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Abstract

The municipal securities market has recently become the target of increased regulatory scrutiny. Once considered a “sleepy market,” the market is now burdened by new regulations, increased oversight, and heightened enforcement, which place direct disclosure obligations on municipal securities issuers. As such, the clear provisions of the 1975 Tower Amendment, which limit regulation of the municipal securities market to anti-fraud actions, have been cut off at all corners. This Article examines the fundamental discord between regulating the municipal securities market with the same structure and intensity as the corporate securities market. This Article proposes limiting the reach of federal regulatory bodies on the municipal securities market because of the harmful and unnecessary impacts caused by overbroad regulatory actions. To subdue these harms, this Article ultimately suggests that registration and disclosure requirements place undue burdens on municipal issuers and their counterparts, and that regulatory bodies should be limited to controlling municipal securities through anti-fraud actions.

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