April 2, 2017
Municipal Securities Disclosure File No. S7-01-17
Regarding proposed changes to Rule 15c2-12, I am concerned the new rules, combined with the lack of specificity regarding what constitutes "a material event" have the potential to result in significant burdens and costs to charter schools, for whom the municipal bond market is a primary source of capital funding. The proposed rule will only add to regulatory reporting burdens charter schools already face. I do not believe the SEC's economic analysis has sufficiently accounted for the extra costs and time the new rule will impose upon borrowers. For example, under the new rule, conscientious borrowers would incur legal fees to determine if leasing copier machines, a phone system, or debit card machines would constitute a material event.
Additionally, as public schools, charters may go through administrative hearings as part of due process under the Individuals with Disabilities Act. Would Administrative Law Judge decisions that require the charter school to provide compensatory services or place a student at a private school be mandatory reporting events under the new rule? As currently worded, schools would have to seek legal council to make that determination.
Given the new administration's recent Executive Order restricting the issuance of new regulations, I ask that the SEC undertakes a much more exhaustive analysis before adopting the proposed amendment.