SIFMA Managing Director and Associate General Counsel Discusses Municipal Markets
SIFMA Managing Director and Associate General Counsel, David Cohen, published an opinion piece on SIFMA's Pennsylvania + Wall blog titled, "Muni Markets: Let the Sun Shine In," where he discussed how to improve the municipal markets.
According to Mr. Cohen, for investors who primarily deal in equity markets, the municipal bond market seems "opaque." He explained that regulation may be able to enhance the way municipal market functions, although there would remain material differences between the municipal securities market and the listed equities market.
As to the municipal market, Mr. Cohen advocated for a stronger execution standard, including a best-execution rule similar to the one that governs equities and other fixed-income markets. The rule, according to Mr. Cohen, would require municipal bond dealers to "diligently search" for the best price for a customer.
Furthermore, with regards to data transparency, Mr. Cohen noted that the "access equal delivery" model for primary market disclosures has been successful in allowing customers to decide what information they want to view. Mr. Cohen encouraged regulators to adopt a similar model for the municipal market. He cautioned, however, that copying the existing standards from equity and other fixed income markets is "simply unfeasible;" rather, changes in the market should be driven by market participants.
See: Mr. Cohen's Post: Muni Markets: Let the Sun Shine In.Related news: SEC Approves MSRB's Best-Execution Rule (MSRB Regulatory Notice 2014-22) (December 8, 2014); SEC Commissioner Stein Proposes More Municipal Market, Private Equity Fund and ETF Transparency (November 21, 2014);MSRB-Proposed Professional Qualification Standards for Municipal Advisors Published (Fed. Reg.) (December 5, 2014); MSRB to Publish Disclosures about Municipal Asset-Backed Securities (MSRB Regulatory Notice 2014-21) (November 25, 2014); MSRB Issues Two Podcasts: "Being a Regulated Municipal Advisor" and "Providing Disclosure Information to Investors'' (November 5, 2014); MSRB Issues Regulatory Notice Regarding SEC's Approval of First Municipal Advisor Rule and Other Amendments (October 24, 2014); MSRB Announces New Resources on Disclosures to Municipal Bondholders (September 18, 2014).