The lack of transparency can make it difficult for investors to ascertain whether they are getting a fair price. This secondary market is relatively opaque and investor access to pre-trade pricing information has historically been very limited. But investors in municipal bonds are often not afforded access to the types of timely and accurate information available to investors in other markets.Īdditionally, municipal bonds are not traded on any exchange they trade only in a decentralized, over-the-counter dealer market. The Municipal Securities Rulemaking Board establishes rules, which the SEC reviews, approves and, along with FINRA, enforces, for the municipal securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. Municipal securities are exempt from the registration and reporting requirements of the federal securities laws and municipal issuers therefore are not required to file offering materials, or quarterly or annual reports, with the Commission. ĭespite its importance, this market is substantially less regulated than many others. Estimates are that as much as 69% of outstanding bonds are held directly or indirectly by retail investors. In short, municipal bonds touch every aspect of our lives: if your children attend a public school or a university if you have been treated at a local hospital if you have visited a library, park or sports facility if your parents reside in an assisted living facility if you took the subway, or drove on roads or bridges or through a tunnel today even if you turned on your tap water this morning, you are likely seeing the tangible results and benefits of the municipal securities marketplace.Īnd on the investor side, what is somewhat distinctive about this market is that municipal bonds are held largely by retail investors who hold the bonds either directly or through mutual funds. State and local governments issue municipal securities to finance a wide variety of public projects, to provide cash flow for government needs, and to fund non-profits such as hospitals and colleges. What is not evident from these figures is how critical the municipal bond market is to funding the nation’s infrastructure and, in turn, how important it is to our day-to-day lives. And in 2015 alone, there were over 14,000 new municipal bond issues. And the securities they issue are extremely varied in their credit structures it is estimated that there are over 1 million different municipal bonds outstanding compared to 60,000 corporate bonds. The number of municipal issuers in the United States is estimated to be about 44,000, compared to approximately 8,600 corporate issuers. They include not only political subdivisions like state and local governments, but also public authorities that operate housing, airports, power plants, water sources, and other community services. Issuers of municipal securities range from the nation’s largest states, counties and cities, to the smallest towns and school districts. One overriding characteristic of this market is its diversity. The municipal securities market consists of securities valued at over $3.7 trillion. Background on the Public Finance Marketplaceįrom the perspective of the Division of Enforcement, the public finance market is essentially divided into two significant areas – municipal securities and public pensions. Finally, I will discuss the effects that the Commission’s efforts have had on the public finance market and the behavior of market participants. Then, I will focus on the Commission’s current efforts in this space to expose and address misconduct in this market. I thought I would start my remarks today with some background on the public finance market and discuss the historical context of our actions in the public finance area. Our numerous recent enforcement actions have resulted in significant changes in the public finance market, where the Commission has brought many first-of-their-kind actions and used a range of legal theories and remedies. Public finance, and the municipal securities market in particular, is a critically important area, and one on which the Enforcement Division needs to be, and has been, focused over the last few years. Today I am going to talk about the Commission’s enforcement efforts in the area of public finance. Before I start, I must give our standard disclaimer that the views I express today are my own and do not necessarily reflect the views of the Commission or its staff. It’s a pleasure to speak with you all today. Good afternoon and thank you for that very kind introduction. Keynote Address at Securities Enforcement Forum 2016 Introduction
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |