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Article
Publication date: 3 June 2014

David Bannard and Reed Groethe

To explain the new Municipal Advisor Rule that will take effect on July 1, 2014, which regulates persons and firms that provide advice to municipal issuers and obligated…

Abstract

Purpose

To explain the new Municipal Advisor Rule that will take effect on July 1, 2014, which regulates persons and firms that provide advice to municipal issuers and obligated parties regarding municipal financial products or the issuance of municipal securities or that engage in certain solicitation of municipalities or obligors on behalf of third parties.

Design/methodology/approach

Explains who is treated as a Municipal Advisor, the standards applicable to Municipal Advisors, how the Rule may affect municipal securities issuers and obligated persons (collectively referred to as “Borrowers”) as well as other market participants, describes the exceptions and exemption s to the requirements of the Rule, and concludes with suggestions as to how Borrowers and other market participants may promote the flow of information.

Findings

The Rule will carry out a requirement of the Dodd-Frank Act, which provides that any party that provides advice to a Borrower regarding municipal financial products or the issuance of municipal securities must register with the SEC and the MSRB as a Municipal Advisor, unless such party qualifies for an exception or exemption under the Rule. Practical Implications: The Rule will change how information flows in the municipal securities market. Some consequences of the Rule may disadvantage Borrowers and other market participants. The Rule may restrict the flow of information provided to Borrowers by participants in the municipal securities marketplace that are not Municipal Advisors.

Originality/value

Practical guidance from experienced financial services lawyers.

Details

Journal of Investment Compliance, vol. 15 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

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Article
Publication date: 2 May 2017

Ernesto Lanza

To describe the status of municipal advisor rulemaking by the US Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB), and regulatory…

Abstract

Purpose

To describe the status of municipal advisor rulemaking by the US Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB), and regulatory compliance approaches, under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

Design/methodology/approach

Examines the posture of the SEC, MSRB and Financial Industry Regulatory Authority (FINRA) upon completion of the MSRB’s core regulatory framework for municipal advisors. Explores threshold issues in determining municipal advisor status, approaches for preparing for and responding to initial regulatory compliance examinations by the SEC and FINRA, and key considerations in reviewing municipal advisor policies, procedures and business practices in light of the evolving regulatory and marketplace landscape.

Findings

SEC and FINRA compliance examiner feedback points to the expectation that municipal advisor policies, procedures, processes and records must be fully consistent with the firm’s business activities and must address each material aspect of all applicable MSRB and SEC rules, as well as the fiduciary duty of municipal advisors to their municipal entity clients under the Securities Exchange Act of 1934.

Originality/value

Practical guidance from experienced securities and public finance attorney that provides a consolidated outline of key municipal advisor regulatory compliance obligations under the Dodd-Frank Act.

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Article
Publication date: 4 July 2016

Stephen Wink, Anna Rienhardt, Brett M. Ackerman and Sean Miller

To analyze the Municipal Securities Rulemaking Board’s new rule outlining the standards of conduct and fiduciary duties applicable to municipal advisors.

Abstract

Purpose

To analyze the Municipal Securities Rulemaking Board’s new rule outlining the standards of conduct and fiduciary duties applicable to municipal advisors.

Design/methodology/approach

This article contains a summary of new MSRB Rule G-42 and identifies key areas where the final version of MSRB Rule G-42 differs from the initial proposal.

Findings

New MSRB Rule G-42 represents another significant milestone in the MSRB’s development of a comprehensive regulatory framework for municipal advisors mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act and imposes significant requirements on municipal advisors.

Originality/value

Practical guidance from experienced securities and financial services lawyers.

Details

Journal of Investment Compliance, vol. 17 no. 2
Type: Research Article
ISSN: 1528-5812

Keywords

Content available
Article
Publication date: 16 August 2021

Mattias Haraldsson

The aim of this paper is to explore whether and how external, political, financial and governance factors influence capital expenditure deviations in the Swedish municipal

Abstract

Purpose

The aim of this paper is to explore whether and how external, political, financial and governance factors influence capital expenditure deviations in the Swedish municipal water and sewerage sector and to capture the consequences of municipal organisational fragmentation.

Design/methodology/approach

Panel data analysis of 238 municipalities and 1,190 observations of capital expenditure deviations over five years (2013–2017).

Findings

Apart from a low overall on average execution rate of 69%, the Swedish municipal water and sewerage sector seems generally sensitive to external stakeholder pressure for budget compliance, but not to the political power situation. Further, political signalling incentives generally do not influence capital expenditure deviations in the contexts of municipal corporations and cooperations, which supports the idea that these governance forms insulate the organisation from general stakeholder pressure and political control.

Practical implications

The practical implication is that large and constant capital expenditure deviations call for change in regulation and governance of the municipal sector. However, in countries such as Sweden, where externalising services to municipal corporations and cooperations is significant, this discussion needs to address the consolidated level of the municipality. Otherwise, a large share of the investment budget will be unscrutinised. More closely related to the Swedish water and sewerage sector, the risks associated with a constantly low execution rate should be analysed and addressed.

Originality/value

First, this paper contributes to the knowledge of aggregated capital expenditure deviations in general and specifically within the municipal water and sewerage sector. Second, analysing the municipal governance landscape adds further insights and suggestions on why budget performance varies. The results especially highlight that the governance forms of corporations and cooperations change the relation to political signalling incentives.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1096-3367

Keywords

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Article
Publication date: 25 August 2021

Yulianti Abbas and Craig L. Johnson

This paper analyzes the impact of increased federal regulatory enforcement from the SEC's Municipalities Continuing Disclosure Cooperation (MCDC) initiative on municipal

Abstract

Purpose

This paper analyzes the impact of increased federal regulatory enforcement from the SEC's Municipalities Continuing Disclosure Cooperation (MCDC) initiative on municipal debt issuers continuing disclosure practices.

Design/methodology/approach

We analyze the changes in continuing disclosure practices by estimating a series of difference-in-differences regressions based on variables representing issuers' changes in regulatory risk after the MCDC. The continuing disclosure data are hand-collected for 827 cities over a seven-year period.

Findings

The empirical findings indicate that increased regulatory enforcement has a significant impact on continuing disclosure compliance. We find increased enforcement has no impact on issuers that already have a higher probability of being monitored by federal regulators. We also find that an increase in continuing disclosure compliance does not automatically increase continuing disclosure timeliness.

Practical implications

The MCDC lacks monetary penalties for noncompliant bond issuers and no direct regulatory consequences exist for untimely disclosure. Our findings suggest that regulatory enforcement should be followed by adequate sanctions to emphasize the credibility of the enforcement threat and the SEC should consider requiring bond issuers to commit to the timely disclosure of significant information in offering documents.

Originality/value

This paper extends prior studies by analyzing regulatory risk in the market, and the ability of regulation to reduce disclosure compliance deficiencies in the municipal market. By focusing on the MCDC, this study is able to disentangle the impact of regulatory enforcement from the changes in accounting regulation.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1096-3367

Keywords

Content available
Article
Publication date: 22 June 2021

Joshua Maine, Emilia Florin Samuelsson and Timur Uman

Drawing on paradox theory, this study explores how ambidextrous sustainability relates to organisational performance in hybrid organisations represented by Swedish…

Abstract

Purpose

Drawing on paradox theory, this study explores how ambidextrous sustainability relates to organisational performance in hybrid organisations represented by Swedish municipal housing corporations, and how this relationship is contingent on the organisational structure of these organisations.

Design/methodology/approach

The study relies on the data collected from Swedish municipal housing corporations. These data sources consist of a survey sent to the management team members in Swedish municipal housing corporations, financial and non-financial archival data on these corporations, interviews with the management team and board members, and observations of meetings involving the management team and board of directors at a Swedish municipal housing corporation. Quantitative data of the study were analysed using descriptive statistics, correlation analysis and linear multiple regression analysis. Qualitative data were analysed employing deductive thematic analysis and were used to illustrate and discuss the results of the quantitative analysis.

Findings

The quantitative findings show that ambidextrous sustainability, i.e. the alignment between an explorative orientation and an exploitative orientation towards sustainability, has a weakly positive relationship with financial performance and a positive relationship with social performance in hybrid organisations represented by Swedish municipal housing corporations. The study further shows that a high level of the structural element “connectedness” weakened the relationship between the ambidextrous sustainability and financial performance of the organisation in the study. In contrast, a lower level of connectedness reinforced and strengthened this relationship. Our qualitative material illustrates how the quantitative findings could be explained by the interaction between the board of directors and the management team of these hybrid organisations.

Originality/value

The study shows how ambidextrous sustainability, employed for conceptualisation of the sustainability strategy in hybrid organisations, represented by Swedish municipal housing corporations, can impact on facets of performance (i.e. financial, social and environmental) differently. The study further highlights the importance of organisational structures in these relationships in a hybrid context.

Details

Accounting, Auditing & Accountability Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 2 March 2021

Åge Johnsen

This paper analyses the deregulation of the municipal audit market in Norway, in particular how organization of the service affected audit costs.

Abstract

Purpose

This paper analyses the deregulation of the municipal audit market in Norway, in particular how organization of the service affected audit costs.

Design/methodology/approach

The paper uses multiple regression analysis of administrative as well as survey data of organizational structure and audit costs from 312 municipalities in Norway in 2012.

Findings

The introduction of contracting out in the municipal audit market in Norway in 2004 contributed to a reduction in audit fees eight years after the deregulation, compared to the situation four years before the deregulation. The type of audit, mixing inter-municipal co-operation and contracting private auditors, was related to lower costs.

Research limitations/implications

The data does not include audit quality and are restricted to one country.

Practical implications

The municipalities that combined inter-municipal co-operation and contracting a private auditor achieved the lowest costs. Hence, neither pure in-house production (“make”) nor outsourcing (“buy”) but mixing several governance forms (hybrid organization) was related to low costs.

Social implications

Contracting out is a core element of new public management (NPM) but has often been a contested tool in public policy. This paper provides empirical evidence on the effects of a reform of a professional service, which is relevant for many services in the public sector.

Originality/value

This paper contributes by filling some of the gaps in the public sector accounting and public management reform literature by studying the organization and costs of the municipal audit, specifically by including transaction costs, addressing plural governance forms in addition to pure in-house production, inter-organizational co-operation and market contracting and by studying long-term effects.

Details

International Journal of Public Sector Management, vol. 34 no. 4
Type: Research Article
ISSN: 0951-3558

Keywords

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Article
Publication date: 6 May 2020

Darko B. Vukovic, Moinak Maiti, Dmitry Kochetkov and Alexander Bystryakov

This paper study regional attractiveness through passive portfolio investment based on duration, immunization and convexity (in case of higher interest rate volatility) of…

Abstract

Purpose

This paper study regional attractiveness through passive portfolio investment based on duration, immunization and convexity (in case of higher interest rate volatility) of municipal bonds by using data from Standard and Poor’s. The massive variety of financial incentives to promote regional investment attractiveness is dependent on governmental strategy. Municipal bonds are the one of the most efficient ways of direct investments in the region, however, it is still a question of a good balance between a certain rate of return and an adequate risk. The purpose of this paper is to analyze the investment opportunities in municipal revenue bonds.

Design/methodology/approach

This study developed a model of investing using municipal bonds with the case of their immunization and analyze attractiveness of such investment. The theoretical model assumes a situation where the local government finances its capital projects through municipal revenue bonds. Such situations influence strongly on regional or local competitiveness provided by local government policy.

Findings

An analysis of the municipal bond market indicates that both municipal general and revenue bonds had stable and good level of yields to maturity in the past ten years. Their standard deviations were very low and in the past two years almost approached the level of standard deviations of treasury bonds. With the duration of 4–6 years on 5-year investment in municipal revenue bonds and their immunization, it is possible to provide good returns for investor.

Research limitations/implications

The limitation of this study concerns theoretical situation where local government will use non-market-based policy to reduce the interest rates and that will influence on rise of municipal bond liquidity premium (price distortion). This situation will make municipality bonds less attractive for investing, especially because of lower liquidity on secondary market. Also, this model is applicable in regions that have developed financial markets.

Practical implications

This research suggests governments a sustainable framework to use municipal bonds as a strategy for capital targeting in regions.

Social implications

This research is related to professional investors’ strategy with projects that have the highest investment potential; this is good way for an adequate allocation of resources (regional competitiveness).

Originality/value

This paper analyzes very rare subject involving local government strategy of finance and portfolio investment in municipal bonds. There is a huge gap in the literature on this issue. Also, this study provides the model that can be used as a case for higher local competitiveness.

Details

Competitiveness Review: An International Business Journal , vol. 31 no. 5
Type: Research Article
ISSN: 1059-5422

Keywords

Content available
Article
Publication date: 3 July 2020

Thaer Jamal Temeiza

This paper aims to identify the impact of Clans and parties on mobilizing and guiding voters in the municipal elections in Palestine, from the point of view of Municipal

Abstract

Purpose

This paper aims to identify the impact of Clans and parties on mobilizing and guiding voters in the municipal elections in Palestine, from the point of view of Municipal Council members, especially the municipal elections in Hebron governorate for 2005 and 2017. The Palestinian society in Hebron governorate is characterized by the penetration of parties and clans, and this governorate is one of the most clan-based Palestinian provinces. It also relies on clans to run its social and political system as well as managing and shaping the guiding of its citizens.

Design/methodology/approach

The quantitative research method was used in this study, and the study population is consisted of members of the municipal councils in Hebron governorate, especially the councils classified (A, B).Whereas, the municipalities classified under category (A) are the ones in the center of the governorate, and the municipalities classified under category (B) are the most in the population. The study depended on a purposive sample of (200) Municipal Council members, including 100 municipal councilors in 2005 and 100 municipal councilors in 2017. The survey was conducted in the academic year (2018–2019). The method Four–Jurors (Reviewers) was used in collecting data.

Findings

The results of the study showed that clans and political parties are among the most prominent means of mobilizing and guiding voters in Palestine. The field study indicated thact clans and parties had a high impact on the mobilization and guiding of voters in the municipal elections in Hebron governorate in 2005 and 2017. This is due to the unity of the clan, its association with political parties and the overlapping between the clan and the party. Parties have also penetrated the Palestinian society besides its support to people who are loyal even it did not choose them in the elections. Moreover, many members of the electoral blocs are attributing themselves to the parties to gain their support in elections. Although Hamas did not participate in the 2017 elections, it had an impact on the electoral process by guiding its members not to elect Fatah blocs in the elections, or to support those who are close to this movement.

Originality/value

This study can be regarded as an introduction to identify the impact of clans and parties on mobilizing and guiding voters in the municipal elections in Palestine. Comparing that effect between the 2005 and 2017 elections, to find out how the strength of clans and parties differs in guiding their voters depending on the time period, as well as the ability of clans and parties to make political change by its influence on the political participation of its citizens.

Details

Review of Economics and Political Science, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2356-9980

Keywords

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Article
Publication date: 24 September 2021

Odwa Mazele and Christopher Amoah

Infrastructure development and management form the central part of the government's commitment and responsibility to deliver essential services to the communities…

Abstract

Purpose

Infrastructure development and management form the central part of the government's commitment and responsibility to deliver essential services to the communities. However, much focus has been placed on the development aspect, with very little focus on the management and maintenance aspects, causing service delivery problems. This study explores the causes of poor management of immovable municipal infrastructure in South Africa.

Design/methodology/approach

A qualitative approach was adopted; thus, a sample of 15 participants consisting of senior municipal workers, local organizations and forums in Ngqushwa Municipality in Eastern Cape were identified and interviewed. The interview data were analyzed using thematic content analysis to determine the common themes and the frequencies.

Findings

The study's findings indicate numerous causes of poor municipal infrastructure management, including lack of funding, lack of capacity, poor planning and oversight, lack of By-laws, grant dependency and corruption. The municipality's failure to address these issues has resulted in increased service protests, destruction of public property, interruption of services and loss of confidence in municipal administrations.

Research limitations/implications

Although the study concentrated on one municipality, the findings may be applicable to other South African municipalities.

Practical implications

To provide efficient services for the inhabitants to curtail aggravated service delivery protests, there is an urgent need for the municipalities to institute effective measures to manage and maintain the infrastructure that serves the communities.

Originality/value

The study has identified the factors underpinning ineffective management of the municipalities' facilities and the resultant's effects. Thus, the findings will guide the government and the authorities on the infrastructural management strategies for effective service delivery.

Details

Property Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0263-7472

Keywords

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