Reuters: Regulatory News: US muni watchdog ends meeting with eye on transparency

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US muni watchdog ends meeting with eye on transparency Aug 16th 2012, 20:15 Thu Aug 16, 2012 4:15pm EDT Aug 16 (Reuters) - The watchdog for the U.S. municipal bond market concluded a day of meetings with companies that provide indexes and other benchmarks used for pricing debt on Thursday aiming to promote better understanding of the measures. In a statement, the Municipal Securities Rulemaking Board noted that "commercial enterprises and third-party vendors do not fall under MSRB regulatory jurisdiction." "However, the MSRB has a statutory obligation to promote a fair and efficient market," it continued. "To this end, the MSRB is using its unique position in the market to enhance understanding of the use of municipal market indices and benchmarks." The board's president and executive director were not available for comment. The MSRB, a self-regulatory organization that writes the rules the Securities and Exchange Commission enforces, earlier had said it would review how several market indices are prepared in the wake of the scandal involving the London Interbank Offering Rate. On Thursday, it added that recent reports from federal auditors in the Government Accountability Office and from the SEC "spotlight troubling deficiencies in the transparency of our market, particularly the secondary market." "The MSRB is preparing educational materials on the LIBOR market, and about municipal market indices, benchmarks and yield curves," the statement added. The Securities Industry and Financial Markets Association Municipal Swap Index serves as a benchmark floating rate in swap transactions, and typically includes 650 variable-rate debt obligations where the rates reset weekly. Municipal Market Data, a Thomson Reuters company that works with SIFMA on the swap index, and Municipal Market Advisors both publish daily yield indices that are under review. The Bond Buyer also publishes a host of pricing indices, including three that represent weekly averages of yields offered to investors based on estimates provided by underwriters. Link this Share this Digg this Email Reprints

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