| NEW YORK, Sept 27
NEW YORK, Sept 27 The Securities and Exchange
Commission is getting closer to completing its plan to beef up
the timeliness and quality of financial disclosures by states,
cities and other issuers in the U.S. municipal bond market, an
official said on Tuesday.
SEC Commissioner Elisse Walter said the commission's staff
have moved from evidence-gathering to the writing of rules, but
she stopped short of saying exactly when the plan, which will
include an update of anti-fraud provisions, will emerge.
"The report will focus on the short-run answer to
disclosure requirements," Walter said in a video appearance
before the Securities Industry and Financial Markets
Association's Municipal Bond Summit.
She added that SEC staff was focused on what is practicable
and not "pie in the sky."
"They are looking for incremental changes," she said.
In the longer-term, Walter said she hoped the SEC would
focus more on fixed-income markets.
Walter held a series of hearings on the muni market around
the United States this year. She said the hearings had
underscored problems with interest swaps, including conflicts
of interest in their pricing and the ability of municipal
officials to fully understand swaps.
Last summer, Congress passed a sweeping financial
regulatory overhaul that changed oversight of the $3.7 trillion
market. Since then, the SEC put the market under the microscope
and began considering how to carry out the law's emphasis on
investor protections, such as providing bond buyers with more
As for disclosure, Walter said she did not believe the SEC
would try to repeal the Tower Amendment, long a sacrosanct part
of securities law, that issuers have said protects them from
federal intervention in their finances.
Recently, the SEC has taken a literal interpretation of the
amendment, noting it simply bars the federal government from
requiring issuers to file securities documents before the bonds
Still, Walter said if disclosure standards are set, the SEC
would need some kind of authority to enforce those standards.
The SEC, which won a settlement last year with New Jersey
over questionable pension statements, also needs more options
or tools to go after governments, according to Walter.
"If there is a problem, we are stuck with a nuclear bomb
action," Walter said, referring to the SEC's anti-fraud
(Reporting by Karen Pierog, additional reporting by Lisa
Lambert in Washington; Editing by Kenneth Barry)