Law and regulation

Incoming NABL board president Scott Lilienthal discusses sequestration, the fiscal cliff, the SEC report and other issues the group expects to face in the next 12 months.

The District of Columbia's Chief Financial Officer will hand over nearly three years of internal audits and add a disclosure to the district's most recent debt issuance after a request from the Securities and Exchange Commission.

The Municipal Securities Rulemaking Board has proposed rule changes designed to both streamline underwriters' submission of new-issue bond information and reduce reporting errors.

U.S. Securities and Exchange Commission chairwoman Mary Schapiro criticized the dominant pay model for ratings agencies on Tuesday.

An international proposal that would stipulate the amount of capital banks must hold against assets could discourage banks from buying municipal bonds, according to the Securities Industry and Financial Markets Association.

David Lerner Associates Inc. has agreed to pay some $4.3 million in fines and restitution for charging excessive markups on transactions of municipal bonds and collateralized-mortgage obligations between 2005 and 2012.

Marcy Edwards, senior financial policy advisor to the District of Columbia's chief financial officer, has been named a public board member of the Municipal Securities Rulemaking Board, the MSRB announced Monday.

The SEC could tighten oversight of muni underwriters or adopt a "three strike system" for issuers if lawmakers fail to grant the SEC authority to set disclosure standards for issuers, a top regulator said Friday.

Jeanine Rodgers Caruso, president of Fiscal Advisors & Marketing Inc., is the new board president of the National Association of Independent Public Finance Advisors

The Financial Industry Regulatory Authority has ordered seven firms to pay more than $260,000 in fines and restitution to customers for violations of trade reporting and other municipal securities rules.

The Securities and Exchange Commission hopes to finalize its definition of municipal advisor early next year, according to the head of the SEC's municipal securities office.

The Financial Industry Regulatory Authority and four major industry groups spent millions of dollars on lobbyists to push their agendas on Capitol Hill, while the National Association of State Treasurers was the only governmental group to report hiring lobbyists, according to annual tax forms 22 muni-related groups filed with the Internal Revenue Service.

Middle-market, fixed-income dealer firms are adding staffers to their compliance divisions, part of an expensive effort to comply with a host of new financial regulations coming from Washington, D.C., some executives said at a meeting here.

The Financial Industry Regulatory Authority has begun examining municipal bond dealers' compliance with the Municipal Securities Rulemaking Board's recently released interpretive guidance to Rule G-17, which spells out underwriters' fair-dealing obligations to municipal issuers.

Rep. Mike Coffman, R- Colo., has introduced legislation that would allow governmental and 501(c)(3) nonprofit bonds to be refunded a second time so that issuers and borrowers could save money by taking advantage of low interest rates.

Timothy Ryan, president and chief executive officer of the Securities Industry and Financial Markets Association, had the highest compensation level among the leaders of 22 self-regulatory, dealer, governmental and other groups in the muni market, according to the latest forms the groups filed with the Internal Revenue Service.

Middle-market municipal bond dealers are banding with issuers, analysts and others to form Municipal Bonds for America, a coalition created to head off threats to the tax-exempt status of munis.

Non-dealer municipal advisors contend some muni bond underwriters are engaging in financial advisory activities with an issuer, despite a Municipal Securities Rulemaking Board rule prohibiting them from serving in both roles in the same transaction.

Regulatory efforts to promote muni market transparency have not reduced prices paid by retail investors for newly-issued muni bonds, according to study of muni bond trades by University of Notre Dame finance professor Paul Schultz.

The Securities and Exchange Commission's Office of Municipal Securities began reporting to SEC chairman Mary Schapiro as of Sept. 24, an attorney in the muni office said Thursday.