SEC to hold virtual disclosure conference in June

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The Securities and Exchange Commission has decided to take its municipal conference virtual to discuss the timely issue of disclosing financial information during a pandemic.

The SEC announced Friday morning that it will host “Spotlight on Transparency: A Discussion of Secondary Market Municipal Securities Disclosure Practices” on June 16. The conference, normally held in March, will run from 1 to 4 p.m. and will be open to the public via webcast at www.sec.gov.

The announcement comes at a pivotal time for the municipal market as the SEC released a statement earlier this month detailing the kinds of coronavirus disclosures municipalities should be making.

SEC Chair Jay Clayton will deliver opening statements at an SEC municipal disclosure conference in June.

Chairman Jay Clayton, Commissioners Hester Peirce, Elad Roisman, Allison Herren Lee and staff from the SEC’s Office of Municipal Securities including its Director Rebecca Olsen will discuss the issue.

The conference will start with comments from Clayton, the commissioners and Olsen followed by a panel on voluntary disclosure practices in the secondary market. Other panels include buy-side perspectives and the day will finish with a discussion on COVID-19-related disclosures.

In its statement in early May, the SEC encouraged voluntary disclosure during the pandemic and said investors need timely information. The SEC has frequently called on issuers to provide more timely information, even if they are not strictly required to do so under continuing disclosure agreements.

Issuers and lawyers called the SEC’s statement a “home run.”

“It will allow issuers to really understand where the SEC is coming at in terms of the kinds of disclosures that they’re expecting to occur,” said Dan Deaton, a partner at Nixon Peabody.

Many lawyers and issuers are eager to ask the SEC questions about a long-awaited staff legal bulletin released in February, explaining how antifraud laws apply to disclosure. Market participants had hoped that in March they could have discussed their concerns.

The SEC’s COVID-19-related disclosure answered some of those questions. The SEC said in May that good faith attempts in disclosure would not likely be second-guessed — a key question for some issuers and lawyers, who wondered whether it was advisable for issuers to disclose unaudited information that could potentially be inaccurate.

That statement would encourage issuers to provide more information in a timely way, said Ben Watkins, director of Florida’s Division of Bond Finance in early May.

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This comes as the National Association of State Budget Officers canceled its 2020 annual conference for the first time in its 75-year history. The conference was scheduled for August 2 to 5 in Boston.

“NASBO, as many other associations have done, determined that the health of our attendees is paramount and it would be impossible to hold substantive, content-driven, in-person meetings due to COVID-19 social distancing guidelines, state travel restrictions, and other factors outside of NASBO’s control,” Shelby Kerns, executive director of the association , wrote in a May 19 letter.

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