May 25, 2017

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

Editor's Note: The next edition of ComMUNIcations will be published on June 8.


Fiscal Year 2018 Budget Addresses Infrastructure Initiatives
President Trump’s Fiscal Year 2018 Budget was released on Tuesday and the administration’s Infrastructure Initiative Fact Sheet was released on Wednesday. The plans call for $200 billion in outlays, over the next ten years, for infrastructure investment. The $200 billion is to be leveraged, alongside non-Federal funding, to pay for $1 trillion in total infrastructure spending. The proposal also calls for corporatization of the air traffic control system, reform of the Inland Waterways Trust Fund, and a reduction in Federal grants to Amtrak. The transportation plan specifies an expansion of the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, as well as lifting the cap on Private Activity Bonds for highways and liberalizing the use of tolling on Interstates. The budget calls for an elimination of the Transportation Investment Generating Economic Recovery (TIGER) Grant Program, and reduced the Department of Transportation’s total budget by 13% from its 2017 level. The administration also called for the regulatory and permitting review to speed the construction of infrastructure projects. At a hearing of the Senate Finance Committee on May 25, on the 2018 budget and tax reform, Treasury Secretary Steven Mnuchin said in response to questioning, “Our preference is strongly to keep the interest deductibility of state and local bonds.”
U.S. Administration’s Fiscal Year 2018 Budget
Infrastructure Initiative Fact Sheet

MSRB to Establish Continuing Education Requirements for Municipal Advisors
The Securities and Exchange Commission (SEC) has approved plans for the Municipal Securities Rulemaking Board (MSRB) to establish continuing education requirements for municipal advisor firms. The requirements will go into effect on January 1, 2018, and firms will have one year to comply with the requirements, which include completing a needs analysis, developing a training plan and implementing training. The MSRB will provide implementation guidance to assist firms with compliance.
MSRB Press Release

SEC and MSRB to Hold Webinar on Series 50 Exam for Municipal Advisors
On May 23rd, the SEC and the MSRB announced a joint educational webinar, scheduled for Thursday, June 15th from 3:00-4:00 p.m. EST. The webinar will address the professional qualification requirements for municipal advisors and provide information on signing up for the MSRB’s Series 50 exam, preparing for the exam, and complying with the SEC’s registration requirements.
MSRB Press Release
Webinar Registration

Market sees common ground in need for disclosure of alternative debts
At the Government Finance Officers Association’s Debt Committee meeting on May 20th, market participants commented that they should work closely to ensure requirements from the SEC on disclosing issuers’ alternative debt is focused on the areas of disclosure generally agreed on by the market. Michael Decker, managing director and co-head of munis at SIFMA, noted that most market participants “aren’t griping about disclosing bank loans.” “If the proposal said bank loans, direct placements and swaps, I think you wouldn’t hear so much pushback,” Decker said. “It’s the virtually unlimited aspect of the rule and the vagueness of what to treat as material, and what not to treat as material, that creates the problems.”
The Bond Buyer Article
SIFMA Comment Letter on Proposed Amendments to Disclosure Rule (May 15, 2017)



SIFMA Blog Post: America's Infrastructure – The Time to Build is Now
May 15-19, 2017, marked the fifth annual Infrastructure Week – a clear reminder that strong, resilient infrastructure is critical to our country's economic growth and vitality; yet we continue to fall behind due to crumbling and outdated roads, bridges, rails, airports and seaports, water pipes and the power grid. This has not gone unnoticed. With heightened recognition of infrastructure needs across the country – including growing bipartisan support – why is infrastructure still in crisis? SIFMA believes the infrastructure problem lies in the ability to identify reliable funding sources. This blog post discusses the case for making U.S. infrastructure projects a priority and the issues that may affect our ability to pay for them.

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 2017 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.

Long-term Securities Issuance Up 13.1% Year-Over-Year: New Data from SIFMA Research
Long-term securities issuance totaled $1.90 trillion in 1Q 2017, an 18.7 percent increase from $1.60 trillion in 4Q 2016 and a 13.1 percent increase year-over-year from $1.68 trillion. Issuance increased quarter-over-quarter across all asset classes except for municipal, mortgage-related and asset-backed securities.  Year-over-year growth was positive in all asset classes except municipal debt. SIFMA’s Research Quarterly is a flagship report containing brief commentary and statistics on the U.S. capital markets, including but not limited to: municipal debt, U.S. Treasury and agency debt, short-term funding and money market debt, mortgage-related, asset-backed and CDO debt, corporate bonds, equity markets, derivatives, and the primary loan market.



Explore developments in AI, Machine Learning & more at SIFMA’s FinTech Conference
New developments in robo advising, robotics, artificial intelligence, machine learning and blockchain experiments have the potential to reshape securities markets and processes. SIFMA’s FinTech Conference, to be held on two half days, June 5–6 in NYC, will bring together innovators, industry leaders and regulators to discuss these developments and the impact on firms, their operations, and regulation. Seats are limited – register today!

Program Available – SIFMA’s C&L Boston Regional Seminar, June 7
The next Compliance & Legal (C&L) Regional Seminar will be held in Boston at the Seaport Hotel and Seaport World Trade Center on June 7. This one day seminar will feature presentations by leading securities regulators and industry professionals discussing topics on Broker-Dealer & Investment Advisory, Key Legal and Regulatory Issues, Asset Management, Cybersecurity, and more! Paul Levenson, Director of the Boston Regional Office for the U.S. Securities and Exchange Commission, will deliver the featured presentation.

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