Using the Internet to Assist in Debt Management
Zorn, Paul, Government Finance Review
In 1996, the Government Finance Officers Association and the MBIA Insurance Corporation released the results of a survey showing strong interest among state and local finance officers in the use of the Internet and other on-line technologies to enhance the finance function. When respondents were asked how they plan to use on-line technology to enhance debt management over the next two years, 39 percent indicated plans to use it to receive information about relevant state and federal regulations, 37 percent to monitor economic and financial indicators, 25 percent to monitor prices and interest rates for bond market offerings, 20 percent to send disclosure information to repositories or rating agencies, and 13 percent to post preliminary official statements on-line to attract investor interest.
The purpose of this article is to provide information about current World Wide Web sites that may be useful to public finance officials for enhancing debt management. The article groups the sites into four categories, roughly conforming with the planned activities described above. Since an earlier Government Finance Review article listed useful sites for monitoring financial news, interest rates, and economic indicators, such sites will not be included in this article.(1) Readers should note that many of the sites listed below post some of their information as portable document format (PDF) files, which are useful for integrating text and graphics. Such files require the Adobe Acrobat reader to view, which is freely available from Adobe's Web site (http://www.adobe.com).
Tax-exempt Debt Regulations
The legislative and regulatory environment for tax-exempt securities seems to be in a constant state of flux, requiring vigilance by issuers to ensure they understand the current rules and regulations. Although professional legal assistance is required for interpreting the regulations and applying them to specific bond issues, it is useful to monitor potential changes to the regulations and to comment on changes that are likely to affect the costs of issuance. The following sites are useful for monitoring the legislation and regulations related to tax-exempt debt.
U.S. Internal Revenue Service Tax Regulations (http://www.irs.ustreas.gov/prod/tax_regs/index.html). The U.S. Internal Revenue Service (IRS) is charged with promulgating and ensuring compliance with thousands of federal regulations, among which are those related to arbitrage restrictions on tax-exempt bonds. In order to help manage inquiries and comments related to proposed changes in all regulations, the IRS has revised its Web site to include a section summarizing the proposed changes in "plain English," links to the full text of the changes, and a system for viewers to comment on the changes while on-line. As of mid-December 1996, the site contained proposed regulatory changes on arbitrage restrictions that would address the practice of "yield burning," the practice of pricing securities to artificially reduce their yield.
U.S. Securities and Exchange Commission (http://www.sec.gov). The U.S. Securities and Exchange Commission (SEC) is an independent federal regulatory agency responsible for administering federal securities laws. The SEC Web site publishes a wealth of information about proposed and final rules, concept and interpretive releases, news digests, enforcement activities, and other Internet sites of interest. The site provides a search facility for culling the material. Readers interested in a summary of the SEC's past activities in the municipal securities area should turn to the "Municipal Securities Initiatives" section of the 1995 annual report, which is in the About the SEC section. Considerably more detail can be obtained by doing a keyword search on the term "tax-exempt," which matched 54 documents, including weekly news digests, proposed and final rules, enforcement actions, and speeches dating back over the past year.
Municipal Securities Rulemaking Board (http://www. …