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Abstract: 

In commemorating the 40th Anniversary of the creation of the Municipal Securities Rulemaking Board, I moderated a session at the October 2015 annual conference of the Association for Budgeting and Financial Management, the premier setting since 1979 for research on municipal securities. The MSRB has enjoyed a very productive history regulating the municipal securities industry under just three executive directors, with the two longest serving leaders gracing our anniversary session. Christopher “Kit” Taylor, director from 1978 to 2007, and Lynnette Kelly, director since 2007, were joined on the panel by long-standing market observer participant Robert Doty, and by Rick Fleming, the first investor advocate at the Securities and Exchange Commission. The panel traced key aspects of the municipal market before the MSRB was created and the evolution of the MSRB regulatory regime as this capital market matured and innovated. Another highlight of the MSRB’s history is its emergence as a technology-oriented organization that serves as the hub of primary and secondary market transparency. Investor Advocate Rick Fleming punctuated the discussion with a reminder that protecting retail investors was at the core of the legislative rationale for the MSRB and that protection remains central moving forward. Personally, it was a pleasure to serve as a public member of the MSRB board of directors from 2012 to 2015 and to do my part in advancing a fair and efficient municipal market, which is critical for state and local financing. Public pension funding continues to trouble governments and their employees, as well as taxpayers and investors. Finance professor Earl D. Benson and accounting professor Barry R. Marks use government-wide financial statement data to examine the effect of the level of pension funding in Texas cities on municipal insurance premiums and debt ratings. They find empirical differences in the importance of pension funding for insurance premiums compared to the credit rating. As governments face constraints on funding necessary infrastructure improvements, public officials often look at public-private partnerships (P3s) as a possible option. Tax attorney Vicky Tsilas and tax economist Edith Brashares examine highway financing and the opportunities and pitfalls in P3 structures using tax-exempt securities. They note the tax implications of the current rules governing contractual arrangements between users as owners of capital projects and for-profit contract/service providers.

Keywords: Municipal Securities Rulemaking Board, municipal market regulation, investor protection, Dodd-Frank Act, Securities and Exchange Commission, municipal pension funding, underfunded municipal pension obligations, bond insurance premiums, bond ratings,

Affiliations:  1: Georgia State University.