The Securities and Exchange Commission’s chief of the Office of Municipal Securities, Dave Sanchez, advised issuers and municipal professionals to remain vigilant in various areas that regulators are monitoring. These areas include late audits, questionable conduit deals, and unregistered advisors in the public-private partnership sector.
Sanchez emphasized the importance of self-discipline to prevent outside forces from imposing discipline. He highlighted the SEC’s focus on sectors with high default rates, such as joint power authorities and charter schools. In particular, he mentioned the increasing number of defaults in charter schools and urged gatekeepers to keep a closer eye on potential issues.
Sanchez also addressed the decade-old unregistered municipal advisor rule, emphasizing the SEC’s continued scrutiny of the issue. He highlighted concerns in public-private partnerships, where advisors are responsible for compliance, but violations ultimately impact the issuer.
On the topic of climate disclosure, Sanchez pointed out discrepancies in disclosure practices among issuers in the same area. He attributed these differences to the muni professionals working with the issuer and emphasized the importance of providing comprehensive disclosure.
Sanchez warned that climate disclosure and the timeliness of financial reports are areas that regulators closely monitor. He noted that delays in submitting audited financials to the Municipal Securities Rulemaking Board have been on the rise, signaling a need for increased regulatory attention in the market.