Law and regulation

Trading activity in the municipal market for the second quarter of this year was 14% higher than the previous quarter as well as the second quarter last year, with several Puerto Rico bonds among the most traded, according to the Municipal Securities Rulemaking Board.

The Municipal Securities Rulemaking Board issued a media advisory on Tuesday warning of possible problems its anti-pay-to-play rule could cause for governors who are running for president and Wall Street firms that may contribute to them.

Nat Singer, senior managing director at Swap Financial Group, will become the new chair of the Municipal Securities Rulemaking Board on Oct. 1.

Faced with requests from dealers to withdraw its proposed principal trade price disclosure rule, the Municipal Securities Rulemaking Board now plans to modify that proposal as well as develop an alternative that would require dealers to disclose markups and markdowns on certain principal trades.

The Municipal Securities Rulemaking Board late Friday filed with the Securities and Exchange Commission revised content outlines to its qualification exams for municipal fund securities limited principals, municipal securities representatives, and municipal securities principals that will bring the tests in line with recent MSRB rule changes.

Bankruptcies in Detroit, Jefferson County, Ala., and three California cities helped spawn a new breed of activist judges, who may use Chapter 9 cases as the platform not just for reorganizing municipal debt, but also for helping set the stage for turning distressed cities around.

The National Association of Bond Lawyers has announced nominees for officers and directors of its board as well as the recipients of its awards.

"Detroit's a much better credit than it was two years ago," its former emergency manager, Kevyn Orr, told a municipal bond market group.

The Municipal Securities Rulemaking Board plans later this year to propose changes to Rules G-37, on political contributions, and G-20, on gifts and gratuities, to extend these dealer rules to municipal advisors, the executive director said on Tuesday.

Proposed rule changes by the Federal Reserve are so restrictive that they would either substantially reduce or exclude municipal securities from being considered high-quality liquid assets in liquidity coverage ratios banks have to meet and, as a result, would hurt the municipal market, dealer groups and issuers are warning.

The Senate Appropriations Committee approved a bill Thursday that would provide $1.5 billion of funding for the Securities and Exchange Commission in fiscal year 2016, the same amount as the fiscal 2015 enacted level and $222 million less than the commission requested earlier this year.

The Municipal Securities Rulemaking Board revised its three online information facilities to add references to the self-regulator's core operational hours and highlight the 24/7 availability of a number of the systems' functions.

A coalition of state and city finance officials led by Rhode Island Treasurer Seth Magaziner wants the SEC to require greater transparency from PE firms that manage public pension funds.

The Municipal Securities Rulemaking Board, at its meeting next week, plans to discuss draft guidance on its best execution rule, its proposal to require dealers to provide pricing information to customers, and the reaction to its bid to ease standards for the public investor representative on its board.

The Government Finance Officers Association took issue with the Municipal Securities Rulemaking Board’s proposed easing of standards for one public board position, saying the changes could affect the balance of power and lead to candidates who do not represent the best interests of investors.

Micah Green, a former president of the Securities Industry and Financial Markets Association, and six others have moved to Steptoe & Johnson LLP’s financial services practice here from Squire Patton Boggs.

The Municipal Securities Rulemaking Board is proposing to create a trade data product that would allow higher education researchers to see what dealers are doing while keeping the dealer identities anonymous.

The Financial Industry Regulatory Authority fined three firms a total of $57,500 for municipal bond trade reporting violations. The self-regulator also suspended a former broker-dealer cashier for six months for fictitious trades.

The Municipal Securities Rulemaking Board’s proposal to ease the independence standard for its public investor slot is “deeply flawed” and “would undermine the very purpose” of Dodd-Frank Act provisions, according to the Securities and Exchange Commission’s Investor Advocate.

The Financial Industry Regulatory Authority is expected to release an investor alert Monday to educate bondholders on liquidity issues that can arise during times of market stress.