Federal regulators may prevent municipal bond executives from financing inaugural parties or paying transition costs for Rudolph Giuliani, New York City's mayor-elect, sources with knowledge of the issue said.

The Municipal Securities Rulemaking Board, the industry's self-regulatory agency, wrote Giuliani transition officials that public finance executives who contribute funds to help finance the mayor-elect's transition team may violate rule G-20, which limits gifts and gratuities from market executives to municipal bond issuers.

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