Municipal Bond Blogs

MCDC Self-Reporting for Municipal Issuers Face Dec. 1 Deadline

Publisher: JD Supra Business Advisor
Author: Thomas Potter, III

State or local govt. entities and municipal bond issuers face a Dec 1st deadline to respond to the SEC Enforcement division’s “Municipalities Continuing Disclosure Cooperation Initiative.”

The initiative is part of an increased regulatory and enforcement emphasis on the public finance market resulting from the passing of Dodd-Frank. Municipal Issuers are required to make continuing-disclosure filings of events affecting their outstanding bond issues (financial statements, ratings changes, tax shortfalls, etc.) similar to how SEC reporting companies file disclosure on their securities. The SEC enforcement division is on a mission to bring fraud and non-disclosure actions against those municipal issuers who falsely certified their prior disclosure compliance in subsequent bond issues.

For more details on the article, please click here.

By : Securex /October 23, 2014 /Compliance, Municipal Bond Blogs /0 Comment Read More

What you need to know about the new SEC municipal advisor rule

Publisher: Accounting Today
Author: Douglass Dalton

The SEC has recently announced the implementation of a new rule that oversees municipal advisors in order to crack down on potential conflicts of interests at the expense of both institutional and retail investors.

Municipal advisors are defined as a qualified finance professional who gives municipalities and non-profits advice on financial deals such as bond offerings. Under the municipal advisor rule that the SEC approved in September 2013, an advisor must be registered through the SEC as a municipal advisor and cannot have any other interest in the deal. The rule stipulates that municipal advisors now have a federal fiduciary duty to their clients and will be held to new professional qualification and conduct standards.

The implications of this new advisor rule involve the burdens of implementing change throughout the entire municipal advisor industry. Historically, it was common for those orchestrating the transaction to also dish out advice and counsel to the municipality or nonprofit entering into the deal. The problem with this model was that while most underwriters or brokers are fair and reasonable, entrusting a financial professional to give advice to a municipality or nonprofit when that professional could potentially benefit greatly if the municipality or nonprofit enters into the deal, creates an inherent conflict of interest. Unless an exemption is met, issuers will only be able to receive advice or recommendations from municipal advisors (those professionals with a fiduciary duty to the government or nonprofit), and no other parties, such as underwriters.

For more detailed analysis on the new SEC municipal advisor rule, please access the full article here.

For assistance with meeting the SEC municipal advisor registration requirements, please call 303-353-1945

By : Securex /September 03, 2014 /Compliance, Municipal Bond Blogs, SEC News and Public Statement, Securites Law /0 Comment Read More

SEC Resolves First Case Under New Municipalities Continuing Disclosure Cooperation Initiative

Publisher: Securities Law Perspectives
Author: Mary Hansen and William Carr

On July 8th, 2014, the SEC announced a settlement of charges against a CA school district for misleading bond investors about its failure to comply with its continuing disclosure obligations under Rule 15c2-12 of the Exchange Act.

The settlement was facilitated by the MCDC initiative (Municipalities Continuing Disclosure Cooperation Initiative), which is part of the SEC’s goal to bring more oversight into the municipal bond industry. As part of the MCDC Initiative, Kings Canyon Joint Unified School district, without admitting or denying the SEC’s findings agreed to entry of an Order (1) finding that it was in violation of Section 17(a)(2) of the Securities Act, (2) requiring it to cease and desist from violating Section 17(a)(2), (3) requiring it to establish written policies and procedures and to conduct periodic training regarding continuing disclosure obligations, and (4) requiring it to cooperate with the Enforcement Division in any subsequent investigation and to disclose the settlement in future bond offering materials.

The settlement marks the first case of the MCDC Initiative and SEC oversight on the public finance market. For more information on the settlement, please click here.

By : Securex /July 28, 2014 /Compliance, Municipal Bond Blogs, SEC News and Public Statement, Securites Law /0 Comment Read More

Electronic filing of Municipal Advisor Registration on SEC Form MA now required

Starting Tuesday, July 1st, 2014, the Dodd Frank required Municipal Advisor Form (Form MA) must be electronically filed using the SEC’s EDGARLink Online form filing site.

All municipal advisor forms must be Live filed. The SEC system does not permit test filings of Form MA. Currently, the SEC approximates that close to 1,200 firms and 22,000 individuals will register as municipal advisors using Form MA.

Moving forward, municipal advisor registrants will be required to file Form MA annually within 90 days after the end of that advisor’s fiscal year or the end of the calendar year for a sole proprietor.

Need Assistance? Securex can prepare and file Form MA ((MA, MA-A, MA/A, MA-I, MA-I/A, MA-NR and MA-W). Please contact us for more information.

For additional information, forms, deadlines, and links to resources, please refer to here.

By : Securex /July 02, 2014 /Compliance, EDGAR filing conversion tips and shortcuts, General EDGAR filing, Municipal Bond Blogs, Securites Law /0 Comment Read More

Treasury turns its gaze to Municipal Bond Market

Publisher: Wall Street Journal
Author: Andrew Ackerman

US policy makers have begun taking steps to keep closer tabs on the ability of states and cities to raise money in the $3.7 trillion dollar municipal-bond market.

The Treasury Dept has announced it will form a new unit to broadly monitor the market, with an emphasis on troubled borrowers. The new unit will be headed by Kent Hiteshew, a veteran public-finance banker formerly at JP Morgan Chase. The Treasury unit will track state and local pensions, as well as the financing of bridges, roads, and other infrastructure projects. The new unit hopes to improve the Treasury departments understanding of the ramifications of municipal-market stresses, especially in light of the financial problems in Puerto Rico, which is beset with challenges that include 15% unemployment and roughly $70 billion dollars of outstanding debt.

The municipal-bond market has long been viewed as a reliable source of tax-exempt income and as a vehicle for retirement savings. However, bankruptcy filings by Detroit, San Bernardino, Stockton, and potentially Puerto Rico have rattled those assumptions. For full access to the article, please click here. Please note that the article is behind a Wall Street Journal paywall that requires a log in to have access.

What is your opinion on increased scrutiny of municipal bonds? Is regulation necessary? Give us your thoughts in the opinion section below.

By : Securex /April 18, 2014 /Compliance, Municipal Bond Blogs, Securites Law /0 Comment Read More

SEC steps up scrutiny of municipal bonds: recently filed enforcement actions

Publisher: Mintz Levin
Author: Chip Phinney

In the past months, the SEC has been stepping up its scrutiny of municipal bond offerings.

In the last year alone, the SEC has filed a number of enforcement actions against bond issuers and underwriters. The alleged violations have involved misstatements or omissions concerning such topics as: compliance with tax exemption requirements or reporting requirements, limitations on debt capacity; property valuations; and municipal accounts. In particular, the announcement of the Municipalities Continuing Disclosure Cooperation Initiative, which encourages municipal bond issuers and underwriters to self-report possible disclosure violations, the SEC specifically, noted that it may file enforcement actions against issuers for inaccurately stating in final official statements that they have substantially complied with their prior continuing disclosure obligations. Underwriters may also be charged with securities violations if they have failed to exercise adequate due diligence in determining whether issuers have complied with such obligations.  For full access to the article and more detailed enforcement action cases, please click here.

What is your opinion on the increasing enforcement actions in the municipal securities industry? Do you believe the SEC will begin regulating the municipal bond industry at the same level of scrutiny as corporate securities? Give us your opinion in the comments below.

By : Securex /April 17, 2014 /Compliance, General EDGAR filing, Municipal Bond Blogs, Securites Law /0 Comment Read More