SEC Seeks More Openness About Corporate Bonds

Federal regulators and industry officials announced plans Wednesday to reshape the $2.3-trillion corporate bond market by making prices and trading information more widely available to investors.

Securities and Exchange Commission Chairman Arthur Levitt said that, as part of the effort, the National Assn. of Securities Dealers has agreed to take steps to improve the way prices are disseminated.

“The sad truth is that investors in the corporate bond market do not enjoy the same access to information as a car buyer or a home fruit. And that’s unacceptable,” Levitt said in a speech in New York. “Guesswork can never be a substitute for readily available price data.”

Although some corporate bond prices are posted on the New York and American stock exchanges, most are traded over the telephone by pension funds and other big investors who pass on pricing information by word-of-mouth.

Levitt said the NASD, which overses the Nasdaq, has agreed to make prices more widely available.

The new system to track corporate bond prices is expected to be up and running in 18 months, Nasdaq Chief Operating Officer Patrick Campbell said.