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| 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
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
|
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)
|
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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Changes urged for municipal bonds |
Bloomberg News - October 4, 2007
WASHINGTON - Former Securities and Exchange Commission Chairman Arthur Levitt said the municipal bond market needs "big-time changes" to improve disclosure to investors.
Levitt, who led an investigation that found the City of San Diego failed to disclose a $1.4 billion pension fund shortfall to investors, said the SEC should have the same regulatory power over municipal borrowers that it uses with corporations.
"The problems we have in U.S. corporate pension funds pale compared to what's going on in our municipal markets," Levitt said. "Investors now are investing in the dark."
SEC Chairman Christopher Cox, who became chairman in August 2005, has called on Congress to set new disclosure rules for municipal borrowers, including enhanced disclosure standards and strengthening accounting rules.
Congress should go further and repeal an amendment to the Securities and Exchange Act, known as the Tower amendment, that prohibits the SEC from requiring states and local governments to file offering documents before bond sales, Levitt said.
"Repealing the Tower amendment, which has to be done by Congress, is the way to go," Levitt said, conceding that wasn't likely to happen because of political resistance from state and local officials.
While SEC chairman from mid-1993 until February 2001, Levitt cracked down on the widespread use of political donations to win bond work and fined Wall Street banks more than $170 million for selling Treasury securities at marked-up prices to municipalities.
The 17,000-member Government Finance Officers Association has said new disclosure laws would be costly and unnecessary because municipal bonds are less risky than other types of debt.
Only 0.1 percent of municipal bonds have defaulted since 1970, according to the Securities Industry and Financial Markets Association, a lobbying group for Wall Street banks.
Although the SEC has the power to police securities fraud, no federal regulator has the authority to compel local officials to disclose all information that could affect the price of their bonds.
The SEC has been prevented from taking action against "at least six major municipalities" because of the Tower amendment, Levitt said, without naming the cities.
The SEC is investigating New Jersey's $80 billion pension fund to find out whether state officials misled investors about lapsed payments to the fund. Gov. Jon Corzine, a Democrat who took office in January 2006, has said the state failed to make required annual contributions in the decade before he took over.
The SEC currently imposes disclosure requirements indirectly by requiring banks to review offering statements for municipal borrowers.
Banks are prohibited from underwriting bonds unless a borrower has taken steps to ensure information, such as annual financial reports, have been disseminated to investors.
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Income Security Recommendation January 2013 Issue.
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