Regulator weighs muni transparency issues

MSRB seeks comments on whether more information about municipals should be disclosed.
FEB 15, 2008
By  Bloomberg
A municipal bond regulator will seek comment on whether banks and securities firms should reveal more information on bidding for auction-rate bonds. The Municipal Securities Rulemaking Board, the primary muni bond regulator, will consider a notice within the next two to four weeks, seeking industry comment on what metrics should be used to increase transparency, according to Lynette Hotchkiss, executive director of the MSRB. This group has been working with the Securities and Exchange Commission to enhance disclosures on the auction process. Currently, investors only have access to the price of the bonds. “We’ll be looking at clearing rates, reset rates, and other kinds of information that might be helpful to the investors and issuers,” said Ms. Hotchkiss. These bonds are long-term debt securities with an interest rate that can reset every seven, 28, or 35 days. The bids banks and securities firms submit determine the reset interest rates. The action follows a series of recent bond auction failures, in which the banks and dealers which are underwriting the sales have stepped back from purchasing the debt after bidders shied away from buying the securities. UBS AG and Merrill Lynch and Co., along with other juggernaut banks, have pulled away from auction-rate muni bonds that don’t bring in enough bidders, insiders told Bloomberg. “The banks’ stresses on their balance sheets are backstopping the auctions,” said John Pomeroy, senior vice president and portfolio manager of the municipal bond department at Franklin Templeton. “When we run into cycles of stress, the markets react. Weak credits will see their spreads widen.”

Latest News

UBS sees a net loss of 111 financial advisors in the Americas during the second quarter
UBS sees a net loss of 111 financial advisors in the Americas during the second quarter

Some in the industry say that more UBS financial advisors this year will be heading for the exits.

JPMorgan reopens fight with fintechs, crypto over fees for customer data
JPMorgan reopens fight with fintechs, crypto over fees for customer data

The Wall Street giant has blasted data middlemen as digital freeloaders, but tech firms and consumer advocates are pushing back.

The average retiree is facing $173K in health care costs, Fidelity says
The average retiree is facing $173K in health care costs, Fidelity says

Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.

Advisor moves: NY-based Coastline wealth adds three teams with over $430M in assets
Advisor moves: NY-based Coastline wealth adds three teams with over $430M in assets

Raymond James also lured another ex-Edward Jones advisor in South Carolina, while LPL welcomed a mother-and-son team from Edward Jones and Thrivent.

Fintech bytes: Vestwell comes through for underserved savers with multilingual support
Fintech bytes: Vestwell comes through for underserved savers with multilingual support

MyVest and Vestmark have also unveiled strategic partnerships aimed at helping advisors and RIAs bring personalization to more clients.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.