The Philadelphia Stock Exchange has asked the SEC to allow it to list municipal bonds for trading, exchange officials said last week.

The exchange submitted its application to the Securities and Exchange Commission earlier this month.

Richard Cangelosi, the exchange's assistant vice president in charge of new product development, said that exchange-traded municipal bonds "trade in a centralized marketplace" and "that should lead to tighter spreads between the bid and offer price."

But so far, even though at least four stock exchanges have obtained authority to list municipal bonds, they either have not followed through with any listings or they have listed bonds that are not actively trading.

The Pacific Stock Exchange obtained SEC approval to list tax-exempt bonds in March, but has not yet followed through with plans to list tax-exempt bonds from California issuers.

"We thought it might be good business to list and trade these bonds but we haven't gone very far with it yet," a representative said.

The American Stock Exchange and the New York Stock Exchange currently list municipal bonds, but they are not actively traded.

In its application to the SEC, the Philadelphia Stock Exchange proposed several requirements municipal bonds would need to meet to be listed: an aggregate market value and principal amount of at least $20 million; at least 100 bondholders; and an investment-grade credit rating of BBB or higher from a nationally recognized rating service.

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