Heads of Public Finance Roundtable

June 22, 2017

Quarles & Brady LLP, Chicago, IL

Recap

EVENT RECAP: 
BDA Hosts Heads of Public Finance Roundtable
June 22nd - Chicago, IL

On Thursday, June 22nd, the BDA held its second Heads of Public Finance Roundtable in Chicago, Illinois. The roundtable was attended by over 20 representatives at BDA member firms, which provided a venue for information sharing and discussion on the most recent regulatory and market topics.

Discussion at the roundtable focused on the issues facing middle-market banks and dealers in public finance securities, including municipal advisor rule licensing (Series 50 exam), G-17 supervisory responsibilities, implementation of issue price regulations, compliance with due diligence obligations, and tax reform. You can view the roundtable agenda here and a full recap of the day follows.

Market and Regulatory Discussion Topics

MA Rule Licensing

  • Discussion of the separate roles of municipal advisors and underwriters
  • MA Rule licensing will be implemented in September
  • Discussion of what firms are doing to ensure continued compliance with the rule
  • What is the determining factor to register an MA and Series 50 pilot exam review

Post-MCDC Challenges of Disclosure and Due Diligence

  • Discussion of whether firms require disclosure counsel or underwriters counsel
  • Counsel should understand firm WSPs for firm reviews
  • Discussion of standard procedures for due diligence reporting
    • What firms use to guide the due diligence process
  • Discussion of municipal advisor rules
  • Discussion of SEC next steps post-MCDC

Issue Price Guidance

  • Recap and review of the newly implemented issue price rule
  • Challenges that issuers and underwriters have with the rule
  • Discussion of issues when involved in a syndicate or co-managed deal
  • Varying bond counsel expectations and requirements
  • Discussion of competitive sales/bids and guidance on 10 percent rule

Supervisory Responsibilities and Violations

  • MSRB G-17 compliance and review
  • Compliance discussion with MA exemptions
  • Discussion of documentation and closing procedures and automating the process
  • Discussion and feedback on pay-to-play and expense review best practices

Potential Market Implications with Tax Reform

  • Review of the administration's current plan and details for tax reform
  • Discussion on potential implications for the middle-market and challenges for municipal markets
  • Discussion on the vulnerability of the municipal tax-exemption in comprehensive tax reform
  • Discussion of political dynamics and outlook for tax reform in 2017/2018

Current Dynamics of Supply & Demand

  • Post-election analysis of market dynamics and review of the administrations agenda
  • Discussion of issuer confidence post-election
  • Discussion of state and bank implications in a rising rate environment

Additional Information:

  • Networking Dinner: After the roundtable, participants continued networking over beverages and dinner at Siena Tavern. Quarles & Brady also sponsored the dinner.
  • Upcoming Event: BDA will hold another Heads of Public Finance Roundtable at our National Fixed Income Conference in October 2017 (details here).