Issuers, underwriters and advisors in the municipal bond marketplace are facing unprecedented challenges from federal regulators in connection with both the issuance of bonds and ongoing post-issuance compliance. These challenges include the SEC’s MCDC Initiative, ongoing IRS audits and other enforcement efforts, and upcoming SEC municipal advisor examinations. This advisory series aims to clarify these initiatives as they evolve and help participants in this marketplace chart a clear path to compliance and, when necessary, defense of their activities.

With the underwriter self-reporting phase of the Securities and Exchange Commission's (SEC's) Municipalities Continuing Disclosure Cooperation Initiative (MCDC Initiative) completed, now is an appropriate time for municipal securities issuers and underwriters to evaluate their next steps under the MCDC Initiative. The initiative, which was designed to encourage self-reporting of deficient issuer disclosures concerning historical compliance with continuing disclosure obligations, has been touted as a success by the SEC enforcement division. Indeed, a large number of underwriters have elected to participate in the initiative, with many of them reporting a significant number of potentially inaccurate official statement disclosures.