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Rules & Regulations

SEC Proposes More Disclosures for Municipalities

March 2, 2017

[Photo:  Town Hall in Stokesdale, North Carolina]


States, cities, schools and other municipalities are increasingly relying on bank loans and private placements for their financing needs. This has prompted concerns – in part by the National Federation of Municipal Analysts - that problems with that debt could affect the prices of the issuers' publicly sold bonds.


In response, the SEC seeks to amend Rule 15c2-12 by requiring disclosure of bank loans and other private financial deals entered into by municipal bond market issuers – along with other material events that currently must be disclosed. In addition, any related actions - such as defaults or loan term modifications that would indicate financial difficulties on the part of the muni issuer - would have to be disclosed.


As proposed, municipal brokers, dealers and underwriters would be required to ensure that issuers disclose this information to the MSRB within 10 business days of its occurrence. Currently, such disclosure by issuers is voluntary.


The SEC will seek public comment on the proposal before taking its final action.