Law and regulation

Rep. Steve Stivers, R.-Ohio, introduced a bill Friday that would define municipal advisors as those engaged with a municipal issuer to provide financial advice for compensation, with exceptions from the definition and its fiduciary duty for members of governmental boards, underwriters, bankers, swap dealers and those that provide related advice.

The Financial Stability Oversight Council lacks legal authority to recommend additional money market fund regulations, which have been opposed by a variety of municipal market participants, say industry and business advocacy associations in recently filed comment letters.

The Municipal Securities Rulemaking Board has filed proposed rule changes with the Securities and Exchange Commission that would require dealers to disclosure more information about contributions to issuers' bond ballot campaigns and resulting underwriting agreements.

Appointed members of state and local governmental boards will likely be exempted from the Securities and Exchange Commission's final definition of municipal advisor, which is expected to be released early this year, the SEC chairman said Thursday.

Market participants say munis are key to reaching the infrastructure goals laid out in President Obama's State of the Union Address, but caution that cuts to munis' tax benefits could make it difficult to fund the large-scale projects Obama described.

President Obama is not targeting municipal bonds in his proposal to cap the value of tax exclusions and deductions at 28%, Jack Lew, his nominee for Treasury Secretary told lawmakers Wednesday.

Lawyers for three former bankers convicted of rigging bids for municipal bond reinvestment contracts have pinned their appeals partly on circumstances surrounding the testimony of cooperating witness Adrian Scott-Jones, who abruptly left the courthouse during a day of testimony, and never returned.

The MSRB's Jay Goldstone reminded that comments on its review of its rules and interpretive guidance rule changes are due Feb. 19, asking commenters to offer specific suggestions and critiques.

Rep. Steve Stivers, R-Ohio, will introduce legislation in the coming days similar to a municipal advisor bill that passed the House last September.

Municipal market groups have mixed views about a Municipal Securities Rulemaking Board proposal to require underwriters to file preliminary official statements on the EMMA system.

The Municipal Securities Rulemaking Board is proposing to create a new Rule G-47 that would codify current guidance on the obligations of dealers to disclose material information about municipal securities to customers at or before the time of purchase or sale.

The Government Finance Officers Association's executive board is expected on Friday to approve a new best-practice document that gives municipal bond issuers guidance about the types of fees they can expect to incur when issuing municipal debt, a GFOA consultant said.

President Obama has nominated securities litigator and former U.S. prosecutor Mary Jo White to serve as chairman of the Securities and Exchange Commission through June 5, 2019.

Securities and Exchange Commission staff are in late stages of finalizing the municipal advisor definition and are considering concerns raised about the definition by state and local governments, John Cross, the head of the SEC's Office of Municipal Securities told a group of state and local finance officials here Thursday.

Members of the Government Finance Officers Association committee on governmental debt management said this year could bring a slew of revolutionary new regulatory or legislative changes that could overhaul the structure and operation of the municipal market.

Municipal market insiders say muni-related items working though the Securities and Exchange Commission will likely remain on track if Mary Jo White, a securities litigator and former U.S. prosecutor, becomes the SEC's new chairman.

The Financial Industry Regulatory Authority's municipal market priority this year will be ensure that brokers adequately disclose risks associated with tax-exempt bonds backed by revenue from private and nonprofit entities, which have significantly higher default rates than general obligation bonds.

The Securities and Exchange Commission's municipal bond office has sent a so called "no-action" letter to NetRoadshow Inc., paving the way for the firm and its underwriter clients to present Internet-based "road shows" on municipal bond offerings to retail investors.

The SEC named George S. Canellos, deputy director of the enforcement division, as the new acting director of enforcement, effective Feb. 8. David P. Bergers will succeed Canellos as acting deputy director of enforcement.

Pennsylvania is distributing $8.6 million in restitution from JPMorgan Chase & Co., to municipalities and nonprofit organizations who were victims of a scheme to rig bids of municipal bond reinvestment contracts, the Pennsylvania Attorney General's office announced.