SEC recommends municipal security reform amid bankruptcies
the__photographer via Flickr
The Securities and Exchange Commission called for structural improvements of the $3.7 trillion municipal securities market amid a recent uptick in city bankruptcies, according to a report released today.
“The municipal securities market is the bedrock for funding of local government projects throughout our country. It is essential that the market work well and that investors have confidence in it,” Mary L. Schapiro, chairman of the SEC, said in a statement. “While we have put in place measures to help investors make more knowledgeable decisions about municipal securities, we could do more for investors with statutory authority to improve disclosure and muni market practices.”
The recommendations grew from concerns raised by investors and others in public field hearings and meetings.
Despite it being a $3.7 trillion market, the municipal bond sector has been generally unregulated because of exemptions under federal securities laws, according to a statement from the SEC.
The report recommends better disclosures to investors, allowing the IRS to share information with the SEC and providing enforcement for continuing disclosure agreements and other obligations.
Recommendations from the SEC come as many cities in California default on debts.
Some experts are concerned that the increase in bankruptcy is a sign that insolvency for municipalities is losing it’s stigma.
“Do I expect more? Yeah, but I don’t expect a tidal wave,” Dick Larkin, director of credit analysis for Herbert J. Sims & Co. in Iselin, N.J., told Bloomberg. “I am starting to wonder whether or not the stigma of bankruptcy in California is going to be taken more lightly now.”
EMAIL: email@example.com, TWITTER: @joeyferguson
- Dave Ramsey says: Don't leave an estate with...
- Renewable energy advocates decry proposed...
- Battered by recalls, GM buoyed by its large SUVs
- Balancing act: Survey says lack of balance,...
- Z'Tejas closing after 13 years at The Gateway
- The Gateway adding new dining concept
- Protesters from across U.S. arrested at Utah...
- Family feud sparks revolt at grocery store...
- Renewable energy advocates decry... 15
- Protesters from across U.S. arrested at... 13
- Obama gives protection to gay,... 7
- New solar energy project at Utah... 6
- Dave Ramsey says: Don't leave an estate... 5
- Parks visitors spent $596M in Utah last... 5
- Balancing act: Survey says lack of... 4
- Beef pollutes more than pork, poultry,... 2