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Securities Law

SEC to Hold Roundtable on Munis, Other Fixed-Income Securities

The Securities and Exchange Commission plans to hold a public roundtable on Tuesday, April 16 to discuss ways to improve the transparency and efficiency of the municipal and corporate fixed income markets.

“As regulators, we must continually work to enhance the quality of the fixed income markets, which are critical to the U.S. economy,” SEC Chairman Elisse Walter said in a release. “We’ve already taken a step in that direction by issuing a report last summer on the municipal securities market and this roundtable will be another step forward.”

The SEC pointed out that the muni market helps finance public infrastructure and that retail investors, either directly or indirectly through mutual funds, hold more than 75% of the outstanding principal amount of muni securities.

The commission’s 2012 Report on the Municipal Securities Market contained many recommendations to improve disclosure as well as pre-trade and post-trade price transparency in the muni market.

The SEC asked Congress for legislative authority to dictate the form and content of issuers’ disclosures. It also asked for authority to require corporate conduit borrowers to meet the same registration and disclosure requirements for corporations.

The SEC urged the Municipal Securities Rulemaking Board to require dealers to execute muni orders at the best possible prices and to disclose markups and markdowns of riskless principal transactions.

There does not appear to have been much movement on the recommendations since the report was released last July.

“I look forward to hearing the views of a wide range of knowledgeable market participants, investors and others on how best to improve the transparency, efficiency and fairness of the fixed income markets and practical ways in which these ideas might be implemented,” Walter said.

The SEC held a series of public hearings on the muni market before issuing its report last year, but its schedule was cut because of budget shortfalls.

This latest roundtable will be held at the SEC’s Washington, D.C. headquarters, open to the public, and webcast live over the SEC’s website.

The SEC said it will soon release information on the agenda and participants.

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