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"I think it is a concern of many of [GFOA's] members that the MCDC initiative will be used to generate a large number of instances of issuer violations of the continuing disclosure agreements and obligations … and that the violations will be grouped and presented to Congress and SEC commissioners as the basis for organizing some kind of one-size-fits-all regulatory scheme to impose further regulation on issuers," said Dustin McDonald, GFOA federal liaison center director
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Rebecca Olsen, deputy director of the SEC's Office of Municipal Securities said that while there "are no concrete plans" for guidance on the use of bank loans in the municipal market, the topic is something OMS could consider in 2016.
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"I think we will probably be active in all phases of rulemaking both working to understand and implement [approved MSRB] rules and working with the MSRB as they are developing new rules for municipal advisors," Jessica Kane, director of the SEC's Office of Municipal Securities, said about OMS's upcoming work in 2016.
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The MSRB's pilot MA qualification exam and the self-regulator's eventual official exam will be a time for MAs to "fish or cut bait" on whether they are going to be in the MA business, said Ernesto Lanza, a shareholder in Greenberg Traurig's Washington office. It will also cause firms that have split business models to make important determinations of who falls on which side of the MA line, he said.
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Leo Karwejna, managing and chief compliance officer at Public Financial Management, said he "hopes every municipal advisor who can signs up to take the [MSRB] pilot [exam]." PFM already has a "full blitz" on the work needed to get its MAs past the exam, he added.
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Nat Singer, the chair of the Municipal Securities Rulemaking Board, says he is stressing that it is "very important for the market" that the MSRB get its MA rules in place next year. He said he would like to see it done before his tenure ends Sept. 30.
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"The effective date of a rule is obviously an important date for the market and for the regulated entities, but for regulators it really is just another step in a long process," said Lynnette Kelly, executive director of the Municipal Securities Rulemaking Board, referring to the work the MSRB does to help those in the market adjust to new rulemakings. "We've got an effective date but we've got a significant amount of work to do before and after the effective date and that includes providing very specific education materials."
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Leslie Norwood, associate general counsel and co-head of the municipal securities division for the Securities Industry and Financial Markets Association, said SIFMA would like to see the MSRB's MA rules completed soon, but added the groups would prefer to see the SEC disapprove MSRB Rule G-42 so that SIFMA and other groups that have concerns with it could continue to work on it in 2016.
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