ASA Warns SEC Against New and Disruptive Municipal Bond Market Regulations

WASHINGTON – The American Securities Association (ASA) today sent a letter to the Securities and Exchange Commission (SEC) expressing its concerns regarding the Commission actively considering new and potentially disruptive regulations for the municipal bond market.

“Municipal bonds facilitate the financing of schools, local infrastructure and water projects, public health facilities including hospitals, affordable housing, renewable energy, and other critical projects that benefit the environment and enhance the quality of life for millions of Americans,” ASA CEO Chris Iacovella wrote in the letter. "There is no body of research, investor demand, or market failure that would suggest fundamental changes to municipal market regulation are warranted.”

“Broad new mandates that disrupt an otherwise well-functioning market can inflict great harm on investors and raise costs for municipalities looking to issue debt,” Iacovella wrote. “We urge the SEC to only address true market failures through regulation.”

In the letter, ASA cautioned against a requirement that all municipal bond trades be reported to the MSRB within one minute of being executed and outlined how the current economic environment, which consists of increasing inflation and the Federal Reserve rolling fixed income securities off of its balance sheet, will undoubtedly impact markets and liquidity in ways we do not yet understand.

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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.