Law and regulation

State and local governments of all sizes are using direct bank loans as an alternative to traditional bond financing, Standard & Poor's said Wednesday, renewing its call for more transparency surrounding bank debt.

The Federal Reserve Board’s decision to delay certain aspects of the Volcker Rule are a plus for the municipal market, a major rating agency and a dealer group said.

The Internal Revenue Service has issued a favorable but limited private-letter ruling concluding a total return swap entered into between a borrower and a bank at the same time the underlying tax-exempt bonds were sold is “not an abusive arbitrage device,” tax lawyers said.

The Securities and Exchange Commission's rule 15c2-12 governing continuing disclosure of issuer financial information is outdated and could be streamlined to reduce the regulatory burden for issuers and underwriters, bond lawyers and underwriters told the SEC.

The Municipal Securities Rulemaking Board will discuss municipal advisor qualification examinations, as well as comments on proposals restricting MA gift giving and requiring dealers to disclose reference prices on confirmation sheets at its quarterly meeting in Alexandria, Va., next week.

Dealers want the Municipal Securities Rulemaking Board to withdraw a proposed rule that would require dealers acting as principals to disclose to customers on their confirmations a "reference price" of the same security traded that same day, urging enhancements to existing transparency systems as an alternative.

The Municipal Securities Rulemaking Board is urging the Securities and Exchange Commission to conduct a review of the disclosure requirements in the SEC's Rule 15c2-12, and to consider requiring disclosure of non-bond debt such as bank loans.

The Government Finance Officers Association is levelling strong criticism at Moody's Investors Service for failing to provide its credit ratings to EMMA and urging the agency to do so.

Syncora Investment Holdings, a wholly owned subsidiary of Syncora Guarantee, Inc., has purchased a majority stake in the independent derivatives advisory firm, Swap Financial Group.

The Financial Industry Regulatory Authority has fined and censured New York-based Gates Capital Corporation $25,000 for failing to report variable rate demand obligation interest rate resets on time.

The Securities and Exchange Commission's examination focuses for 2015 include issues related to protecting retail investors and assessing the compliance of municipal advisor firms, the commission announced Tuesday.

The Securities and Exchange Commission is urging a federal court to accept the settlements it had reached with two former officials of the city of Allen Park, Mich., in November, after the court vacated them a day later and asked for more information.

Dealers want the Securities and Exchange Commission to direct the Municipal Securities Rulemaking Board to use a single qualifications exam for all muni professionals, while the Investment Company Institute wants separate municipal advisor exams tailored to the type of MA work being done.

Municipal Securities Rulemaking Board revenues totaled $32 million in fiscal year 2014, a 19% drop from the previous year, the board's annual report revealed.

The Financial Industry Regulatory Authority's exam priorities for 2015 include making sure that both municipal advisors are complying with registration and other requirements and broker-dealers are meeting minimum denomination restrictions on bonds.

Margaret “Peg” Henry, a lawyer who has worked for municipal securities regulators, congressional tax-writing committees, as well as bond lawyer and underwriting firms, has joined Stifel Nicolaus & Co. as a deputy general counsel.

The Municipal Securities Rulemaking board is accepting applications from individuals knowledgeable about the muni market who want to join the self-regulator's board of directors.

Market participants can expect increased municipal securities enforcement during 2015, a year that may bring resolution of the Securities and Exchange Commission's self-reporting initiative as well as greater emphasis on individual liability and secondary market disclosures.

A lawsuit challenging the Securities and Exchange Commission's investment adviser pay-to-play rule is moving forward in a D.C. federal appeals court, with implications for muni market pay-to-play restrictions hanging in the balance.

This year will bring more municipal advisor and secondary market transparency regulation, while a newly Republican-controlled Senate could lead Congress to scrutinize and possibly ease existing laws and rules.