WASHINGTON - Barring municipal securities dealers from recommending bonds to investors unless the issuer has pledged to provide secondary market disclosure could wreak havoc with bond sales, a Public Securities Association official said yesterday.

Micah Green, executive vice president of the PSA, said a recommendation that issuers be indirectly required to pledge in bond documents that they will provide ongoing disclosure would create a "presumption" among investors that many municipal bonds are not liquid in the secondary market. Such a recommendation was made by the Securities and Exchange Commission staff to Congress last week.

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