WASHINGTON -- The Public Securities Association wants municipal bond information to be about as common as crossword puzzles in the nation's newspapers, but less difficult to solve.
The association, which represents banks and brokerage firms that deal in municipal, Treasury, mortgage-backed, and other asset-backed securities, unveiled plans yesterday to make municipal bond prices more accessible to individual investors.
At present, hardly any municipal bond information is available to retail investors.
"We think the individual is a very important part of the market, and therefore the ability to get this price information to them in a readable, usable form is extremely important to our marketplace," said association chairman R. Fenn Putman, who is managing director at Lehman Brothers Inc.
To improve price dissemination, the association said it will develop a generic scale or yield curve for insured triple-A-rated bonds that it hopes will be published in major newspapers across the country. The scale will be made available to the press at no cost. The association will send out requests for proposals for the plan next week.
"We think this product will be out by early March of next year," said Heather Ruth, the association's president.
"We believe that the initial product will be a national product designed to be presented in national newspapers, but we want to explore very quickly and move as fast as possible to develop perhaps a regional variance of that," Ruth said.
The scale, which would be based on the most complete real-time price information available to the professional market, would help educate investors about the general level of the market for different bond maturities.
In addition to pushing for easy-to-understand municipal bond information being published in newspapers, the association wants investors to be able to access municipal bond information by telephone.
The association said it will establish a 900 number telephone service for investors.
Preliminary plans call for a service that would permit investors to obtain the last transaction price or yield of a bond, the date of the transaction, and possibly comparative information on a benchmark security, such as a U.S. Treasury bond.
Ruth said the PSA hasn't determined what information will be provided in the phone service.
In cases in which a security hasn't been traded for a long time, the telephone service possibly could provide the price of a Treasury or a comparable municipal security, which would emulate more of what the dealer community does when pricing securities.
"We don't know the answer to that question yet," Ruth said. "We're going to work with a vendor and with our committee, and if we think it can be done and we think that the product can be offered at a price that is valuable enough that it justifies the price that individual investors are willing to pay, we will move forward with that."
Requests for proposals for the telephone service are also expected to go out next week. Ruth said the association will determine in April if it can produce a useful telephone service and, if so, could launch a pilot program by mid-June.
The association said it will promote its planned services aggressively to 15 specific major media markets around the country. It will work with editors and publishers at major newspapers that could include USA Today, the New York Times, the Los Angeles Times, the Chicago Tribune, the Boston Globe, the Philadelphia Inquirer, and the Miami Herald.
In addition, the association said it will survey its members early next year to determine if they will be prepared for later phases of the Municipal Securities Rulemaking Board's plans to beef up municipal securities disclosure.
The rulemaking board's later efforts, which focus on improved disclosure to retail customers, are expected to be embarked upon in 1996. Ruth said the Public Securities Association's efforts are to fit "hand in glove" with the rule-making board's efforts.
