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
- Women innovators leading by example
- More Americans spending at least half their...
- Retiring overseas is more than a matter of money
- Mitt Romney tells UVU grads to 'live a large...
- Money doesn't necessarily equate to job...
- Historic Salt Lake building now home to...
- 19 Mother's Day gift ideas for moms with...
- Michelle Singletary: Stop picking on the poor
- Mitt Romney tells UVU grads to 'live a... 22
- More Americans spending at least half... 14
- Proposed trade legislation could boost... 5
- US factory activity improves in April,... 3
- Women innovators leading by example 3
- We finally understand what robots mean... 2
- Money doesn't necessarily equate to job... 2
- Exxon's 1Q profit falls 46 percent amid... 1