Washington

Municipal market participants will once again see an active year for enforcement in 2016 as the Securities and Exchange Commission's self-reporting initiative largely wraps up and the enforcement division mixes a continued focus on pricing and market structure actions with potential new areas for enforcement like municipal advisors and bank loans.

The Securities and Exchange Commission has approved the Municipal Securities Rulemaking Board's core conduct rule for municipal advisors, despite its controversial ban on principal transactions.

The Municipal Securities Rulemaking Board filed proposed rule changes with the Securities and Exchange Commission on Wednesday to extend its political contributions rule to non-dealer municipal advisors and MAs soliciting business for dealers, advisors or investment advisors.

Dealer groups want the Municipal Securities Rulemaking Board and Financial Industry Regulatory Authority to adopt the same approach, but one that is less costly and burdensome, for requiring dealers acting as principals to disclose to retail customers the markups and markdowns on muni trades.

Rep. Luke Messer, R-Ind., and local finance officers plan to continue to push a bill that would treat investment grade and actively traded municipal securities as high quality liquid assets under a bank liquidity rule adopted by bank regulators in 2014.

Municipal market groups are generally supporting a Municipal Securities Rulemaking Board proposal to speed up settlements of muni transactions to two from three days.

Members of the Government Finance Officers Association raised concerns with the Securities and Exchange Commission's proposed rule changes that would require open-end mutual funds and exchange traded funds to take steps to manage liquidity risks so they could handle redemptions during periods of financial stress.

An Alabama federal judge entered judgments approving settlements in the Securities and Exchange Commission’s cases against former JPMorgan bankers Douglas MacFaddin and Charles LeCroy, who were accused of wrongdoing in the Jefferson County, Ala. sewer financings.

Fifteen organizations are urging members of the House of Representatives to vote on a proposed bill that would treat investment grade and actively traded municipal securities as high quality liquid assets under a bank liquidity rule adopted by bank regulators in September of last year.

The FBI arrested 10 Puerto Rico officials and businessmen in a corruption probe, dealing a blow to the government as it looks to resolve its financial crisis.