New NFMA Chair to Push For More Disclosure, Group Visibility in 2017

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WASHINGTON – Julie Egan, the new chair of the National Federation of Municipal Analysts, wants to increase NFMA's visibility in the municipal market in 2017 and push regulators for more improvements to muni disclosure.

Egan, a senior vice president and portfolio manager with Community Capital Management in Charlotte, talked about her goals for the group in a recent interview. She took over as chair on Jan. 1.

NFMA has published numerous white papers and best practices on disclosure and other muni market issues, but Egan said the group found that the publications' reach may be more limited than previously thought. She described an experience at NFMA's 2016 annual conference where a market practitioner who was familiar with NFMA said on a panel that she did not know the group had recommended best practices.

"We were surprised by that and realized we need to do better outreach to other organizations," Egan said, citing opportunities to collaborate on materials and webinars with groups like the National Association of Bond Lawyers, the Government Finance Officers Association, and the National Association of Municipal Advisors.

"To network and get all our educational material out there and better link up with other market participants would be great," she said.

Egan added that while working with various groups to tackle issues in the muni market, NFMA "certainly won't agree with everybody on everything, but [will try to] find pockets of agreement and work together on the things we can."

NFMA also would like to expand its outreach efforts to states and students this year. States sometimes have links to information from industry and other groups on their websites but don't generally include NFMA materials, Egan said. NFMA's outreach to students, including a scholarship to the group's annual conference, is in part to "let them know there are still careers in this industry," she added.

Egan said she plans to improve outreach to NFMA's membership and already has several nationwide calls scheduled that will be open to the group's members.

NFMA will soon add to the materials Egan hopes to better share with the market, including a final version of a recommended best practice for disclosures on charter school financings. The group released a draft of the document in September, which urged charter schools to provide detailed financial, academic, and staffing information in primary and secondary disclosure documents. The final version will incorporate feedback from the public. Egan said NFMA is also planning to release best practices on disclosure for local general obligation bonds as well as those for the toll-road sector and water and sewer, both of which are still in the drafting stage.

NFMA's focus on disclosure in 2017 will, as in past years, include meetings with market groups and the Municipal Securities Rulemaking Board, like the MSRB's industry roundtable that took place in January. Egan said the group and its members also plan to participate in working groups to improve the MSRB's EMMA system throughout the year. There have already been positive changes to EMMA based on feedback, including new, more detailed alerts participants can get when issuers file disclosures, Egan said.

NFMA sent a letter on disclosure to the Securities and Exchange Commission last year that focused on improving the current state of disclosure filings to EMMA, expanding the list of material event notices under SEC Rule 15c2-12 on disclosure, and updating written interpretive guidance. Egan said that, for her, the letter "is really just a matter of pushing better and timelier disclosure forward."

"We did a good job last year and I want to continue down that path," Egan said.

The letter recommended the SEC directly require issuers to prepare primary and continuing disclosures during the term of the securities, including the timing, frequency and minimum standards for those disclosures. Rep. Gwen Moore, D-Wis., introduced a bill last year that would shift municipal disclosure responsibilities to issuers and borrowers from underwriters and give the SEC authority issuers. GFOA debt committee members criticized the bill during GFOA's winter meeting in December. It has not yet been reintroduced in the current session.

Egan noted that NFMA and its members are not lobbyists and would not go to Capitol Hill to lobby for anything per se, but said that they "absolutely" care what Congress is doing and plan to stay involved. The group plans to use its annual conference here from May 16 through May 19 to meet executive directors of muni market groups as well as possibly legislators and their staffs.

"As we all know, there is a lot of transition going on with the new administration and what's going to happen with infrastructure, tax reform and what's going to happen with the Affordable Care Act," Egan said, referring to the start of President Donald Trump's administration. "As it plays out, of course we are going to pay attention and listen but I don't think there's a lot of finalized information yet. We're kind of like everybody else watching and waiting."

Egan added that the group is taking a somewhat similar view with the SEC, which is currently operating with only two of five commissioners. Trump has nominated Jay Clayton, a Wall Street lawyer, to take over as SEC chair but there haven't been hearings scheduled on his nomination yet. NFMA met with the SEC officials in January and will continue to visit with staff at least annually and talk to them about the group's concerns, according to Egan.

Background

Egan first got into the municipal market after graduating from Kent State University with a bachelor's of business administration in finance. She applied to and got a position in National City Bank's trust department, where she worked exclusively with fixed income securities, including munis.

"I didn't go to school dreaming about municipal bonds or a municipal bond career but I am happy to say I accidentally fell into it and love it," Egan said. "I like how the sectors are all different so you can use different skill sets all in one day. It keeps it from getting stale or boring."

She first got involved with NFMA through its local constituent societies, eventually becoming president of the Southern Municipal Finance Society and a representative to NFMA's board.

"I believed in what NFMA stood for and wanted to help out," she said.

She is in her eighth year with Community Capital Management, a privately-held investment advisor registered with the SEC that manages about $2.3 billion of assets for foundations, pension funds, high net worth investors, funds, nonprofits and others.

"From my prior jobs, you just looked at bonds for yield duration or something else, here we do that as well but a very big portion of what we look at is what the proceeds are doing and that they are doing good things for the community," she said. "It's a nice bonus every day."

Before working for CCM, she worked at Wells Fargo for 10 years where she primarily worked with money market funds. She also worked at Nuveen for three years where she focused on housing. Egan also has an MBA from Case Western Reserve University.

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