NEW ORLEANS -- A Securities
and Exchange official expressed
optimism that the commission could tailor its interpretive release on disclosure to meet most industry
objections.
"Where there is a problem, peopl
are capable of dealing with it," Pl
Maco from the SEC's office of
general counsel said on Saturday aa
conference in New Orleans held bye
State Debt Management Network.
"This industry has the capacity to deal with the issues that have bee
put on the table."
Maco said that "it is not the
intention of the commission to app any
of these measures in the extreme."
But industry participants at the conference continued to raise thei
objections.
Kenneth C. Olson, vice president at Goldman, Sachs & Co., said that the disclosure rules requiring dears
to certify that an issuer has
performed proper disclosure before selling the issuer's bonds could cate a
stratified market.
"This puts an enormous burden on the secondary market," Olson said. "Firms would have to establish a lt
of approved securities.
For the 300 or so most active
issuers, firms would be able to ma
trades much as they do now, he sai
Then, for "another significant
portion of the market, we could ma
sure that we could access informatn
to do a trade," Olson said. "That
would slow the trading process,
probably by several days, and probly
raise the costs."
Finally, for the remaining issue
"we wouldn't do trades," he said.
R. Fenn Putman, managing
director at Lehman Brothers and
chairman of the Public Securities
Association, raised concerns that,nder the
"significant obligors" rule, state
might have to update their disclose
every time a locality that receive
state aid issued bonds.
He also reiterated his concern tt
while the commission expected extr
disclosure for derivatives, the
industry does not have an agreed un
definition of the term. "We need alear,
clean definition," he said.
But Putman also finished on an
optimistic note.
"This is really an evolutionary
process that looks like a revolutiary
game," he said. "The conversation
that we're having today will seemke
the dark ages in five years."
Claire Cohen, vice chairman of
Fitch Investors Services, urged th
the standards for seasoned issuerse
based more on the frequency of
market access than the amount of dt
outstanding.
In cases where disclosure is
"integrated" into official statemes,
"there is a need for a good new
developments section," Cohen said.
Although some have urged that
highly rated bonds be exempted fro
the disclosure rules, Cohen
disagreed.
"Is a rating alone sufficient fo
disclosure? In my own opinion, it not
sufficient," she said.
Jeffrey S. Green, general counseat
the Port Authority of New York and New Jersey, recommended against
using the Municipal Securities
Rulemaking Board as a repository f
disclosed information.
"The worst thing the commission
could do would be to design a syst
where the MSRB would be directly
involved in gathering and
disseminating information," Greenid.
"They're just not geared up to do
that."
Green also urged the SEC to avoi
dictating the form and content of
disclosure.
"The commission, in their
proposed rules, has come perilousl
close, but they have not crossed t
line in my view," he said.
Political contributions should n
be disclosed, Green said, arguingat
the information is not relevant to investors.
"That's using a rumor standard
instead of a materiality standard.t's
just not relevant from a standpoinof
bringing bonds to market," he said
