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New Delhi, Feb 14 () Markets regulator Sebi on Friday said it has constituted a committee which will suggest on policy matters pertaining to development of municipal debt securities and facilitate municipalities for issuance of such bonds. The regulator has constituted a municipal bonds development committee headed by its Executive Director Sujit Prasad and comprises representatives from municipal corporations, lawyers, professionals and market practitioners. The panel will advise Sebi on issues related to regulation and development of primary and secondary market of municipal debt securities, the Securities and Exchange Board of India (Sebi) said in a statement. It will suggest the regulator on matters required to be taken up for changes in legal framework to introduce simplification and transparency in systems and procedures in the primary and secondary market. Also, the panel would recommend on matters relating to regulation of intermediaries for ensuring investor protection in the primary and secondary market as well as on measures to facilitate issuers, municipalities, for issuance of municipal debt securities. In September, Sebi had relaxed norms for 'muni bonds' issuance to help smart cities as well as entities working in areas of city planning and urban development work, including municipalities, raise funds through debt securities. Nearly five years ago, the regulator had come out with the Issue and Listing of Debt Securities by Municipalities (ILDM) Regulations and since then seven municipalities have raised nearly Rs 1,400 crore by issuing their debt securities, which are commonly known as 'muni bonds'. SP ABMABM

Sebi constitutes municipal bonds development committee

<div class="image-container float_right" style="width:480px"><div class="image">REUTERS/Brendan McDermid<keyword id="443155" type="PERSON" weightage="60" keywordseo="Meredith-Whitney">Meredith Whitney</keyword>, managing director and senior financial institutions analyst for Oppenheimer and Co. Inc., speaks at the Reuters Finance Summit in New York, November 10, 2008. </div></div>Meredith Whitney is re-upping her call for a wave of municipal bankruptcies, in the wake of <keyword id="18876" type="COMPANY" weightage="60" keywordseo="Detroit">Detroit</keyword>'s Chapter 9 filing.
Flashback: in 2010, <a href="http://www.cbsnews.com/video/watch/?id=7166293n&amp;tag=contentBody;storyMediaBox">Whitney told 60 Minutes</a> that there could be between "50 to 100" cities defaulting on their debt, totaling "$100s of billions of dollars."
While there have <a href="http://www.governing.com/gov-data/municipal-cities-counties-bankruptcies-and-defaults.html">definitely been a few since then</a>, we never really reached that number. 
But today, in an op-ed for the FT, <a href="http://www.ft.com/intl/cms/s/2/59301a4a-d42c-11e2-a464-00144feab7de.html#axzz2ZtebffJ1">she doubles down</a>:
There are five more towns like Detroit in Michigan alone. There are many more municipalities across the country in similar positions.
Basically, the profligacy of past city administrations past has finally caught up:
...these days, things are very different in the world of municipal finance.
At the root of the problem is the incentive system that elected officials used to face. For decades, across the US, local leaders ran up tabs for future taxpayers; they promised pensions and other benefits for public employees that have strong legal protection. That has been a great source of patronage for elected officials: they can promise all sorts of future perks to loyal supporters (state and local workers) with very little accountability on the delivery of those promises.
Today, we are left with the legacies of this waste. The bill for promises past is now so large for some cities and towns that it is crowding out money for the most basic of services – in the case of Detroit, it could not even afford to run its traffic lights. Across many American cities, cuts to basic social services have already been so deep that they have made the communities unpleasant places.
She says officials are finally "siding with residents," but that this will come at the expense of pensions and bond holders.
"The aftershocks of the largest municipal bankruptcy in US history will be staggering," she says.
<a href="http://www.ft.com/intl/cms/s/0/34abcabc-f389-11e2-942f-00144feabdc0.html#axzz2ZtebffJ1">Click here to read the whole thing on FT.com »</a>

Meredith Whitney: 'Detroit Will Start A Wave of Municipal Bankruptcies'

<ul class="summary-list"><li><keyword id="6638444" type="UNKNOWN" weightage="60" keywordseo="municipal-bonds">Municipal bonds</keyword> are debt securities issued by local governments to fund public projects like schools, hospitals, or highways.</li><li>Investors buy municipal bonds because interest earned is exempt from federal income taxes, and in some cases, from state and local taxes.</li><li>Because they are tax-efficient investment, municipal bonds are best for taxable accounts as opposed to tax-advantaged retirement accounts.</li></ul>Imagine a relatively safe, long-term investment that generates income, allows you to save on taxes, and funds public projects crucial a community.That's essentially what happens when you invest in municipal bonds, which allow you to invest in the infrastructure of state and local communities while adding diversity and tax efficiency to your portfolio. Here's what you need to know about municipal bonds, from why they're popular among tax-smart investors to how they can benefit your portfolio. <h2>What are municipal bonds?</h2>A municipal bond, or "muni" for short, is a type of bond issued by a state or municipality to help fund necessary public works projects.Munis are popular with investors because of their tax advantages. Interest earned on municipal bonds is usually exempt from federal income tax. If you purchase a muni in the state you live, it could also be exempt from state and local taxes. Earning tax-free income is especially attractive to investors in higher tax brackets.Quick tip: Muni bonds exempt from federal, state, and local taxes are known as "triple tax-exempt."Investors also like the inherent safety of municipal bonds. In most cases, because you are investing in a bond used to help finance infrastructure backed by a local government, you can usually count on getting your principal back at maturity. <h2>How do municipal bonds work?</h2>At its most basic level, a bond is a loan made by an investor to a borrower. Whereas<a href="https://www.businessinsider.com/how-to-buy-treasury-bonds" target="_blank" rel="noopener"> treasury bonds</a> are issued by the US government and <a href="https://www.businessinsider.com/what-is-a-corporate-bond" target="_blank" rel="noopener">corporate bonds </a>are issued by companies, municipal bonds are issued by local and state governments.State and local governments issue municipal bonds to help pay for a wide range of projects including roads, schools and hospitals. Investors who purchase these bonds lend money to the municipality in return for regular interest payments (usually semiannual) for a set amount of time.Principal is repaid when the bond matures, or when the loan ends. Munis have a wide <a href="https://www.investor.gov/introduction-investing/investing-basics/investment-products/bonds-or-fixed-income-products-0" target="_blank" rel="noopener">maturity range of one to 30 years.</a><h3>Types of municipal bonds</h3>There are two types of municipal bonds, and they differ based on how they pay back investors: <ul><li>General obligation bonds: These bonds are secured with tax revenue and backed by the issuing municipality's taxing power. The population, demographics, economic diversity and budget outlook of the government issuing the bonds all play a role in the bonds' strength and creditworthiness. General obligation munis are often considered safe investments because, in most cases, the population is committed to the project and the municipality can use its power of taxation to repay the debt. </li><li>Revenue bonds: These bonds are repaid by revenue generated by the project. For instance, revenue raised from tolls from a highway project can be used to pay back bondholders. Or a new hospital may use cash from operations to pay interest and repay principal. Revenue bonds are thought to be riskier than general obligation bonds because of the limit on funds used to repay bondholders. Unlike general obligation bonds, revenue bonds cannot rely on taxes to pay back the bonds. </li></ul>It's important to pay special attention to the type of account you use to purchase these bonds. In a <a href="https://www.businessinsider.com/personal-finance/what-is-a-traditional-ira" target="_blank" rel="noopener">traditional IRA</a> or <a href="https://www.businessinsider.com/what-is-a-401k" target="_blank" rel="noopener">401(k) retirement account</a>, earnings already grow tax-free. Most investors find holding munis in taxable brokerage accounts help make the most of munis' tax-free status. In rare cases, municipal bond interest may not be exempt from federal taxes if they are used to fund an activity not qualified for tax-exempt status under IRS rules, like paying pension fund liability. It is usually obvious to you, your broker or your advisor when a muni is not exempt from federal taxes.Investors who buy and sell municipal bonds may be liable for capital gains tax on profits from those sales or for bonds purchased at a discount price. In addition, if you are subject to the alternative minimum tax, you may be required to pay some taxes on municipal bond interest.<h2>Are municipal bonds safe investments?</h2>Municipal bonds are considered relatively safe investments because they have lower default rates and higher credit ratings than corporate bonds. Plus, many munis are backed by insurance that guarantees payment in the event of a default.That's not to say munis are immune from default. For example, during the Puerto Rican debt crisis and the Detroit city bankruptcy, there were several muni bonds that could no longer make payments. If municipal bonds pique your interest, it's important to understand credit ratings. There are three major credit ratings agencies - Standard &amp; Poor's (S&amp;P), Moody's and Fitch - all of which rate the issuers of municipal bonds based on their ability to meet their financial obligations. This makes it easier for investors to evaluate risk. Quick tip: To research muni bonds in your area, visit the <a href="https://emma.msrb.org/Home" target="_blank" rel="noopener">Electronic Municipal Market Access (EMMA) website</a>, where you can find key information like bond type, yield, maturity, credit quality, and risk factors. Although many munis receive the highest ratings from the agencies, such as AA+ or Aa1, it's important to remember that ratings can be downgraded during the life of the bond if a municipality's financial situation changes. Like all bonds, munis also carry interest rate risk. When interest rates fall, prices for existing bonds paying higher rates will rise. In turn, when interest rates rise, prices on existing bonds paying lower rates will decline. If you hold muni bonds to maturity, price risk is not a factor. You only experience the ups and downs if you are buying and selling muni bonds.<h2>How much will I earn from municipal bonds? </h2>In return for safety and the tax advantages, investment-grade municipal bonds often yield less than their taxable counterparts, such as corporate and government-issued bonds.High-yield munis, or munis that come from less-creditworthy issuers, can have significantly higher yields than investment-grade munis ,but they come with more investment risk. Investors in high-tax brackets may find that the tax advantages of investing munis help bridge the gap between muni and taxable bond rates.Quick tip: The tax-equivalent yield (TEY) helps investors compare taxable bonds to tax-free muni bonds. To calculate the TEY, take the tax-free municipal bond yield divided by [1-marginal tax rate]. For example, if you're in the 35% tax bracket and looking to buy a tax-free muni bond yielding 4%, the TEY is 4 divided by [1-0.35], which is equal to 6.15%. A taxable bond yielding 6.15% would be the equivalent of the yield of this muni bond.<h2>How to buy municipal bonds</h2>In most cases, you buy and sell municipal bonds through a <a href="https://www.businessinsider.com/personal-finance/best-online-brokerage" target="_blank" rel="noopener">broker</a>. There are three main ways you can invest in munis:<ul><li>Individual bonds bought through a broker require you to do your own research and decide whether to buy new issues or bonds sold through the secondary market, where you can buy munis already issued to other investors. You'll also need to investigate credit risk carefully, since your own portfolio of muni bonds will likely not be as diversified as a mutual fund or ETF.</li><li>Municipal bond mutual funds invest in a wide-range of muni bonds, offering investors the diversity they can't get on their own, while still providing the federal tax advantages on income and in some cases some limited state and local tax breaks. If the upside is instant diversification and professional management, the downside is recurring management fees. You'll also be subject to capital gains tax when you sell your shares.</li><li>Mutual bond ETFs are a good way to invest in a diverse array of municipal bonds. Like mutual funds, income is exempt from federal taxes and some interest earned may also be tax exempt at the state and local level, depending on where you live. ETFs trade like stocks on the market with prices fluctuating throughout the day, so you may experience more volatility with an ETF than a mutual fund. Like mutual funds, you'll be subject to capital gains tax when you sell your shares.</li></ul>Whatever investment you choose, be sure to pay attention to the account you are using to purchase muni bonds. You likely don't want them as part of your tax-deferred retirement accounts such as traditional IRAs or 401(k)s where you won't get the full force of the tax exemptions. Better to put them in a taxable brokerage account. <h2>The financial takeaway</h2>Municipal bonds can offer a relatively safe, tax-advantaged way to diversify your fixed-income portfolio. While yields may not be as high as taxable bonds, the tax exemptions on interest earned can help even the playing field. Investors in high-tax brackets looking to diversify their taxable investment accounts may be best suited to municipal bond investing.<a data-type="5fb6cfaa0210777d8c6d3139">A zero-coupon bond is a discounted investment that can help you save for a specific future goal</a><a data-type="5f8df19abe509c38e610952b">Bonds vs. CDs: The key differences and how to decide which income-producing option is better for you</a><a data-type="5f9b41ee51467239b420b67c">A corporate bond provides companies with cash and investors with income - here's how to evaluate the risks and rewards</a><a data-type="5f74bdeb851d5a30e02f40df">What are junk bonds? A risky yet high-yield investment that can bring rewards if you're willing to take the chance</a>

What is a municipal bond? How to earn tax-free income by investing in projects that impact your community

New Delhi, Feb 18 () As many as 13 members, including representatives of the Union housing and urban affairs ministry and a municipal corporation, will be part of Sebi's committee on 'muni bonds' to suggest the markets regulator on policy matters pertaining to development of such debt securities. The regulator, on Friday, said it constituted a municipal bonds development committee headed by its Executive Director Sujit Prasad. The panel will suggest Sebi on policy matters pertaining to the development of municipal debt securities and facilitate municipalities for issuance of such bonds. The committee comprises representatives from Sebi, municipal corporations, lawyers, professionals and market practitioners. D Thara, joint secretary at the Ministry of Housing and Urban Affairs; Shekhar Gaikwad, municipal commissioner of Pune Municipal Corporation; and G Mathi Vathanan prinicipal secretary at housing and urban development department in the Odisha government will be part of the committee. Other members of the panel include NSE Chief Business Officer Ravi Varanasi, SBI Capital Markets Head (Capital Markets) Rakesh Joshi, Crisil Ratings President Gurpreet Chhatwal and BSE Chief Trading Operations and Listing Cell Girish Joshi. The committee has been tasked to suggest the regulator on matters required to be taken up for changes in legal framework to introduce simplification and transparency in systems and procedures in the primary and secondary market. Also, the panel would recommend on matters related to regulation of intermediaries for ensuring investor protection in the primary and secondary markets as well as on measures to facilitate issuers, municipalities, for issuance of municipal debt securities. In September, Sebi had relaxed norms for the 'muni bonds' issuance to help smart cities as well as entities working in areas of city planning and urban development work, including municipalities, raise funds through debt securities. Nearly five years ago, the regulator had come out with the Issue and Listing of Debt Securities by Municipalities Regulations and since then, seven municipalities have raised nearly Rs 1,400 crore by issuing their debt securities, which are commonly known as 'muni bonds'. SP HRS

Representative of municipal corp part of Sebi's muni bonds development panel

New Delhi, May 13 () Mobile and internet players on Wednesday suggested that red zones should be limited to ward level in municipal areas and economic activities in other parts of the district should be allowed in the next phase of lockdown. The Internet and Mobile Association of India suggested that free movement of goods and services should be allowed in and between all wards in municipality areas which are not marked as red. "Developing upon the speech by the Honourable Prime Minister yesterday that the new version of lockdown would be different from the previous ones, IAMAI has suggested that the demarcation under lockdown 4.0 should be based on wards in municipal areas and not whole districts," IAMAI said in a statement. Prime Minister Narendra Modi on Tuesday said that lockdown beyond May 17 will have different rules and details will be shared before May 18. IAMAI said that the bulwark of containment is being enforced by the states and local authorities like municipality, who are better equipped to operate at ward levels given their administrative mechanisms are designed at those levels. "Restrictions at district level are too broad a canvas that severely hinders economic revival as well," the industry body said. At present, a large number of districts are in red and orange zones. Government has restricted movement of goods and services in the red zone to contain the spread of coronavirus. PRS MRMR

Limit red zones under lockdown to wards in municipal areas: IAMAI

<ul class="summary-list"><li>Kyle Markland was hired to run NYC's <keyword id="13358710" type="UNKNOWN" weightage="60" keywordseo="municipal-credit-union" source="Orion">Municipal Credit Union</keyword> after the last CEO looted the company.</li><li>In his tenure, assets grew by 38% and the union was released from conservatorship 42 months early.</li></ul>This as-told-to essay is based on a conversation with Kyle Markland, who in Nov. 2020 was hired to replace former CEO Kam Wong, now serving 5 1/2 years prison for embezzling $9.9 million from the Municipal Credit Union of <keyword id="11921345" type="UNKNOWN" weightage="60" keywordseo="new-york-city" source="Orion">New York City</keyword>. Last month, <keyword id="11899346" type="UNKNOWN" weightage="60" keywordseo="mcu" source="Orion">MCU</keyword> announced it was released from court-ordered conservatorship 42 months ahead of schedule.I was the chief operating officer at Bethpage Credit Union on Long Island when a recruiter called me out of the blue, in August or September of 2020, about leading MCU, one of the largest municipal credit unions in the country.I was aware of what had happened at MCU beforehand. It was really hard not to be, in this business. The former CEO had embezzled almost $10 million and spent it on travel and cars and lottery tickets.I just thought it was really unfortunate for the members of MCU, that the union had been placed under conservatorship and was being run by the federal National Credit Union Administration since May of 2019.I actually wasn't interested in the position at first. I had a really good job at Bethpage. But the more I dug into learning about the organization, and its 600,000 members, and the market and the potential of the organization, I thought this was something where everything I had learned through my entire career had led me to be part of the team that would turn around this organization. Not very often do you get the opportunity to say that you were part of the team that took the largest conserved credit union in the country's history and returned it to its rightful owners. And those owners are our members, who are the city's police officers and sanitation workers and the city hospital system workers — the <keyword id="13358711" type="UNKNOWN" weightage="60" keywordseo="municipal-employees" source="Orion">municipal employees</keyword> of New York City.Once I had decided I wanted the position, I was all in on it. I was not going to give a second thought to it. I just knew that success was the only option for us. <h2>We had to pull out of a $10 million hole — and pull through a pandemic</h2>There was a lot of belt tightening at first. We had to close down physical branch offices in seven underperforming locations, as a cost-cutting measure. We had to do it. We had to cut as many costs as we could.Other services were cut — some of it was that because of the pandemic, too. We weren't as available as we wanted to be for the members, for their borrowing needs, until we got back on our feet.We had to pull out of a $10 million hole — and pull through a pandemic. As far as advice goes, I think the real thing is to create that north star vision that you want for the organization. For us finding that vision was easy — everything was about the members and making it better for the members and returning the union to the members. <div type="image" title="New York City's Municipal Credit Union" height="3332" width="4443" msid="90144310" hostid="261"></div>I'd say just have a clear vision of what you want to do and prioritize everything you're doing to get to that point. There were a lot of long hours. The team here — the MCU staff is 500 people — they were absolutely fantastic. We worked together shoring up the financial situation. Admittedly the morale was pretty low when I started. We're still rebuilding the vibrant culture we used to have. There was the conservatorship, there was the pandemic. We didn't have really at our disposal the kind of training programs, bonuses and reward programs that we wanted. But we have a number of employees who were here pre-conservatorship, and I have a special place in my heart for them because they weathered the storm and were part of the solution for coming out of conservatorship. They believed in the organization and what we stood for, and they believed in me. I can't tell you how much I appreciate their efforts.<h2>We came out of conservatorship 42 months ahead of schedule</h2>I have been here 16 months, 17 months or so now. Clearly getting out of our conservatorship is our proudest accomplishment. We're starting to see a lot more engagement from our employees and from our members. Now we're not looking down and in at the organization; we're able to look up and out at our members, and look at our future and their future as a financial cooperative.We are owned by our members. Our members each own a share of the credit union — one member, one vote, and if you've got $5 or $5,000 with us you still have one vote. We offer the city's workers savings accounts, retirement accounts, all types of loans. The new police academy graduates are offered MCU loans to help them buy their uniforms and weaponry, as just one example.The conservatorship ended Feb. 23. We came out of conservatorship 42 months ahead of schedule. A lot of financial institutions, when they get into trouble, they don't grow, they shrink. The National Credit Union Administration says there were 31 conservatorships between 2012 and 2020, and out of those, 19 wound up closing and 10 merged. So it's far more common to see credit unions close or merge than successfully emerge like MCU, especially not 42 months ahead of schedule.<h2>Build a strong team ... and let them do their job.</h2>We were able to grow members, and we grew assets. The members' deposits with us grew 38 percent in those 33 months of conservatorship, to where it's now at more than $4.2 billion. This is something our members can look at their statements and see. I think the biggest advice I have from this is to build a strong team around you, and work with that team to accomplish the seemingly impossible.A lot of it is build your team, get the employees you need, keep everybody focused and let them do their job. Surround yourself with super-strong talent and then empower them to do their job.Then get out of their way, and just support them.

I took over NYC's Municipal Credit Union after the last CEO embezzled $10 million; here's how we came back from the brink

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">REUTERS/Ralph Orlowski Mario Draghi.</div></div></div>The European Central Bank is reportedly thinking about buying municipal debt as part of its massive quantitative easing plan. According to a <a href="http://uk.reuters.com/article/2015/11/11/uk-ecb-policy-qe-exclusive-idUKKCN0T01WO20151111">report from Reuters</a>, the ECB is thinking about buying debt from municipalities and regions in the eurozone, expanding the scope of its asset purchase program beyond sovereign debt. Following this report, the euro was little changed, trading near $1.074 to the dollar. Last month, ECB president Mario Draghi <a href="http://www.businessinsider.com/european-central-bank-decisions-and-press-conference-october-2015-10">hinted</a> that more QE was coming from the ECB, which is currently buying €60 billion worth of assets each month until at least next September. Following Draghi's hints, Peter Praet, the ECB's chief economist, <a href="http://www.businessinsider.com/ecb-chief-economist-peter-praet-interview-on-qe-2015-10">said</a> that there were "no taboos" in terms of what the bank could and could not consider buying as part of its program. With this report, it seems that buying debt from smaller entities like cities and regions is now part of the ECB's discussion. This additional expansion from the ECB into buying municipal-level debt wouldn't be likely until March, according to Reuters. And as <a href="http://uk.reuters.com/article/2015/11/11/uk-ecb-policy-qe-exclusive-idUKKCN0T01WO20151111">Reuters notes</a>, the big winner could be Germany:A second person confirmed that buying municipal or regional bonds already being traded was one of the options being studied, also a testimony to the fact that the ECB's alternatives are limited.[...]Any move to buy municipal debt would particularly benefit the German regions that have sold hundreds of billions of euros of bonds and dominate the market, making it even cheaper for them to borrow.But it could also help rejuvenate slack markets such as Italy or Spain although regional borrowings count in calculating a country's overall debt pile and their size is therefore also kept in check.Time and again, Business Insider's Mike Bird has characterized the ECB's foreshadowing of additional asset purchases as the bank and its officials "<a href="http://www.businessinsider.com/ecb-chief-economist-peter-praet-interview-on-qe-2015-10">loading the QE bazooka</a>."And so here we are. <a href="http://uk.reuters.com/article/2015/11/11/uk-ecb-policy-qe-exclusive-idUKKCN0T01WO20151111">Read the full report here » </a> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/october-jobs-report-rate-hike-employment-unemployment-fed-2015-11">The killer jobs report could mean a rate hike in December </a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="NpZTZveDr5kj9fJjDyZxGtBo86FNesmZ" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

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Sebi constitutes municipal bonds development committee

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What is a municipal bond? How to earn tax-free income by investing in projects that impact your community

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Representative of municipal corp part of Sebi's muni bonds development panel

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Limit red zones under lockdown to wards in municipal areas: IAMAI

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I took over NYC's Municipal Credit Union after the last CEO embezzled $10 million; here's how we came back from the brink

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The ECB is reportedly thinking about buying municipal bonds as part of its massive QE plan

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