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Bulletin 3 for the Revised Municipal Finance Act

Bulletin 3 for the Revised Municipal Finance Act

EFFECTIVE DATE: June 6, 2003
SUBJECT: Bulletin 3; Act 34 of 2001

Interest Rate Exchange, Swap, Hedge, or Similar Agreements  

  1. Numbered paragraph 10 to Bulletin 1 originally provided: Municipalities that do not qualify pursuant to Section 303(3) must obtain the prior approval of the Department as required by Section 303(7) before entering into interest rate exchange, swap, hedge, or similar agreements as authorized in Section 317(1).
  2. In light of subsequent legislation that amended Section 317 of the Revised Municipal Finance Act, municipalities that do not qualify pursuant to Section 303(3) will no longer be required to obtain the prior approval of the Department before entering into interest rate exchange, swap, hedge, or similar agreements as authorized in Section 317(1). In place of the former process, the following shall now apply:
  3. All municipalities, qualified or not, must meet the conditions enumerated in Section 317(7) in order to enter into an interest rate exchange, swap, hedge, or similar agreement as authorized in Section 317(1) and: 

a) If a municipality is qualified pursuant to Section 303(3), the municipality must file documentation indicating compliance with Section 317(7), along with those documents currently required by Section 319(1), within 15 business days of completing the issuance of any municipal security in connection with an interest rate exchange, swap, hedge, or similar agreement as authorized in Section 317(1). 

b) If a municipality is not qualified pursuant to Section 303(3), the municipality must file documentation indicating compliance with Section 317(7), along with those documents currently required by Section 319(2), within 15 business days of completing the issuance of any municipal security approved under Section 303(7) that is in connection with an interest rate exchange, swap, hedge, or similar agreement as authorized in Section 317(1).

This bulletin is issued pursuant to Section 201(b) of the Revised Municipal Finance Act which authorizes the Department to issue bulletins or adopt rules to carry out the purposes of the Act.