The SEC will focus on coronavirus' effect on the municipal market

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The Securities and Exchange Commission’s Fixed Income Market Structure Advisory Committee will meet virtually on Monday.

The Securities and Exchange Commission's Fixed Income Market Structure Advisory Committee will discuss the effect of the COVID-19 pandemic on the municipal market next week.

FIMSAC will meet virtually on Oct. 5 for its third meeting this year at 9:30 a.m. The committee plans to focus on discussions regarding market volatility and the effect of COVID-19 on the corporate bond market, the bond fund and exchange traded fund market, the technology and e-trading market and the municipal securities market.

FIMSAC will also consider a recommendation concerning the definition of electronic trading for regulatory purposes. The committee wants to make it easier for mutual funds to cross-trade in-house without going to the market under Rule 17a-7 under the Investment Advisers Act of 1940.

“Advisers face significant challenges because, although Rule 17a-7 permits funds to participate in certain cross trades, the conditions as a general matter make it difficult to impossible to cross trade fixed income securities … ” FIMSAC wrote.

At 11:30 a.m., FIMSAC will discuss muni market observations and lessons. Usually, the agenda includes panelists, but Thursday night’s post did not include them.

The fixed income committee was formed in November 2017 to provide the SEC with an increased understanding of the “efficiency, transparency and effectiveness” of those markets.

FIMSAC has some top municipal market figures, such as Mark Kim, who was recently named CEO of the Municipal Securities Rulemaking Board, and Darryl Street, senior financial policy advisor for the District of Columbia’s chief financial officer. Former SEC Chairman and Commissioner Elisse Walter also has a seat at FIMSAC.

Walter has repeatedly said more progress needs to be made in secondary market disclosure and has pushed for regulatory action. Timely information in the muni market has been a hot topic. In May, the SEC offered significant guidance for issuers on how to provide timely and voluntary disclosure during the pandemic. Issuers at the time said the SEC’s statement would encourage issuers to provide more timely information.

The meeting will be open to the public via webcast at www.sec.gov.

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