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. The proposal, which is being considered for final approval on Wednesday, would let brokers sell bonds directly with no middleman and at lower prices than they can get from banks. 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.
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.