| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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B-Ds unveil game plans related to muni disclosure |
InvestmentNews - March 13, 2011 - By Jessica Toonkel
As regulators increase scrutiny of municipal bond sales, Wells Fargo Advisors LLC, J.J.B. Hilliard W. L. Lyons LLC and Commonwealth Financial Network are among the broker-dealers that are considering changes in how financial advisers disclose material events about muni bonds to clients.
In September, the Financial Industry Regulatory Authority Inc. and the Municipal Securities Rulemaking Board issued guidance about what brokers need to do to stay abreast of material events related to muni securities and how to communicate these events to clients.
One of the problems that Finra has come across in its examinations is that sometimes a broker will say, “That bond was AAA when I sold it,” Malcolm Northam, director of fixed-income regulation at Finra, said during a panel discussion Monday at the regulator's Fixed Income Conference in New York. “That's not good enough,” he said.
And continued disclosure of material information about muni bonds to customers is likely to become a mandate for all brokers once the Securities and Exchange Commission's fiduciary standard of care is finalized, said Ernesto Lanza, general counsel at the MSRB.
“Under the fiduciary standard of care, brokers' entire relationships with the customers would change, and they would have to disclose these events on an ongoing basis,” he said.
That would be no small task, said Matt Fabian, managing director at Municipal Market Advisors. As of March 8, there were already 28,119 filings from muni bond issuers, according to MMA.
“It's an immense logistical issue,” Mr. Fabian said. “Municipal bonds are a much heavier lift for brokers.”
One problem is that brokers aren't compensated to stay on top of all the material information related to muni securities, Mr. Fabian said.
“There is no trail fee like brokers get when they sell mutual funds,” he said.
Many broker-dealers already struggle with how they can verify that their advisers communicate material information to clients on a real-time basis.
Wells Fargo Advisors, for instance, is discussing restricting the sale of such bonds to only those investors who have e-mail addresses so that it can confirm that brokers disclosed material events about muni bond issuers on a continuing basis and that clients received those notices, Craig Noble, director of fixed-income trading at the firm, said during the panel discussion.
“This is the only way to avoid a client coming back and saying, "My broker never told me that,'” he said after the discussion.
Given how much turnover goes on in the brokerage community, it can be very difficult for firms the size of Wells Fargo, which has 15,000 brokers, to confirm continued communication of material events, Mr. Noble said.
For the complete article.
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