The U.S. Securities and Exchange Commission said on Tuesday it wants to extend its regulatory reach into the $3.7 trillion municipal bond market, where states and cities that sell debt have largely escaped the kind of scrutiny faced by participants in other capital markets.
The SEC released a report that was two years in the making which focuses on improving issuer disclosures and on increasing investor protection.
But the SEC's proposed enhanced oversight of the market, which would involve enforcement of standards for financial statements and requirements for ongoing disclosure, may rile some issuers used to less-stringent procedures.
The SEC enforces rules for the market that are written by a self-regulatory organization made up of banks, issuers and advisers called the Municipal Securities Rulemaking Board.
Various laws have limited the SEC's ability to oversee states and local issuers, leading to a hodgepodge of accounting techniques and financial disclosures
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