SEC re­quires more dis­clo­sure from not-for-profit bor­row­ers

Modern Healthcare - - Late News -

Not-for-profit hos­pi­tals and health sys­tems that fi­nance con­struc­tion, technology and other cap­i­tal projects with tax-ex­empt, or mu­nic­i­pal, bonds face ex­panded dis­clo­sure of fi­nan­cial and op­er­at­ing in­for­ma­tion, start­ing Dec. 1. The Se­cu­ri­ties and Ex­change Com­mis­sion voted unan­i­mously to tighten and ex­pand dis­clo­sure rules for tax-ex­empt bor­row­ers. “The size of the mu­nic­i­pal mar­ket re­flects its sig­nif­i­cance to our econ­omy,” SEC Chair­man Mary Schapiro said at the meet­ing. Un­der the new rules, bor­row­ers no longer have dis­cre­tion over dis­clo­sure of cer­tain in­for­ma­tion, in­clud­ing: fail­ure to pay prin­ci­pal and in­ter­est; un­sched­uled pay­ment from debt ser­vice re­serves re­flect­ing fi­nan­cial dif­fi­culty; un­sched­uled pay­ments by par­ties back­ing bonds or their fail­ure to per­form; and de­fea­sances and rat­ing changes.

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