| 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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SEC to Recommend Muni-Market Changes |
THE WALL STREET JOURNAL - May 9, 2010 - By DAISY MAXEY
WASHINGTON—The Securities and Exchange Commission will conduct field hearings across the country, then recommend specific changes to better protect the municipal-securities markets, said Andrew J. Donohue, director of the commission's Division of Investment Management, at Friday's mutual-fund convention.
It's surprising that such an important market to investors and taxpayers doesn't have more oversight, and all suggestions should be on the table, Mr. Donohue said.
He made his comments as the third and final day of the 52nd annual membership meeting of the Investment Company Institute, the mutual-fund industry trade group.
Mr. Donohue spoke in place of SEC Chairman Mary Schapiro, who chose not to attend, but instead to follow up on the unusual, harrowing trading activity that took place Thursday.
Among the ideas to be considered to better protect the muni markets are required disclosure of financial information on a regular basis, mandatory use of uniform accounting standards, ensuring that private issuers meet appropriate disclosure standards, mandating scenario tests by muni issuers, and periodic disclosure of the impact certain key events might have on an issuer to meet its debt obligations, Mr. Donohue said.
Such actions among others would make the risks inherent in muni markets far more visible to investors, broker-dealers, taxpayers and the SEC alike, he said.
In addition, bad practices such as pay-to-play, conflicts of interest and guidance from bad advisers must be eliminated, Mr. Donohue said. Financial advisers should be prohibited from serving as an adviser to an issuer, then underwriting the issuer's bonds, for example, he said.
Investors hold $2.8 trillion in municipal debt today, and about 35% of that is municipal bonds held by investors, Mr. Donohue said.
But investors today don't always have access to the type of information needed to evaluate municipal securities, something the SEC is already working to change, Mr. Donohue said. More transparent, reliable and timely information on municipal securities would allow regulators and markets to better understand the securities' risks and reward, he said.
Under existing laws, the SEC's authority over municipal issues is expressly constrained, Mr. Donohue said. For example, it can't require corporate borrowers to make complete disclosure that a corporate stock offering would require, he said.
"Regulators and investors should have the information they need to evaluate municipal securities," Mr. Donohue said.
Among the questions that must be asked are whether there is enough clarity about funding obligations and expense revenues, whether there is too much dependence on credit-ratings firms by municipal investors, and whether the lack of uniformity in municipal disclosure contributes to the lack of understanding, he said.
Such questions are important "because individual investors and mutual funds have become the main source of liquidity in the municipal market," Mr. Donohue said.
Write to Daisy Maxey at daisy.maxey@dowjones.com
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