SEC looks for dialogue at municipal disclosure conference

WASHINGTON — The Securities and Exchange Commission is looking for feedback from the municipal bond market on disclosure issues that have been the subject of debate and caused anxiety for years.

The municipal securities disclosure conference, scheduled for Dec. 6 at the SEC headquarters, will feature well-known muni market figures including bond lawyers, issuer officials, and industry representatives in addition to SEC commissioners and staff. The SEC revealed the agenda for the one-day event on the conference’s website earlier this week, and participants listed there said they view the event as timely and important.

The conference, first announced by SEC muni office Director Rebecca Olsen in September, was one of the recommendations in the commission’s 2012 Report on the Municipal Securities Market. According to the agenda, it will feature opening remarks by SEC Chairman Jay Clayton followed by SEC-moderated panels on fiscal distress, enforcement, technology, and the future of disclosure. The event will also feature remarks by Commissioner Kara Stein and a roundtable discussion featuring Commissioners Elad Roisman, Hester Peirce, and Robert Jackson and moderated by Olsen.

"I think it's a very constructive effort,” said Jim Spiotto, a participating municipal bankruptcy expert and managing director at Chapman Strategic Advisors. The investing public could learn from the event, Spiotto said, noting that investors have an intense interest in how they can get paid in a distressed scenario.

"It will help them understand better what's going on," said Spiotto. “I think it's a great idea, and quite timely."

Ernie Lanza, a senior counsel at Clark Hill scheduled to discuss developments in disclosure technology, said the event is a chance for market participants to gain some insight into SEC thinking on these matters. But the larger purpose appears to be for the benefit of the commissioners, none of whom were serving at the time of the 2012 report.

"A lot of it is an education for the commissioners themselves,” Lanza said.

Matt Fabian, a partner at Municipal Market Analytics who is scheduled to participate in the panel on the future of muni disclosure, said that there have been many important developments in that area since the 2012 report.

Technological advancements, enforcement actions, and other events have changed the landscape over the past six years, according to Fabian. The conference could offer the SEC the chance to take stock of those changes.

"This is a conference to start closing the gap between what they knew then and what they know now,” said Fabian.

Olsen has said that the SEC hasn't provided formal written interpretive guidance on both primary and continuing disclosure since a 1994 interpretive release which explored those obligations with respect to the antifraud provisions in the federal securities laws. She said the commission hopes the conference will provide it with market perspectives to inform its decisions, including on whether to issue new guidance.

Fabian said he thought the conference could be an important opportunity for the industry to speak to the SEC.

"Industry folks should be coming to this," Fabian said. "We have an opportunity to have a newer discussion with the SEC."

"I think it's an important conference from the industry's perspective,” he continued. “People need to be here."

The conference is free to attend. The SEC is requesting attendees register by Nov. 29. The event will also be webcast.