Law and regulation

The Municipal Securities Rulemaking Board is proposing two clarifying exceptions to its rule preventing dealers from buying or selling bonds below their stated minimum denominations

The Municipal Securities Rulemaking Board plans to weigh complaints it recently received on a proposal for determining markups, as well as comments on close-out procedures for dealers, during its meeting next week.

Most municipal bond analysts believe Chapter 9 bankruptcy is taboo for municipalities and should be avoided, according to an analyst survey by PNC Capital Markets LLC.

The Municipal Securities Rulemaking Board and Financial Industry Regulatory Authority warned firms on Monday that they need to conduct adequate due diligence to determine if bank loans and private placements involve municipal securities.

Issuers and dealers are criticizing as incompatible with the municipal bond market the Municipal Securities Rulemaking Board's proposed rule changes to establish a process for determining markups and markdowns that may have to be disclosed to retail investors.

The Federal Reserve on Friday released final rule changes to treat more municipal securities as high-quality liquid assets under liquidity requirements for large financial institutions, but critics complain they do not go far enough and could hurt the muni market.

The Supreme Court’s refusal to take up a case on the Securities and Exchange Commission’s use of administrative proceedings to impose penalties in enforcement cases prompted a law firm to recommend those subject to administrative proceedings to challenge their constitutionality.

New best-execution regulations fail to call for or help establish what is missing in the fixed income market – a consolidated quote feed.

Bradley Wendt of Charles River Associates provides market context to the MSRB’s 2016 mandate that “best execution,” a hallmark of the taxable fixed income and equity markets, becomes a staple for retail municipal bond investors.

Some investors holding millions of dollars of bonds in default in the Florida panhandle are upset by what they see as inaction by trustee Bank of Oklahoma Financial and a fired employee with links to accused fraudster Christopher Brogdon.

The Municipal Securities Rulemaking Board has issued a concept release on whether it should require municipal advisors to disclose information about the bank loans or privately placed municipal securities of their issuer clients

House members are considering legislation for Puerto Rico that would mandate the creation of a federal oversight board and make it responsible for restructuring the territory’s debt and determining the priority of debt obligations and pension payments, several sources said on Wednesday.

The best execution rule, which took effect this week, may solidify a market shift concentrating retail customers in a few large firms, while others seek just to keep their institutional business running smoothly, market participants said.

Several of the Supreme Court Justices seemed sympathetic with Puerto Rico’s complaints that a federal appeals court ruling striking down its debt recovery law for its utilities leaves it “in a no man’s land” where it “is not entitled to the benefits,” but “ is subject to the burdens” of Chapter 9.

The Securities and Exchange Commission on Friday approved a Municipal Securities Rulemaking Board proposal that extends MSRB board term lengths to four years from three.

Republican lawmakers from both the Senate and House introduced legislation on Thursday that would make the courts, rather than federal agencies, responsible for interpreting and determining the reasonableness of federal rules.

The Financial Industry Regulatory Authority has censured and fined Edward Jones $200,000 for misrepresenting taxable customer interest as tax-exempt and failing to adequately monitor its supervisory systems meant to address short positions the firm had in municipal bonds.

For the first time in the municipal securities market, the Securities and Exchange Commission on Tuesday charged a municipal advisory firm, its chief executive officer, and two of its employees for breaching their fiduciary duty by failing to disclose a conflict of interest to a municipal client.

The Securities and Exchange Commission’s Division of Investment Management has issued a guidance document urging funds with exposure to Puerto Rico debt to continually update their disclosures based on the risks associated with their investments.

Issuers are not likely to change the Securities and Exchange Commission staff’s minds about the violations they have disclosed under the commission’s municipal self-reporting initiative, the commission’s top cop for municipal securities enforcement said on Thursday.