CHICAGO, Oct 24 (Reuters) – The new head of the U.S.
Securities and Exchange Commission’s Office of Municipal
Securities said Wednesday that he will be using a report
released by the agency in July that calls for more oversight of
the municipal market.
“In short, that’s our roadmap for priorities,” John Cross
said at the National Association of Bond Lawyers’ annual
workshop.
The much-anticipated report made it clear the SEC wants to
extend its regulatory reach into the $3.7 trillion municipal
bond market where states, cities, schools and other issuers
raise money for capital projects and cash-flow needs.
The report, which Cross said was endorsed by all five SEC
commissioners, focused on improving issuer disclosures and on
market structure.
On the disclosure front, Cross said his office will be
looking at baseline standards for issuers, as well as an
enforcement mechanism for continuing disclosure, an area that he
cited as being “a real problem.”
Disclosure topics will include pension and health care
liabilities and derivatives exposure of issuers, he added.
As for market structure, Cross said a big theme will be
improving pre-trade price transparency.
He also said he hoped to finalize rules governing municipal
advisors early next year. The so-called Dodd-Frank financial
reform law requires stricter oversight of municipal advisors and
the SEC has wrestled with defining exactly who counts in that
role.
Cross, who worked in the U.S. Treasury’s Office of Tax
Policy before he was tapped for the SEC post in August, said he
hopes to bring “a reasonable and balanced perspective” to his
new position.
