July 20, 2017

Muni ComMUNIcations - Legislative, regulatory and tax news for municipal securities


SIFMA Testifies at House Subcommittee Fixed Income Market Structure Hearing
Randy Snook, Executive Vice President at SIFMA, testified before the House Committee on Financial Services Subcommittee on Capital Markets, Securities, and Investment in a hearing entitled “A Review of Fixed Income Market Structure.” The U.S. fixed income markets are truly without parallel with total outstanding debt of nearly $40 trillion dollars. On average, $775 billion of securities are traded each and every day. SIFMA believes that policymakers have the ability to enhance economic activity through tailored recalibration of regulations affecting our capital markets. “The cumulative impact of post-crisis reforms must be studied and reconsidered to ensure that our capital markets are providing funding in the most efficient way possible,” said Snook in his testimony. “This is particularly important since private credit extended to households and nonfinancial businesses has grown at a slower pace than in all recoveries in the past 60 years.” This recalibration could help jumpstart the economy without sacrificing financial stability.

SIFMA’s statement to the subcommittee touches on a number of issues specific to the municipal market, including how municipal securities trade in the secondary market and how market participants are regulated. SIFMA also discussed three specific regulatory issues, including disclosure of markups on retail transactions, municipals as High Quality Liquid Assets under the Liquidity Coverage Ratio rule, and possible action on pre-trade price transparency.
Written Testimony
SIFMA Hearing Summary

SIFMA Submits Tax Position Paper to Senate Finance Committee, Including Comments on Preserving the Municipal Bond Tax Exemption
On July 17, SIFMA submitted an updated position paper on tax policy to Senate Finance Committee Chairman Orrin Hatch, which included a section on the federal tax exemption for municipal bond interest. SIFMA recommended the following initiatives for comprehensive expansion of federal investment in infrastructure: 1) Preserve the federal tax-exemption for interest earned by investors on bonds issued by states and localities to finance infrastructure, 2) Expand the use of “private-activity” tax-exempt bonds for infrastructure, 3) Provide a tax credit for equity investors in infrastructure projects, and 4) Reinstate “direct pay” bonds for infrastructure.
SIFMA Tax Position Paper

Puerto Rico Oversight Board Approves GDB Debt Restructuring
A plan has been approved to restructure Puerto Rico’s Government Development Bank (GDB), formerly the chief financial advisor to the country’s government and authorities, to deal with its $4.8 billion debt. The deal entails three bond restructurings to reduce principal by 25% to 45%. An amended fiscal plan for the GDB was also approved by the Board, which will oversee the winding down of the GDB’s operations.
The Bond Buyer Article



SIFMA Research: U.S. Municipal Credit Report, First Quarter 2017
According to Thomson Reuters, long-term public municipal issuance volume totaled $86.5 billion in the first quarter of 2017, a decline of 13.4 percent from the prior quarter ($99.9 billion) and a decline of 9.5 percent year-over-year (y-o-y) ($95.5 billion). Including private placements ($3.0 billion), long-term municipal issuance for 1Q’17 was $89.4 billion. Year to date ending March 31, municipal issuance volumes were generally in line with the 10-year average of $82.6 billion. The municipal bond credit report is a quarterly report on the trends and statistics of U.S. municipal bond market, both taxable and tax-exempt. Issuance volumes, outstanding, credit spreads, highlights and commentary are included.

Interactive Database from SIFMA Research: Capital Markets in Your State
View and download state-by-state data on corporate, equity and municipal issuance; top public companies; securities industry employment; and more. Explore this interactive database to find the companies and municipalities in your state that are accessing the capital markets to drive economic growth.



Register Today for C&L San Francisco Regional Seminar
Join SIFMA’s Compliance & Legal Society in San Francisco on August 3rd for a regional seminar at Charles Schwab. This year’s program will provide updates on topics currently impacting compliance and legal professionals working in the financial services industry. Register today to connect with securities regulators and network with your fellow industry professionals. Early bird rates end tomorrow, July 21st.

Program Preview: Treasury Secretary Mnuchin to Keynote SIFMA’s Annual Meeting - Oct. 23-24 in Washington DC
SIFMA welcomes Treasury Secretary Steven Mnuchin; Abigail Johnson of Fidelity Investments; David Solomon of Goldman Sachs; and Warren Stephens of Stephens Inc. for one-on-one conversations at The Capital Markets Conference. Returning to Washington, D.C. on October 23-24, the conference features candid conversations and in-depth breakout sessions on the state of America’s capital markets, including today’s business, economic and financial regulatory outlook. Join us for expert insights and unparalleled networking with the foremost policymakers, regulators and financial market experts. Early bird rates now available. SIFMA’s Annual Meeting: Where the capital markets meet.

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