MuniMarket.com's Olson proposes muni exchange to SEC, state treasurers

By Toni Weeks

San Diego, March 23 - Kevin Olson, founder of MuniMarket.com, is calling for reform of the municipal bond markets through the creation of a muni market exchange, according to a press release.

Olson has sent an e-mail to the Securities and Exchange Commission and the National Association of State Treasurers asking if muni issuers, such as states, can list on an exchange or exchange platform "similar to how corporations list their stock" following the initial issuance of bonds. Both the SEC and the NAST are considering the idea.

"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. MuniMarket.com could be that centralized muni market exchange if state treasurers step up."

According to Olson, the creation of a formal exchange would allow buyers and sellers to get the best prices, in contrast to the current "captive" market system that allows Wall Street brokerages to 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."

If there is no interest, MuniMarket.com will continue to operate as an exchange platform, Olson said.

In addition to MuniMarket.com, Olson also operates MuniAdvocate.com, a website devoted to improving public finance and helping muni investors.

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