A Securities and Exchange Commission official yesterday said that staff are developing an "action plan" to boost municipal disclosure and accounting standards through new rulemaking or legislation.

Speaking on a regulatory reform panel at the Council of Infrastructure Financing Authorities' federal policy conference here, Mary Simpkins, senior special counsel in the SEC's Office of Municipal Securities, highlighted a number of general areas "that need continuing improvements." They included stale and incomplete disclosure, pay-to-play conflicts, inconsistent and voluntary accounting standards, as well as the use of muni derivatives products and their disclosure.

She said the SEC may also seek authority over unregulated market participants - authority that is currently being sought by the Municipal Securities Rulemaking Board.

"More attention needs to be paid to currently unregulated entities that advise issuers," Simpkins said. "They should be required to be registered as either broker-dealers or as investment advisers." That would require legislation, sources have said.

Her comments come after SEC chairman Mary Schapiro told the Senate Banking Committee last month that the commission is considering whether legislation is needed to fill gaps in regulatory oversight, including those related to municipal securities, credit default swaps and hedge funds.

"The new chairman of the SEC is very interested in aggressively pursuing improvements in the municipal market, so I think you can expect a lot of activity from us either the result of legislation or changes to [Rule] 15c2-12" on disclosure," Simpkins said.

Clifford Gannett, director of the IRS' tax-exempt bond branch, who spoke on the same panel, said his office now is focusing on evaluating applications from issuers wishing to participate in the taxable Build America Bonds program, to ensure that they are qualified to receive payments from the federal government for direct-pay BABs.

The BAB program, created as part of the $787 billion stimulus law, allows governmental issuers to sell taxable debt in 2009 and 2010 and either provide investors with a tax credit or receive a direct subsidy from the federal government.

To request payment under the program, issuers are required to submit a new Form 8038-CP, which Gannett's office will use to determine if the issuer qualifies for the subsidy. He said his team will likely take that form and make sure it is consistent with the issuer's Form 8038-G, the information return governmental issuers file.

Gannett said they are committed to making payments beginning May 1, and said all forms should be processed within 45 days.

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