CHICAGO - Securities and Exchange Commissioner Richard Roberts pitched his municipal market crackdown, which includes a ban on campaign contributions and secondary market disclosure, to a Midwest audience on Friday.
Roberts said such initiatives should help strengthen "the integrity" of the market, restore and maintain investor confidence, and improve market efficiency.
Roberts, who said his comments represented his views and not necessarily those of the commission, did acknowledge uncertainty about whether more reforms would be forthcoming this year.
"While there remains more that could be done, particularly in the area of price transparency, whether the commission and the muni marketplace have an appetite for additional reforms in 1994 remains to be see," he said.
Roberts, who spoke at The Bond Buyer's Midwest Public Finance Conference, focused on contributions, saying that "inappropriate" contributions made by municipal securities firms to obtain business highlight a threat to investor confidence, the municipal securities market, and the efficiency of state and local government financing.
"The inappropriate political contribution practices increase the cost of dealer operations, raise artificial barriers to competition, corrupt the role of dealers and their relationship to public investors, and increase expenses to issuers, taxpayers, bondholders and investors," he said.
The commissioner made it clear that not all contributions fall under the Municipal Securities Rulemaking Board's rule, which took effect last week and prohibits campaign contributions aimed at obtaining municipal bond business. In response to a question about a charitable program conducted by the city of Chicago for students, Roberts said the rule has exceptions for charitable contributions.
"A charitable contributions is not our target with the rule," he said. "If a professional channels contributions through a charity which is designated by an official in an attempt to obtain business, it would run afoul of the rule. That would be a very rare circumstance in my opinion."
On Thursday at the conference, Chicago Comptroller Walter, Knorr said the MSRB's rule could hurt some "worthy causes," including a city program that gives summer jobs at banks and financial and law firms to students from public and private schools. Knorr said some and lawyers are interpreting the rule to preclude bond firm participation because the city runs the program.
Roberts encouraged market participants to call the MSRB with questions or to contact him directly. He also encouraged officials to submit comments about other SEC initiatives that have yet to be adopted.