- I mean this is a new age for all of us. Can we find a way of using the process and the procedure in such a way to ensure complete disclosure but without enhancing liability for our issuers who are -- and that I think is a challenge that none of us have answered. Ms. Starr – Well, I think that you have to distinguish between information that's hyperlinked from your Web site and information that's hyperlinked from your Official Statement. Because notwithstanding the fact that you want to have more information out there for people in order to have the totality of information. As I say, you are offering securities. The fact that you're doing it electronically is no different than you're doing it on paper. So I would look at it and say by having that hyperlink in there, as if you took the paper analyst report and slapped it to the back of your OS and delivered it. Mr. Wittman – I would never do it. Ms. Starr – And you'd never do it.Mr. Wittman – Never do it. Mr. Green –But if you accessed it from another part of the Web site with appropriate disclaimers, maybe with a separate page or a pop-up screen, that would be okay. Ms. Starr – And you have -- well, I think the electronics really did deal with the issue of having hyperlinks to sort of the whole broad range of every type of report available on a company with -- right, exactly. With the various exit screen, et cetera, as mechanisms to avoid you taking the responsibility for the information that you're accessing through because you're going from one site to another. Mr. Green –Let me ask you a question. Let's assume that I ignore your advice not to embed the hyperlink into my Official Statement, and I do it anyway on the Internet. And the embedded hyperlink contains another hyperlink, and it's not to a community calendar. Am I adopting that as well? Ms. Starr – It could all be part of your -- I mean in looking at it? Mr. Wittman – What if there's no embedded hyperlink on the day I put it in the Official Statement. I put an embedded hyperlink into my Official Statement but there's no second hyperlink embedded in the second one, but one is embedded subsequent to my putting the embedded hyperlink in. Ms. McGuire –I want to let Ursula explain what the envelope theory is, but first I want to let Harold -- I'm not going let Amy answer this question yet, Jeff. I want to let Harold talk for a minute about his reaction to the individual investor's need for these analyst reports or whatever else he wanted to say, because he's been waiting awhile. Mr. Wittman – In reference to what Amy had to say about these hyperlinks. It's easier to issue -- one is the disclosure of the issue and marketing of the issue. I think we're talking about two separate entities, to be perfectly honest and to use your term, Amy, it is selling securities. Now, if Safe Harbor language is used correctly, you can hyperlink in my opinion to any place you want to to providing you preface the entry to the hyperlink with a disclaimer, if you will, or with informed consent, if you will, to protect the issuer from having to take ownership of that particular issue. Ms. Starr – Well, the only thing I'll modify in that is you don't have a Safe Harbor. Mr. Wittman – All right. Ms. Starr – There's nothing safe about it. Mr. Wittman – Okay. What I was trying to say, of course, is the fact that you're trying to disclaim ownership to particular opinions referenced by the hyperlink. Because one is definitely a marketing thing. The other one is disclosure of the issue itself. Ms. Starr – I think the only thing that the electronics release also dealt with was the validity of disclaimers and the circumstances under which they actually can operate to reduce, mitigate or eliminate liability, and I think that that really is going to depend on the specific facts and circumstances of what's being hyperlinked to, where it's being hyperlinked from, what's involved in the information. So I think it's hard to make a generalization that disclaimers don't work in all cases or work in all cases. It really is two facts and circumstances dependent. Ms. McGuire –How many people in the audience are bond lawyers? Show hands. Not enough. I find that bond lawyers really love these debates. Really. I've never found a group that could -- really, just step back. And so I'm going to exercise the prerogative of the chair and cut off the hyperlink discussion. We can continue among the bond lawyers afterwards. So we won't explain the envelope theory. And we won't answer the question about embedded hyperlinks on a written OS. They are all good questions. I think what we're trying to say is that outside of the OS, there's a rule of reason. Inside the OS, it's really dangerous. Okay? Simple rule for simple people. For more complex, afterwards in the corner. Joe, you had some positives and some negatives, and I'd asked you to start with the positives. Could you give us a negative? Mr. Deane – I think when you look at the Internet as a medium of marketing, okay, especially when you take it down to the level where the individual investor is. Any question they need answered, I can get answered. Any perspective I need to get, I can get instantaneously. I don't have to really worry about getting them. I think people on Harold's side, the Internet may be able to help you a little bit in getting some of that information that I can get instantaneously. But the thing is, once you start and you get past all of this stuff, and they're out in the secondary market, there are two or three things that kind of strike me. And number one, if there's a new issue that's coming out over the Internet, which has happened once or twice, the first question as an investor I ask is, "Who did the due diligence on this deal?" And, you know, speaking of the mayor of the city that issued the deal, on the phone with him one day, I couldn't get that answer. Except "Me." And he goes, "If I've got to go sue you, what good does it do me? You're city hall." And if the whole theory is correct, you can't sue city hall. Then I'm in trouble. Number two, it actually brings up a host of questions. I'll give you the simplest one in the world. As a fiduciary, I have a very, very large dealer operation. I own one of the two biggest in the industry. We're Chinese. We don't talk to each other. You know, we have no conversation other than "Hey, hey, nice day. Hey, nice day." Other than that, we don't do any business. The question is, if you're going through some form in the future of an electronic medium, especially to the extent where the person on the other side of the trade is a blind trade individual, you could very easily be doing trades with your own dealer operation, which, number one, at the moment, technically are forbidden. I'll give you another one that really concerns me. There are firms in our industry that I have cut off permanently for doing some really rotten things. I wouldn't want to give them the benefit of a single trade for the rest of my life. Even blindly. Certainly not stupidly. Those are two questions I've got. And number three -- look, I'm not going to make the point too obvious, but, come on. I mean I know what bonds are worth. I know what bonds are worth better than most people in this business on a daily basis. So if I see something and it's an eighth or two higher or a quarter or two higher, I'm going to know that. I mean there are going to be people buying bonds over the Internet that wouldn't know a bond from a cow. And they're not going to get within 25 or 30 or 40 basis points of what the bond is truly worth. You know, the classic example is, you know, you go around and you talk to your friends. You know, everybody -not everybody, but a lot of people have access to the Internet and you'll find that people are going, "Oh, you know, I did a trade across the Internet, but I really know stocks." "Oh, you really do?" "Oh, yeah. I'm really knowledgeable." And you'll hear some people say that. When was the last time you went to a cocktail party and some guy came up and said, "You know, I'm really knowledgeable on municipal bonds. I know them like the back of my hand." The question is, I think you're dealing in a medium that I don't believe personally, especially for the individual investor, sets up real well. I think the U.S. Treasury market, for one, and perhaps the Ginnie Mae, you know, Fannie Mae-type of market, because it is a single generic issuer. You have Uncle Sam and all of your other issuers are Uncle Sam. In most cases, 85 to 90 percent, probably 95 percent of the debt that's been issued by the Federal Government is non-callable. So you have a phenomenally generic bond that if you do know anything about interest rates, potentially you could know something about a straight U.S. non-callable Treasury in two years. But you start talking about housing bonds with prepayment calls. You start talking about bonds with letters of credit backing them up. And then you generate that down to Mom and Pop Jones out there. I don't think mathematically on earth there's any way that they are going to be all that knowledgeable about it. I truly believe that municipals over the years -- and I think it will continue to be -- these are bonds and these are products that are sold with a lot of information behind them and not just bought. And I think that's the question here. Ms. McGuire –Brad, maybe now would be a good time for you describe the focus of your business. Is it institutional? Mr. Wendt –: Sure. I'd rather just speak more in generic terms than terms and what I've witnessed over the last 18 months -- Ms. McGuire –That would be great. Mr. Wendt –: -- in the fixed-income and electronic market. And I think it gets down to the question of who are you really empowering with the Internet. When I first started looking at this space and it's as recently as 18 months ago, we looked at a research report and we said, you know, what does the Internet really lever? And we came up with some key things. Information-intensive purchase, obviously municipal bonds. The tactile approach is not important. That means you don't have to touch the sweater in the store. And no one I think is too excited about touching bonds. The end user must be computer savvy. And finally, delayed gratification is acceptable I think, a delayed gratification is the definition of a bond, in terms of maturity at some point out there. The point of my comment is that you have to look at the Internet as a tool for efficiency. And the question is, who is that efficiency focused at? We've obviously had a great deal of conversations revolving around the individual investor because it is an information-intensive purchase. But equally important, if you can deliver information to the registered representative so he or she can better represent his or her sales position to his end using client, I think it's a very powerful medium. So what we are seeing in the electronic trading world is the fact that the Internet is slowly replacing the telephone. And what I mean by that is, if we rewound the clock to 1/1/99, think about when you went out to lunch and you'd come back and you'd look at your spindle, and you'd have your messages stacked up in your spindle. You'd go to your e-mail, and you'd have three e-mails going. One's from your son or daughter. Now, when you sneak out or you go back to the office after this meeting, you will probably have two or three phone messages and 42 e-mails. What we are seeing is people want to communicate electronically. And that is the evolution that we are seeing. I've seen a lot of conferences where the buzz word is "e-bond 2000, a revolution is here." What I'd really say is "e-bond 200, the evolution is here." And what we are doing in the world of electronic trading platforms is making sure that we are able to very effectively transmit that information. And that's really the essence of what we are doing. A specific platform can have up to 25 participants. They all have products to sell across the fixed-income spectrum. Obviously municipals are ideally suited because they are a prime retail product. Probably the number one fixed-income retail product. But more importantly, the Internet allows you to have an information-intensive purchase actually understood in a cohesive fashion. There's 1.5 million Cusips for municipals. How can even a registered rep get his hands around that on day one. He can through research due diligence, but once again we're talking about efficiency here. Whereat his fingertips, be it the hyperlink, be it information on data services through Cusip. He or she can really be empowered in terms of better serving the individual investor. Ms. McGuire –Thanks. Do you have any similar or different views, Roger? Mr. Hayes –Well, I think that we really are evolving into a different business model. I hear what Joe's got to say down there about how the liquidity is being impacted by the fact that everybody can't know everything and so you can't really add a little spread to your knowledge as an investor, but what really concerns me is that originally in the old days -- remember I told you I started back in 1992 -- but we had salespeople who sold our inventory. I mean that was why you had a salesperson. And a salesperson would call an individual. He would learn something about the individual and do the suitability. And then he would look through the inventory and then find one of your bonds to sell to that individual. And if that didn't suit, then he would act as agent and on behalf of the individual, search the market and try and find something that really did fit the individual for his purposes. And that's the way the old business model worked. Now what you're talking about in Brad Wendt's platform down here is commingled inventories. Our inventory and all the other dealers' and hypothetically -- I mean theoretically you could end up with one of these screen scrapping services so that literally at the fingertips of an individual investor, you could have every municipal bond offering in the country available to that person. Then the person goes through, searches out what he wants and then, you know, buys it. And I think -- I'm afraid that some of the suitability issues and some of the responsibilities that the deal community had, and rightfully so, in the old days, it troubles me a little bit that the dealer community is going to be sort of stuck with some of the G-17 or G-19, the fair dealing or the suitability issues that we had when the salesperson really was in direct contact with the customers. I don't have any answer for that right now. but it certainly does concern me some. Ms. McGuire –Brad, how do you -- Joe raised the question of due diligence. How do you see due diligence getting done? How do you see suitability getting done. Who's going to do the quality control about the products that are on these electronic markets? Mr. Wendt –: Right. And speaking in a generic sense, platforms are traditionally set up where you do have an electronic medium. And if you were to use an example of a multiple broker-dealers, they are really the end customer traditionally, so you'll have a broker-dealer who is contributing inventory so they are actually posting inventory to a centralized marketplace. And then you'll have another broker-dealer who will be distributing inventory. And traditionally that distributor of inventory will be buying the security from the contributor as principal, and he or she will be transferring that security to their customer. So taking it back to what you'd like to call the perfect order world is not that dissimilar from the process which Roger just highlighted, where instead of looking at a screen and finding a security from another firm which would be of interest and value to your client, in the old days you'd do it telephonically. And now I think all you're doing is on a very sophisticated basis, an efficient basis is replacing the telephone with an electronic trading platform. So you have more choice at the fingertips of the brokerdealer. So to answer your question specifically, the suitability and the rules, et cetera, reside with the brokerdealers executing the trade. Ms. McGuire –Ursula? Ms. Hyman – I think we heard from Lebenthal though this morning, their new approach, which is really designing models or suitabilities determined by a computer. Sort of the next move beyond just a platform for trading, whereby collecting certain information much like you would if you were trying to, you know, decide if someone was an accredited investor under Reg D, they could get certain information and then have a set of parameters on the computer about what groups of bonds might be best for that investor and then let that investor choose, and that seems to be the next wave of the future. And I'd love to hear from the banks and other other bankers here about suitability or from the issuers about how they would feel about having their bonds marketed that way. Ms. McGuire –Would anyone like to comment on that? Mr. Hayes –Oh, dear. Well, I think that the way that I think and Scott Martin may want to walk up here. He's with Bank of America on securities, and he is our compliance officer. In fact, if they're going like this, you know that I'm going to need to shut up. But what we're going to try and do, at least what we're thinking of trying to do when we're going to be using the bond as a platform, is to do an extensive questionnaire that the investor must fill out. And, you know, what's your net worth? What's your experience? How sophisticated are you? Do you have high-speed Internet? Are you going to have to download your stuff with just, you know, the old 14.4 modem? You know, what's your job? What's your income? What's your marginal tax bracket? All of that sort of thing. And then we hope, with a unique user ID and password, to say that investor may only see from us AA or better municipals. And then our screen will only show him that kind of a security. And then from that point on, we'll have a regular review of suitability where he's got to update his screen and with an electronic signature say, "This is correct and this is where I am." We don't have the Bond S platform up and running yet. But that's our best thinking at the moment. We probably -- I'm going to have Scott here today so that he can take a report back so far as what he's hearing from this panel, but at this moment, that's kind of what we're thinking. Mr. Green –From an issuer perspective, our interest is in having our bonds marketed in the most efficient, most effective and most cost effective way possible so that our issuance costs are lowered. Now, intuitively, the most liquid the secondary market, the lower the marketing costs for the bonds originally are going to be. Now, I know that Joe has some markedly different views on that in terms of the spreads, and I know that Jim Lebenthal this morning addressed that a little bit. But intuitively this type of marketing seems to make a lot of sense from an issuer standpoint. The suitability issue, which is a real issue from a legal standpoint than a bond lawyer's standpoint, which Kate doesn't want to talk about at this point, is not one that's a primary concern to issuers in this area because it's not a cost-driven question. But I'd be interested in hearing Joe's views on these spreads. Mr. Deane – You know, we were talking outside for a couple of minutes and I made one comment that actually seemed to make some sense, which is capital follows spread. It's a simple theory. It's a simple equation. And trust me, it works. If you take the spread out of a marketplace, the capital on Wall Street will walk out the front door. And I think anything that's taking place today, considering that we are in what I would call a somewhat capital-challenged market at the moment, I think anything that cuts back the spreads that people are working for right now is not only selfdefeating but potentially self-emulating. Because I think that one of things that people don't realize is that if you're an institution, if you're a mutual fund or if you're an insurance company, a big bank trust department, buying a bond, buying an asset, is half of the green trade, selling it is the other half. And any time that you limit my ability or my capability of making an excellent trade on the other side of that transaction, you are going to make me less willing to take on risk. You are going to make me less willing to take on your bonds in the future. And even though you may think generically on this bond deal, "I saved a dollar," that's great. If I don't buy your credit for the next 10 years, it's going to hurt you more than you'll ever know. And the thing is, I have an old theory in life. I use it. I think it works. I never get mad, I get even. And the thing is, I don't forget when people gyp you out of -you know, trying to make people work for nothing in new issues. I never forget that. I just store it in the computer and later on I just remember it. And I think that right now we are a little bit capital challenged as an industry. There's absolutely no question about it. And I think that anything that we could do that would increase the liquidity, even if it meant slightly higher spreads, I think in the long run for our industry would be infinitely infinitely better. And if the Internet can work to increase liquidity, I am all for it. And if the Internet will work insidiously to decrease liquidity, I will be dynamically against it. Because I think liquidity is king and will be for the next decade. Mr. Hayes –Joe, you know, theoretically the promise of the Internet and the promise of the inter-dealer platform, from the dealer to the -- Mr. Deane – Yes, I wanted to make that distinction, especially with what Brad was talking about. Mr. Hayes –Right. And I really applaud the recent MSRB release on setting up the sophisticated investor category. But theoretically what the inter-dealer or dealer to dealer and dealer to institutional customer, the benefit of that is that it's going to allow everybody to see everybody's needs. I need to sell this. I need to buy this. You know, that. And what you're able to do really is cut the dealers out so you don't need us anymore and you can sell your bonds and get your liquidity by showing it to literally hundreds of thousands of other bond funds and dealers who will show it to Hal what -- I mean don't you think that's a good theory? Mr. Deane – It's a good theory if you really don't need money and if you're in a dead-up market. The first time you hit a down market you're dead. You're dead. I mean one of the things that we try and do is we have -- we have probably of all the institutional investors in this industry, we probably have the best relationship with Wall Street of anybody. And the thing is, you know, in an up market, you know, simple theory. Monkeys could sell bonds. But the thing is, when it turns less liquid, when the market starts to begin to go against you, if you don't have a relationship with somebody, if they don't feel a compelling desire and need to provide you with liquidity -- You know, there was a song years ago, "Just walk away, Rene." That's what they're going to do. Because they don't feel that you have given them anything on the other side of the trade. What do they owe you? And I think that hand-in-hand relationship that I've taken, you know, 30 years to build up with in the street, I think is very, very part and parcel with what I do in the industry. And I think it's a very personal relationship. Not an electronic one. Mr. Hayes –So the aspect of anonymity doesn't hold any great allure for you. Mr. Deane – I think anonymity right now to me would be a ferocious negative. I can get anonymity right now. I mean I can go to the broker-broker marketplace and very quietly work through a Chapdelaine & Co., or work through a J.J. Kenney, and on an anonymous basis, although people will look up and see whose bonds they are the minute they appear on Chapdelaine, you know, get anonymity to do a trade. That is not humanly impossible to do today. But the thing is if I'm doing something positive for somebody, I want them to know it's me. So that someday when I knock on their door and go, "Hey, Fred, the market is dying. I need 100 million bucks. How about a hand?" I want them to feel utterly humiliating compelled to help me raise that capital. And the thing is if you're doing it anonymously on the upside, trust me, they're going to be equally as anonymous on the down. And you know what? Up markets are easy. Down markets are where the whole game is played. Ms. McGuire –Hal? Mr. Wittman – The only comment I'd have to make. The direction I come from before I got involved with finances, I was in a service-oriented entity. I didn't deal with products. And obviously municipal bonds, just like other equities, are products. And the products are bought and sold and paid for by a consumer or the purchaser and the salesperson gets his fee, whatever you may see, between the sale of that item. The interpretation of the investor is if indeed I buy from Bob a municipal bond and he gets a spread and he's entitled to that spread, I'm entitled to a service for that particular transaction that took place. This is sorely lacking. Because most people don't realize that there's an ongoing relationship that's got to be established or should be established for the future. Issuers, on a primary issue, you don't care, don't give you that kind of service. However, if the issuer has to go back to the well later, he's smarter if he establishes a rapport the first time around so he can go back to that same person and ask for more. So I think that's an issue very, very important and critical to what Bob had to say. The electronic age does remove a certain amount of personal relationships. Lots of people need that. They need to be stroked. They need to have their hand held. They have to understand that there's somebody back there who knows a little more than I do and can help me. Mr. Deane – Now, Hal, just to add one thing to that. I did have a conversation with the mayor of a large city who issued a thing through the Internet with no brokerdealer or whatever. And I'm sitting down in my office two days later and I had been quoted in the Wall Street Journal the day before and I got a call. And I said, "Who is it?" He said, "It's Mayor Fred." I said, "That's great. Put him on." And he said, "Joe, I just want to introduce myself, blah, blah, blah. I'm the major of, you know, X." I said, "Okay." He said, "I read your article in the journal in the other day. I understand that you didn't buy our deal." He said, "Can you just help me out a little bit here bit?" He goes, "You know, it'd save me money. I think you probably could have bought the bonds like a basis point cheaper than if I had gone another way." I said, "Oh, wow. That's huge." And he said, "Why wouldn't you do that?" And I said, "It's not that I won't, Mayor." I said, "But I'll tell you what. You need to have two pages when you do deals." I said, "On the first page, it can be the offering of your new issue." I said, "And then on a second page, I want you to print your bid side for every outstanding bond you've ever issued." I said, "And until page 2 shows up, you don't have to show me page 1. Because if you've got nothing but offerings and no bids, you are doing me no favor." Mr. Wittman – Can I make one more comment? Electronic media has to be used by people who know how to use it, to give data that people can interpret. If not, basically speaking, it's a caveat emptor. The individual is buying it because they want a tax capability, or they want the income flow. But they're really not knowledgeable enough to buy it. They need somebody or some means on that electronic transfer that makes it intelligent to them so they understand the downside as well as the up. I discovered in my experience in most transactions that occur the municipal bond, equities, real estate, syndications, et cetera, et cetera, very seldom do you find people telling you the downside risks of doing what you're doing. And people get into a lot of trouble because of that. And that has to be explained more thoroughly and personal relationships do that for the intelligent investor.Ms. McGuire –Jeff, what's your view on all this? Mr. Green –I wanted to follow up on something that Harold said a few minutes ago, where he talked about the issuer that has to come back to the market and does so with or without having information out there. And in connection with that, I wanted to just applaud NABL in their recent statement a few weeks ago for encouraging issuers, although not legally required to do so, to provide information to the marketplace. We all know that under the securities laws an issuer is under no obligation to update information, but I was encouraged to see that NABL had taken a position that it is appropriate for issuers who need to come back to the market to provide information. Because as we know, the furnishing of information to the marketplace for the repeat issuers and the maintenance of investor relations programs by repeat issuers is very, very important in terms of maintaining liquidity in the bonds. And I think you've heard that flow through the discussion today. Most of the disclosure problems that we hear about tend to be the one-time issuers who have no incentive to do that, and the regulation has been along those lines trying to deal with those problems. So it's good to hear Harold from the individual investor's standpoint make that point a few minutes ago. Ms. McGuire –Ursula? Ms. Hyman – Yes. One of the things Harold had talked about before we came in was, we were talking about the NRMSIRs and he said as an individual investor, I don't get this information. Why don't I? And I explained to him that the issuers would be happy in those cases to provide it but they don't know who he is. One of the real challenges, and I do a lot of bond workouts that we've had, is the cooperation of the brokerdealer level once you go through, you know, you find out which street names the bonds are in, and having those brokers get information to their holders. And I was a little troubled this morning when Jim Lebenthal was talking about maybe we're going to move to a portrayed kind of deal, and then we lose that investor relation Harold's talking about. And now no one's got the incentive. In a completely anonymous market, where everything is held in Salomon's or everything's held in BofA's name, and the individual investor. And so it gets back to the voluntary idea of using the Internet to broadcast your information out there, and yet there's so little guidance, other than the technical release, for the conduit borrower or for the city or town or the small issuer. And there's so many traps for the unwary there that it seems like the challenge for all of us market participants are finding ways to give appropriate guidance on how and when and in what format and what disclaimers, et cetera, so that we can reach our retail market. Or we can get the banks to be more responsive to broker-dealers. Mr. Wittman – It's interesting -- let me say this. You talk about the sophisticated investor. That sophistication is determined by the broker-dealer basically to determine whether or not the person is. I want to know, not that I'm against it because I think the electronic age is wonderful, I want to know how the computer is going to tell me that I'm sophisticated. (Laughter) Ms. McGuire –I don't think that they can tell you whether you're sophisticated. I think that weren't they just going to check and see whether you could afford it? Mr. Wittman – That's possibly true.Mr. Hayes –Well, we will know who is a sophisticated market professional. There's three very clear guidelines that the MSRB has set out as being the determining factor. Ms. McGuire –I was thinking of your suitability. Mr. Hayes –But I mean I like you a lot, Hal, but you'll never qualify. I mean you don't have independent research analysts like Joe does. You don't have all of the accesses to the NRMSIRs. You just don't have everything that Salomon Smith Barney has at their fingertips, and so we just wouldn't take any chances to let you be a sophisticated market professional, whereas there'd be no question about Joe. And that is a little something that bothers me. I mean I worry that we're taking too parental a view and in essence saying, "You're not smart enough" or "You're not rich enough. We've got all this information to do your own research, but we're not going to still allow you complete unfettered access to all of the potential investments that you could make." And it potentially is troublesome too. Mr. Wittman – Doesn't it make me a loose cannon on the Internet? Ms. McGuire –I think the suitability document that I know about has to do with recommending securities. And so actually anyone can buy anything in this country. We're still a free country. Some people do put filters in place because if they sell to anyone, they sometimes get sued if it goes down. And so they don't want to be sued. But it's not government policy. Those are litigation policies put in place by general counsels that have had enough bad experiences that they don't want to live with that. That's the way I see it in contrast. The suitability doctrine says that if you recommend a security to a person, you have to have a reasonable basis for that recommendation. And then you have to know something about the security that you're recommending and you have to know something about the investor you're recommending it to. And I think that's a doctrine which has served us well and made intermediaries valuable. And you've been talking a lot about dis-intermediation, and I understand the theories that you've been discussing about dis-intermediation and the cost of dis-intermediation vis-a-vis liquidity which is on the sell side, and also dis-intermediation in terms of a loss of particularized investor knowledge and information for dissemination.Another role performed by intermediaries and one which we have a question from the audience about is the notion of best execution. And as markets in bonds become more public, and their quotes actually are available about bonds, there will be new market data available for people to factor into, meeting their best execution obligations, which, as you know, is the obligation to obtain the best price for an investor with respect to, so it's not just to pick the best security if you're making a recommendation. But to be sure that investor who is seeking a security pays a fair price. The question is, how will that be affected by online bond trading? I wonder whether any of you had given any thought to that, to the obligation to obtain the best price or the ability to obtain the best price. You're looking for the best price everyday, Joe, so -- Mr. Deane – It's a very, very different question when you're dealing with a major institution and you're dealing with an individual. For me to get the best price, I mean even if I mess up, I'm not going to miss it by more than a dollar, which is really statistically irrelevant. For the individual investor, it's a different question. You know, most small lot trades in our industry are always marked up more simply because the cost of processing them is infinitely higher. I mean the cost of doing a ticket for $75 million is basically the same cost of doing a ticket for $10,000. So best execution -- I mean know what the NASD has and you've got screens and everything. In our business, it's a different type of business. And I'm not sure exactly down the road where that leads to other than tremendously great question. I'm not sure that there's going to be a central medium at some point that is actually physically going to determine that for the individual investor. Brad, what about you? Any thoughts on that? Mr. Wendt –: Well, certainly through electronic trading we're going to vastly increase the data sources for both the registered rep and the individual investor. I would say that the one issue on liquidity today, the reason obviously, the equity markets are so highly liquid is they're all exchange based. And you can simply either pick up the Wall Street Journal or the New York Times or go over Yahoo and type something in and you'll get an immediate quote on the security that you own in the equities market. I see the evolution of electronic trading where you will have marketplaces where they'll be a large number of dealers quoting prices on the same bond. And through that price, discovery process and also any price discovery process that is mandated by the appropriate regulatory agencies, and I think you'll finally get the information out there. The point being today, without any electronic medium, there is simply no way to look at where the vast majority of your 1.5 million Cusips in the municipal markets are trading. Certainly the individual investor on average does not describe the bond buyer where they probably have quotes on anywhere from 500 -- probably 500 bond prices throughout the course of the copy of the bond bar. But now through the electronic medium back to the issue down here that Harold's making, if you're an informed investor, the data sources will certainly be available. And it's up to the individual investor on how he or she uses those data sources. Ms. McGuire –I would like to mention, I haven't used it myself, but I do know that the Bond Market Association does have a Web site up that reveals the current level of transparency in the muni bond market, which has been something we've been working for at least 10 years, and that's Investinginbonds.com. It's available for those of you who'd like to check on the current level of bond transparency that's available to everyone. With that, I would like to give our panel a chance to say any one last idea that you might have or else we can say thank you. Anything? Thank you very much. I really appreciate your participation. (Recess.)
http://www.sec.gov/info/municipal/roundtables/2000panel2.htm
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