WASHINGTON -- The Public Securities Association yesterday asked firms to submit proposals to develop programs to improve the availability of bond pricing information for retail investors in the municipal bond market.
Specifically, the association asked firms to submit proposals by Jan. 4 to develop a generic scale or yield curve for insured triple-A-rated bonds that can be published in national and regional newspapers.
The PSA also asked firms to submit proposals by Jan. 11 to develop a 900 number telephone service for investors seeking bond information.
The request for proposals is part of a Public Securities Association initiative to improve price transparency in the municipal market.
The association proposed the initiative earlier this year to help convince the Securities and Exchange Commission to defer a proposal to require broker-dealers to disclose markups in riskless principal transactions.
The SEC proposed the disclosures of markups for riskless principal transactions last March along with secondary market disclosure rules. Riskless principal transactions are those in which broker-dealers almost simultaneously buy and sell bonds without holding them in inventory, usually to fill an order.
The PSA complained that the proposal would provide little meaningful information to investors and create unfair competition among firms. Dealers would react to such a requirement by simply refusing to do riskless principal transactions from the market, firms said in comments on the proposal.
The SEC agreed to defer its riskless principal transaction proposal for six months to give the PSA and Municipal Securities Rulemaking Board initiatives on price transparency a chance to work.