Recap
On Thursday, June 22nd, the BDA held its second Heads of Public Finance Roundtable in Chicago, Illinois. The roundtable was attended by over 20 representatives at BDA member firms, which provided a venue for information sharing and discussion on the most recent regulatory and market topics.
Discussion at the roundtable focused on the issues facing middle-market banks and dealers in public finance securities, including municipal advisor rule licensing (Series 50 exam), G-17 supervisory responsibilities, implementation of issue price regulations, compliance with due diligence obligations, and tax reform. You can view the roundtable agenda here and a full recap of the day follows.
Market and Regulatory Discussion Topics
MA Rule Licensing
- Discussion of the separate roles of municipal advisors and underwriters
- MA Rule licensing will be implemented in September
- Discussion of what firms are doing to ensure continued compliance with the rule
- What is the determining factor to register an MA and Series 50 pilot exam review
Post-MCDC Challenges of Disclosure and Due Diligence
- Discussion of whether firms require disclosure counsel or underwriters counsel
- Counsel should understand firm WSPs for firm reviews
- Discussion of standard procedures for due diligence reporting
- What firms use to guide the due diligence process
- Discussion of municipal advisor rules
- Discussion of SEC next steps post-MCDC
Issue Price Guidance
- Recap and review of the newly implemented issue price rule
- Challenges that issuers and underwriters have with the rule
- Discussion of issues when involved in a syndicate or co-managed deal
- Varying bond counsel expectations and requirements
- Discussion of competitive sales/bids and guidance on 10 percent rule
Supervisory Responsibilities and Violations
- MSRB G-17 compliance and review
- Compliance discussion with MA exemptions
- Discussion of documentation and closing procedures and automating the process
- Discussion and feedback on pay-to-play and expense review best practices
Potential Market Implications with Tax Reform
- Review of the administration's current plan and details for tax reform
- Discussion on potential implications for the middle-market and challenges for municipal markets
- Discussion on the vulnerability of the municipal tax-exemption in comprehensive tax reform
- Discussion of political dynamics and outlook for tax reform in 2017/2018
Current Dynamics of Supply & Demand
- Post-election analysis of market dynamics and review of the administrations agenda
- Discussion of issuer confidence post-election
- Discussion of state and bank implications in a rising rate environment
Additional Information:
- Networking Dinner: After the roundtable, participants continued networking over beverages and dinner at Siena Tavern. Quarles & Brady also sponsored the dinner.
- Upcoming Event: BDA will hold another Heads of Public Finance Roundtable at our National Fixed Income Conference in October 2017 (details here).
