Why do issuers enter into Continuing Disclosure Agreements (CDAs)?

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Issuers enter into Continuing Disclosure Agreements (CDAs) primarily to comply with SEC Rule 15c2-12, which mandates that municipal bond issuers provide ongoing disclosures about certain financial and operating information. This rule was established to promote transparency in the municipal securities market and to ensure that investors have access to relevant information about the issuer's financial condition and operations on an ongoing basis, rather than just at the time of the bond issuance.

By entering into a CDA, issuers commit to providing periodic updates, including any material changes that could affect the bondholders. This commitment helps maintain investor confidence, as they can expect timely and comprehensive information that can influence their investment decisions.

While streamlining the bond issuance process, reducing paperwork, and ensuring equal access to information are all considerations related to the broader concept of transparency and effective communication, the specific focus of CDAs is to fulfill the compliance requirements set forth by the SEC, making option C the most accurate choice in this context.

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