SEC BONDS

SEC's Levitt pushes for greater price disclosure in corporate bonds

NEW YORK (AP) The nation's top securities regulator today unveiled measures to make pricing information about corporate bonds more readily available for individual investors.

Arthur Levitt Jr., chairman of Securities and Exchange Commission, said the corporate bond trading system needs to catch up with technology that provides immediate electronic access to prices for stocks and government bonds.

"Investors have a right to know the prices at which bonds are being bought and sold," Levitt said in a speech at the Media Studies Center in Manhattan. "Transparency will help investors make better decisions, and it will increase confidence in the fairness of the markets."

Unlike stocks, bonds are not traded in one central market, but rather through a relatively small group of dealers including major brokerages such as Merrill Lynch & Co. There have been calls for the creation of a single bond exchange, but Levitt said the current system needs to be improved, not scrapped.

Levitt said the National Association of Securities Dealers has agreed to adopt rules requiring dealers to report all corporate bond and preferred stock transactions to the NASD and develop systems for immediate disclosure of buying and selling prices.

The issue is particularly important now as the stock market tries to rebound from its sharp losses since mid-July on worries about growing economic crises abroad. Levitt noted that corporate bonds are integral to the stock market's performance, saying it would be difficult to make sound judgments on a company's stock without accurate data on its debt.

Levitt also said that the NASD will improve its efforts to detect fraud in corporate bond trading. While an SEC review that began earlier this year found that the overall bond market was running smoothly, it uncovered anecdotal evidence of possible insider trading that is currently under investigation, he said.