Increased disclosure for muni bonds
Wednesday 3 August 2011 - by Andrew Hickley
US municipal bond underwriters will have to inform issuers of any risks and conflicts of interest that could stem from transactions under new proposals released on Tuesday.
The proposals have been put forward to the Securities and Exchange Commission, which must vote to approve the measures in order to put them into law. The MSRB has recommended the rules come into force 90 days after receiving the necessary SEC approval.
The changes also aim to prohibit excessive compensation of underwriters, with their remuneration having to be determined by the "specific facts and circumstances of the offering" to ensure the price paid by the bank is "fair and reasonable" for the issuers' bonds.
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