From the Bond Buyer, April 1:

The Bond Market Association will participate in next week's U.S. TOPOFF 3 test, an exercise in which municipal market participants, government agencies, and trade groups will explore how a simulated terror scenario might affect market operations, the association said yesterday.

Joe Sack, executive vice president of TBMA, said yesterday that the experiment, which begins and ends on Tuesday, would test market participants' ability "to communicate with each other in emergencies." TBMA said its participation would mark the first time the organization has joined in a disaster-simulation exercise conducted by the U.S. Department of Homeland Security. TOPOFF 3 is the first exercise to include a significant number of private sector participants, TBMA said.

During the exercise, market participants will report the status of market infrastructure and activity with regulators, and test emergency notification procedures with market participants and regulators while simulated terrorist attacks take place principally in New Jersey and Connecticut.

Homeland Security Secretary Michael Chertoff said last month that the test would press "our preparedness systems so we can determine our weaknesses now and correct them for the future… We will intentionally push our programs to the point of failure, so we can bring to the surface difficult policy and operational issues." Other test participants within the financial community include the Securities and Exchange Commission, the U.S. Treasury Department, the Securities Industry Association and the Futures Industry Association.

Meanwhile, TBMA announced that is is forming a new and broadened Calendar and Securities Market Emergency Committee, which is an outgrowth of its long-standing Calendar Committee which issued holiday and closing recommendations, that will take on an enhanced role in the event of a crisis or major disruption, such as a terrorist attack.

The panel was formally expanded from just representatives of dealer firms in the aftermath of the September 11, 2001, terrorist attacks to include observers from the Federal Reserve Board, the Treasury, the Securities and Exchange Commission and other key regulators.

But now, in addition to dealers and the regulatory observers, the committee is being expanded to include members representing a wide array of other fixed-income market participants, such as clearance and settlement providers, inter-dealer brokers, institutional investors, institutional money market and securities lenders and financial futures exchanges.

"The terrorist attacks of September 11, 2001, the blackout suffered by the Northeast U.S. in the summer of 2003, and the 2004 day of mourning for President Ronald Reagan all underscored the need for a broader coordinating body made up of key industry representatives dedicated to evaluating the needs fo the market in the case of an emergency or unscheduled market openings or closing," said Micah Green, president of TBMA.