Wall Street’s longstanding hold on the $4 trillion municipal-bond market faces a challenge from an onslaught of small, independent firms known as municipal advisers. The Securities and Exchange Commission is considering allowing these advisers to arrange private bond sales to skilled investors without the involvement of the large banks and midsize brokers that have for decades dominated the market for high-grade local government debt. ...
US broker-dealers have been alarmed by an SEC proposal to allow municipal advisers to arrange private bond sales without the involvement of a large bank or midsize broker. Figures showed 56% of muni debt deals produced $10m or less, according to data from the Municipal Securities Rulemaking Board. Also, they show that 75% of muni-bond issues feature participation from independent advisers, compared with 52% in 2004. Private placements total between $5bn and $20bn annually, a figure that is growing, said Refinitiv.