Law and regulation

The Internal Revenue Service has floated guidance to address a tax law concern about rules proposed by the Securities and Exchange Commission that could require money market funds to move to floating net asset values.

The Municipal Securities Rulemaking Board is urging the Securities and Exchange Commission to give it more time to comply with proposed rules that would require it to develop, test, maintain and monitor the technological systems that are integral to its operations as well as clarification about the extent to which the rules would apply.

Although municipal issuer defaults in the first half of 2013 are at a multi-year high at $7.6 billion, overall sector trends appear to be improving, according to a report published by Municipal Market Advisors Tuesday.

Municipal market participants say two Securities and Exchange Commission nominees, near toward confirmation, could influence both rulemaking and enforcement actions.

A bipartisan, bicameral foursome reintroduced legislation that would authorize $50 billion of tax-credit bonds over six years.

The sentencing dates of more convicted municipal bond bid-riggers have been pushed back, according to documents filed with the U.S. district Courts for the Southern District of New York and Western District of North Carolina, as prosecutors seek stiffer penalties for price-fixing of investment contracts.

Elaine Greenberg, chief of the Securities and Exchange Commission's Municipal Securities and Public Pensions Enforcement Unit, will step down at the end of July.

The Senate Banking Committee will hold a hearing June 27 to consider two nominees to the Securities and Exchange Commission.

Investment Company Institute president and chief executive officer Paul Schott Stevens said Wednesday that ICI supports one federal proposal on money market fund reform, but strongly opposes the other.

Standard and Poor's has told issuers of municipal bonds this week that the rating agency expects borrowers seeking a rating to disclose all debt-like obligations, including increasingly-popular bank loans.

The Municipal Securities Rulemaking Board released three new educational videos explaining what investors should expect from their brokers when buying or selling municipal securities.

Dealer groups said Tuesday that they support Municipal Securities Rulemaking Board proposed rule changes on retail order periods, but non-dealer financial advisors warn issuers can be exploited, with underwriters simply determining for them which "retail" investors can buy the bonds in offerings.

The Municipal Securities Rulemaking Board filed rule changes with the Securities and Exchange Commission on Monday that are designed to ensure underwriters follow issuers' orders that a certain amount of their bonds be offered to retail investors at the initial offering price.

Two broker dealers were fined a total of $62,500 for municipal bond fair pricing and trade reporting violations, while two individuals were fined $35,000 and suspended for violating other muni rules, the Financial Industry Regulatory Authority said Monday.

The National Federation of Municipal Analysts is working on several new issue and disclosure initiatives geared to helping issuers navigate debt transactions.

The Municipal Securities Rulemaking Board is urging investors and dealers to examine the redemption provisions of Build America Bonds and other direct-pay bonds so they can determine if the bonds' market value could be affected by a redemption stemming from a sequestration-mandated cut in subsidy payments to the issuer.

Dealers generally like the Municipal Securities Rulemaking Board's proposed rules governing sophisticated municipal market professionals, which need less protection than retail investors, but are seeking some clarifications and suggesting the rules expanded to cover small hedge funds.

The Municipal Securities Rulemaking Board announced Wednesday that it has added an experienced securities lawyer, Michael L. Post, to its roster as a deputy general counsel.

The Government Finance Officers Association is developing a new best practice paper on bank loan issues following the recent industry report about bank loan disclosures.

Broker-dealers charged billions of dollars in excessive markups on municipal bond trades from 2005 to 2013, according to a new study.