Seeks SEC Ruling, State Treasurers' Input on Proposed Exchange for Municipal Bonds

Mar 23, 2011, 11:00 ET from

SAN FRANCISCO, March 23, 2011 /PRNewswire/ -- Kevin Olson, well-known public finance watchdog, investor advocate and founder of, is calling for fundamental reform of the muni markets through the creation of a muni market exchange.

In an e-mail to the Securities and Exchange Commission (SEC) and the National Association of State Treasurers (NAST), Olson asked SEC Commissioner Elisse Walter if muni issuers, such as states, can list on an exchange or exchange platform – "similar to how corporations list their stock" – following initial issuance of bonds.  Olson also asked that state treasurers help in securing fair and reasonable muni markets by involving themselves in the development of a formal exchange.  Walter has replied and the question is now being considered by relevant SEC staff.  NAST is also considering the idea, and is consulting its members.

"Allowing municipalities to list bonds after 'new issue' and/or requiring all secondary bid-side activity to take place on an exchange would revolutionize the muni markets," Olson said.  "It is an important first step to bring about much needed reform. could be that centralized muni market exchange if state treasurers step up."  If there is no interest, will continue to operate as an exchange platform, Olson added.

According to Olson, the creation of a formal exchange would open up the muni markets, allowing buyers and sellers to get the best prices.  Wall Street brokerages want the current system of "captive" market situations where they control the bidding, the spreads and the profit.

"No one has worked muni trade data or studied it harder than I have.  I do not believe that oversight, regulatory, rulemaking or enforcement entities have really looked at the trade data, because they do not seem to recognize just how bad the muni markets really are," Olson said.  "Transparency is not enough – greater transparency only shows that things are even worse than they appear.  What we need is structural reform.  What we need is a muni market exchange." 

In addition to, Olson also operates, a Web site devoted to improving public finance and helping muni investors.  Contact Olson at or