When you hear people talking about bond compliance, what they’re usually referring to are arbitrage bonds. Arbitrage bonds are bonds that are issued, and then the profits from those bonds are used to make even greater profits by investing them into higher-yielding and inherently more risk investments and securities. In essence, what people are doing when they create an arbitrage bond is they’re taking advantage of the tax advantages associated with bonds to make more money by putting that money into riskier investments that have the potential to yield large profits. It’s a complicated financial transaction, one which the federal government has gone through great lengths to try and dissuade people from engaging in. That’s why the federal government has put into place all kinds of regulations and rules regarding arbitrage rebate.
The real issue with remaining compliant on arbitrage bonds has less to do with how complicated the process is, although it is quite complex, and more to do with the fact that the rules and regulations surrounding bond compliance are always changing. It seems like virtually every single year the laws surrounding bond compliance change. The federal government will notice a few things here and there, and then they’ll change the rules regarding how individuals and firms can stay compliant on their bonds. This ever-changing aspect of bond compliance is the single thing that makes it most difficult for people to remain compliant. One could argue that the federal government is constantly making this changes in an increased effort to dissuade people from engaging in arbitrage-type transactions, and that certainly might be the case. Regardless of why they do it, the fact remains that this constant changing of the law makes things difficult for individuals and firms who engage in arbitrage.
The fact that the laws and regulations are constantly changing is one of the reasons why so many individuals and organizations who engage in arbitrage hire outside firms to handle it for them. Most people simply don’t have the time and the know how to go through all of the regulations that come out each year and figure out which ones apply to them. Instead, they’d much rather hire someone else to take a look at all of that stuff and determine how it impacts them. Unless firms or individuals can hire a person who can work full-time at trying to keep abreast of the changes in the regulatory framework surrounding arbitrage bond compliance, there’s simply no way for them to remain compliant.
If you engage in arbitrage and you need to make sure that you’re being fully compliant, you would be best off hiring Arbitrage Compliance Specialists. They’ve been practicing for more than 30 years now, and during that time they’ve never made a single error for any of their clients. That’s because they have an attorney on-staff all throughout the year who works to ensure that any regulatory changes are being included in their arbitrage compliance calculations. Hire them and you’ll never have any problems remaining compliant on arbitrage bonds.