A Securities and Exchange Commissioner, who caused a furor among issuers last fall by calling for the repeal of the Tower Amendment and securities law exemptions for municipal securities issues, has begun meeting with them to get their views on what actions the SEC should take.
Issuer officials talked briefly about the meetings with commissioner Elisse Walter yesterday during the National Association of State Treasurers’ 2010 Legislative Conference here.
Kinney Poynter, executive director of the National Association of State Auditors, Comptrollers, and Treasurers, said representatives of his group and NAST, met with Walter on Thursday, telling her and SEC staff that improvements to the timeliness and usefulness of municipal disclosure can be implemented without any legislative changes.
He said members of the SEC’s division of corporate finance were also present at the meeting, including its director, Meredith Cross, and senior special counsel, Amy Meltzer Starr.
NASACT identified disclosures that issuers could make on a quarterly basis that would pose little or no additional burdens on them, since the disclosures are generally already prepared for use in the course of their normal operations, Poynter said. The information would be prepared and disseminated to the market outside of the normal audit process.
Maryland Treasurer Nancy Kopp, who was one of four state treasurers to attend the meeting with Walter, said it was “a very good introductory meeting” and appeared to revolve around the commission’s proposed changes to its Rule 15c2-12 on disclosure as well as the staff’s drafting of the first interpretive guidance since 1994 to address legal ambiguities in the rule.
GFOA members also plan to meet with Walter.
The meetings come after Walter, in an October speech, called for the repeal of the Tower Amendment — a provision of the Securities Exchange Act of 1934 that restricts the SEC and the Municipal Securities Rulemaking Board from collecting bond documents prior to a bond sale.
She also said Congress should give the SEC authority to require issuers to comply with certain continuing disclosure requirements as well as generally accepted accounting principles.
The meetings also come after some members of the Government Finance Officers Association sparred with representatives of the National Association of Bond Lawyers in late January over whether the groups should help the SEC develop its interpretive guidance.
Members of the GFOA, NABL, and the National Federation of Municipal Analysts have since said they are working together on the development of “templates” for disclosure best practices.
Asked about the outreach to issuers, Walter said she and her staff have met with various market participants, including investors, issuers, analysts, and others to solicit their views so that the SEC can be best informed about any action that the commission and its staff might take.
Walter declined to provide a timetable for the interpretive guidance, though SEC staff have said the commission expects to vote on a final proposal sometime during the spring.
Also at the meeting, MSRB chairman Peter Clarke, managing director and vice chairman of tax-exempt capital markets at JPMorgan, said the board’s Electronic Municipal Market Access, or EMMA, site can serve as a “conduit” for any additional unaudited financial information issuers choose to disseminate to the market.
MSRB staff also said yesterday they plan this week to seek SEC approval for an expansion of their transparency system for short-term debt.
