HOUSTON -- The Securities and Exchange Commission's proposals on disclosure for municipal bond issues and dealer markups for so-called riskless principal transactions will jeopardize bond liquidity and drive up costs, according to industry officials.

At a Public Securities Association meeting last week in Houston, investment bankers and issuers expressed concern that the SEC plans to boost requirements for secondary disclosure information, and that dealer fees would discourage bond trading for several reasons. Those included regulations that dealers review an avalanche of paperwork that would cost money to store, access, and review.

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