ATLANTA -- A provision in the SEC's proposed disclosure rule, which would bar dealers from recommending bonds to customers is an issuer failed to provide promised information, could halt trading in certain bonds, a top industry official said Friday.

"This is inviting a situation where you are going to shut down the market for bonds," Micah Green, executive vice president of the Public Securities Association, told a PSA seminar held here to discuss the Securities and Exchange Commission's proposals that are designed to improve municipal disclosure.

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