Cox calls for muni securities upgrades

SEC chairman Christopher L. Cox delivered Congress a "white paper" calling for upgrades to accounting and disclosure in the municipal securities market. The white paper—which was delivered to the top members of the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services—discusses the size and importance of the municipal securities market, the ways in which it has changed over time, recent enforcement actions, and areas of possible legislative reform. The document proposes a limited regulatory regime designed for the needs of the municipal securities market. Some of the steps include requiring large municipal bond issuers to have policies and procedures for disclosure; clarifying legal responsibilities of issuer officials; ensuring that private companies who access the municipal market indirectly meet the same requirements as corporate issuers; providing for an independent funding mechanism and SEC oversight of the independent accounting standards board; and making information on municipal securities available on a more timely basis. "I hope this staff analysis will contribute to the Congress's ongoing examination of the needs of the municipal securities market and investors in those markets," said Mr. Cox, in a statement. There now are more than $2.4 trillion of municipal securities outstanding, and annual trading now tops $6 trillion, according to the SEC.