Muni industry awaits next SEC muni office director

After the Securities and Exchange Commission posted an announcement seeking a candidate to head its Office of Municipal Securities, key industry organizations anticipate working closely with the next director.

The National Association of Bond Lawyers and Bond Dealers of America commented on the importance of the position--held by Rebecca Olsen since 2018--responsible for coordinating the SEC’s municipal regulatory activities. NABL also offered some insight on the potential impact of the impending vacancy, which comes at a time of robust enforcement at the SEC.

Michael Decker of BDA described the role of director of OMS as “a vital senior position at the SEC with significant influence over regulatory policy-setting in the municipal market.” BDA exclusively represents securities dealers and banks whose primary focus is the U.S. fixed income markets.

The position was posted earlier this month on the USAJOBS website that serves as the portal for federal government employment. The application has a closing date of Oct. 22, so at this time, it remains to be seen who will succeed Olsen.

Bloomberg News

As a result, Decker said in a statement, that “BDA looks forward to working closely with whoever will be the successful candidate.”

Brandon Pond, chair of NABL’s securities law and disclosure committee, noted that ”as attorneys focused on all aspects of federal municipal securities law, many NABL members work closely with the Office of Municipal Securities (OMS).”

NABL also provides commentary and recommendations regarding legislation, regulations and rulings affecting bonds at federal, state and local levels.

Pond, who is currently with Hillis Clark Martin & Peterson, said in a statement that NABL looks “forward to continuing that work and relationship with whomever takes the role.”

In terms of what kind of leader NABL would like to see in the position, Pond said, “any OMS director should have robust knowledge of, experience with, and dedication to our municipal markets.”

Pond also noted that NABL does not foresee Olsen’s departure altering the current priorities and approaches of the OMS.

“OMS is responsible for acting on the priorities of the Commission at large,” Pond explained, “and we do not anticipate that direction will change with a new director.”

In recent years, those priorities have included enhanced compliance outreach and stepped up enforcement.

For example, last month, the SEC charged a firm and its two principals with violating numerous duties under Municipal Securities Rulemaking Board Rule G-42, which lays out the core responsibilities of municipal advisors. The actions are the first enforcement cases the SEC has brought under the 2016 rule.

While enforcement is its own division and OMS does not play a direct role in enforcement cases, the office does provide technical support to the enforcement and other divisions at the SEC and its director and staff are considered the commission's experts on the muni market.

Also, in the past year—amidst the pandemic—OMS in particular, has been keenly focused on the importance of high quality municipal market disclosures.

In a May 2020 joint statement, Olsen and then-Chairman Jay Clayton stressed “the importance of robust, timely and accurate municipal issuer disclosures,” which they say have “become even greater as a result of the effects of COVID-19.”

Since then, OMS continues to request that municipal issuers "provide investors with as much information about their current financial and operating condition as is reasonably practicable."

The director of OMS is a three-year appointment which, according to the position posting, “may be extended for 1 additional year without further competition.”

Olsen was named OMS director in 2018 after serving as acting director since 2017. During her tenure, the SEC has credited Olsen with being ”closely involved in initiatives designed to increase transparency in the municipal securities market.”

The SEC did not respond to a request for comment on the job posting.