Banks Prevented by SEC From Hiding Some Municipal Bond Yields

The U.S. Securities and Exchange Commission approved regulations that will prevent banks from keeping secret the yields on certain state and local government bonds during the first trading day.

The SEC on Sept. 21 approved rules that require underwriters to disclose yields on bonds that aren’t immediately offered for resale to investors, the Municipal Securities Rulemaking Board said today. The board proposed the change in March, which will require more rapid dissemination of information that previously may not have been available to the public until the end of the trading day.

The rules are aimed at injecting more transparency into the $3.7 trillion municipal bond market, which is used by states, cities and school districts to finance public projects.

The change will make it easier for public officials and investors to compare yields on newly issued bonds during the first trading day. It takes effect on Nov. 1.

The SEC approves and enforces rules proposed by the Alexandria, Virginia-based Municipal Securities Rulemaking Board, which crafts regulations for the public finance industry.

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