The Public Securities Association has formed a task force to address secondary market problems with municipal derivatives.

Donald C. Carey, director at CS First Boston, and Michael G. Rantz, partner at Goldman, Sachs & Co., will co-chair the panel, called the Task Force on Derivatives Information Standardization, the PSA said yesterday..

"It is important that as the municipal derivative products market continues to develop and grow that the information needed to trade in these products is widely and freely available to the entire market, so. that an efficient and liquid secondary market is maintained," Rantz said.

The task force "was formed to insure that salient features of derivatives trading in the market are available to all market participants," the PSA said in a statement.

With a multitude of similar derivatives on the market, investors and dealers making trades in the secondary market have had problems establishing the exact structure and terms of particular securities. For example, interest rate formulas on floating-rate securities can be pegged to numerous indexes and calculated based on daily, weekly, or monthly readings.

Derivatives professionals say that they have difficulty pricing securities without knowing the exact terms.

The new panel will work to standardize basic information about the complex instruments and to create methods to disseminate the data.

The lack of adequate secondary market information led David Johnson, a portfolio manager at Van Kampen Merritt Investment Advisory Corp., to announce two weeks ago that he would stop buying derivatives.

The task force includes seven Wall Street officials, along with representatives of the major bond information providers: Bloomberg L.P., Muller Data Corp., and Kenny Information Systems. Muller Data is owned by Thomson Financial Services, the parent company of The Bond Buyer.

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