Broker-dealers divided over applying rules to small firms

The Municipal Securities Rulemaking Board's request for information on small firms has respondents divided over what rules should apply to those firms and how the board should go about instituting them. "Our members cannot say this strongly enough: there is a tipping point at which the additional costs for broker-dealers to provide marginal improvements in transparency to investors makes the municipal market no longer a good use of the broker dealer's capital," wrote Leslie Norwood, managing director, associate general counsel and head of municipal securities at the Securities Industry and Financial Markets Association.

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Changes in leadership at Treasury haven’t changed the fact that the Office of Tax Policy is still missing a go-to expert with a deep background in tax-exempt bonds, leaving lawyers and other stakeholders to adjust and with some worries it could eventually be a problem. “I wouldn’t say they’re understaffed as much as just missing the tax expert that has dedicated his or her career to tax-exempt bonds,” said Rich Moore a tax partner at Orrick, Herrington & Sutcliffe.

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Municipals were steady in secondary trading Tuesday as several large deals in the primary market took focus, including the retail pricing for the $1.5 billion-plus deal of general obligation bonds from New York City. Other large deals in the negotiated market included Wisconsin with $491.290 million of GO refunding bonds and the Texas Transportation Commission with $346.820 million of State Highway Fund first-tier revenue refunding bonds.

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The Guam Waterworks Authority plans to refund between $134 million and $159 million of revenue bonds and offer a tender on $161.1 million of taxable bonds. "Guam bonds, the only investment-grade, triple tax-exempt paper on the market, always garner excitement amongst investors," said Lester Carlson, director of Guam's Bureau of Budget and Management Research. "We anticipate the same warm reception.”

Read the newest research from The Bond Buyer detailing the public finance industry’s views of the risks and opportunities in 2024.

Interstate 35, which cuts through the heart of downtown Austin, Texas, is set to undergo a major expansion that state transportation officials say is necessary to bring relief to one of the state's most clogged highways that will only get more congested as the population continues to grow. Opponents, who filed a lawsuit seeking to block the central Capital Express project in January, warn the expansion will worsen I-35's historic role as the city's racial dividing line.?

Though it will still feature insightful, in-depth conversations between our reporters and editors and thought leaders from all corners of municipal finance, our long-running podcast will reboot with a format change. Bond Buyer Editor in Chief Mike Scarchilli explains and previews the changes on the horizon.

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