Aug. 5 (Bloomberg) — U.S. regulators may require brokers to disclose the prices paid for municipal bonds that are resold to their customers, a shift aimed at injecting more transparency into the market.
The Municipal Securities Rulemaking Board, which writes regulations for the $3.7 trillion market, said today it will solicit comments on whether brokers should be required to reveal what they paid for bonds that are then resold on the same day. It would be a first step toward imposing new obligations on brokers, a process that takes months.
The added disclosure could foster competition by helping investors understand what they are being charged by their brokers. Such fees are embedded in prices they charge customers for securities, which can make it difficult for investors to shop comparatively.
"It's reasonable to believe there's some value in knowing what the dealer paid," Dan Heimowitz, the chairman of the Alexandria, Virginia-based board told reporters on a conference call today.
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