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

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.