Proposed money market reforms could increase the cost of borrowing for municipalities by up to $13 billion, according to a claim that Fidelity Investments made to the Securities and Exchange Commission.
The Securities and Exchange Commission voted unanimously in favor of federal supervision of financial advisors who work on municipal bond deals. Elected and appointed government officials are exempt. The rule imposes a fiduciary standard on advisors, requiring them to put a client's interest above theirs. Read SIFMA's comments on the SEC's municipal advisor rules.
New bills working through state legislatures could directly conflict with financial advisors' responsibilities for record-keeping, experts say. Organizations including SIFMA and the Financial Industry Regulatory Authority are working to find a solution. "Firms that prohibit employees from conducting the firm's business using particular social media sites, or any social media sites, must follow up on red flags that may indicate that an associated person is not complying with firm policies," said a FINRA spokesman. Join your peers at SIFMA's Social Media Seminar on Oct. 16 to hear expert views on marketing and practical advice on legal and compliance issues.
Columnist Nick Paraskeva writes that SIFMA has asked the Securities and Exchange Commission to consider changing the self-regulatory status given to exchanges. SIFMA's Randy Snook said in a statement that "the current structure of the self-regulatory model is widely viewed to be outdated and in need of reform." However, the idea of changing the status quo faces a variety of challenges, Paraskeva writes. Register now for SIFMA's Market Structure Conference, scheduled for Oct. 17 in New York.
Easier tax rules and a search for new opportunities as traditional lending activities dry up have boosted banks to the point that they're about to pass money market funds and insurers as holders of municipal securities. Michael Decker, a managing director and co-head of muni securities at SIFMA, and Peter DeGroot, a muni strategist at JPMorgan Chase, said federal tax rules have played a major role in encouraging banks to invest in munis.