WASHINGTON -- The Public Securities Association is urging the Internal Revenue Service to make three revisions to the new arbitrage rules, saying the changes "are essential to the continued growth of the municipal market."

The industry trade group recently sent the IRS a letter and memorandum outlining the proposed changes that would allow certain embedded interest rate swap, embedded cap, and matching floater and inverse floater bond transactions to be treated as fixed-yield issues for arbitrage purposes.

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