SEC Chairman: Issuer protection is taxpayer protection

Securities and Exchange Commission Chairman Paul Atkins on Wednesday said "a unique dimension of regulation" in the municipal securities space is issuer protection, "which is, in essence, taxpayer protection."

Atkins delivered his remarks on the first day of a two-day compliance outreach program for municipal advisors and municipal securities dealers, a virtual event hosted jointly by the SEC, the Municipal Securities Rulemaking Board and the Financial Industry Regulatory Authority.

"Everyday taxpayers and ratepayers ultimately bear the cost of market inefficiencies and unnecessary expensive borrowing by state and local governments," Atkins said in his opening remarks. "At the same time, regulators like the SEC, FINRA and the MSRB must strive to maintain investor and municipal issuer protection without imposing excessive compliance burdens."

The compliance outreach program was designed "as a two-way dialogue between regulators and regulated entities to proceed in a manner that maintains robust and efficient markets, protects municipal entities and investors, and facilitates capital formation," the SEC chairman said.

"I'm especially interested in the discussions regarding compliance concerns and hope to hear your perspectives on where those challenges are most acute," Atkins said.

While conferences such as the compliance outreach program and the formal rule comment process offer the commission the opportunity to engage with the public and gain insights, the SEC welcomes "ongoing dialogue with the market participants as you confront new structures, consider new technologies and explore new ways of conducting business," he said.

"Compliance should never feel like a game of gotcha," the SEC chairman said. "Instead, we invite you to make full use of our guidance and resources, including the agency's Office of Municipal Securities, which exists to support you."

Atkins, who earlier in his remarks said "the municipal securities market occupies a distinctive place in both our financial system and civic life," concluded his comments "by affirming how deeply" work done by municipal advisors and municipal dealers matters.

"It matters to communities seeking to finance essential projects, it matters to investors seeking to steward their savings wisely and it matters to all of us who believe in the promise of this instrument for injecting private capital into public infrastructure," the SEC chairman said.

Atkins' comments were followed by remarks from FINRA President and CEO Robert Cook.

"As Chairman Atkins just noted, the municipal securities market occupies a distinctive place in our financial system, connecting investors' capital to the schools, hospitals and infrastructure that serve our communities," Cook said.

Programs like the joint compliance outreach program "represent exactly the kind of dialogue between regulators and market professionals that Chairman Atkins just called for, creating opportunities to work together to make our market stronger and more resilient," the FINRA CEO said.

"At FINRA, we believe that we can all learn from this type of dialogue," Cook said. "What we at FINRA hear from these conversations enhances our examination, oversight and rulemaking programs, and we hope that sharing with you what we are seeing in our regulatory programs will enable you to better target your limited compliance resources more effectively."