April 26, 1999
 
 
 

                   Levitt Criticizes Securities Industry
                   Over Lack of Corporate Bond Data

                   By JUDITH BURNS
                   Dow Jones Newswires

                   SAN FRANCISCO -- Securities and Exchange Commission Chairman
                   Arthur Levitt took the bond industry to task on Friday for not doing
                   enough to publicize price and trading information for corporate bonds.

                   Mr. Levitt's remarks to a meeting of the Bond Market Association here
                   came just hours after the industry trade group unveiled a new initiative to
                   provide same-day price information on interdealer, investment-grade
                   corporate bonds. The voluntary, private initiative, dubbed Corporate
                   Trades I, is expected to provide price information for about one-third of
                   the $2.4 trillion corporate bonds and notes outstanding, a result Mr. Levitt
                   called "disappointing."

                   "The technology exists to gather all corporate debt transaction prices,
                   distribute them and interpret them in a timely, accurate and efficient
                   manner," said Mr. Levitt. "The time has come to illuminate this needlessly
                   dark corner of our capital markets."

                   Investors need better price information, since many corporate bonds aren't
                   actively traded and their value must be inferred from prices for other
                   bonds, he noted. "That's why comprehensive price transparency is so
                   crucial."

                   Regulators need comprehensive price data as well, to produce audit trails
                   that help them monitor markets and ferret out fraud and abuse, Mr. Levitt
                   added.

                   The SEC chairman chided the industry group for not doing more to
                   provide comprehensive corporate-bond price data to investors and
                   regulators. He challenged the group to match progress made in the U.S.
                   Treasury debt market and in the $1.4 trillion municipal-bond market.

                   The Municipal Securities Rulemaking Board began providing daily
                   summary reports of interdealer muni-bond trades in 1995, he said, and
                   expanded that last year to include customer trading data. Real-time
                   reporting of municipal bond trades is on tap, and Mr. Levitt suggested he
                   expects progress in that area "very soon."

                   Mr. Levitt seemed to hint that failure to make similar progress in the
                   corporate-bond sector could prompt the SEC to reconsider rules that
                   would require dealers to disclose their mark-ups on debt instruments.
                   Mark-up rules were last on the SEC's agenda in 1994, he reminded the
                   audience.

                   "We held off on the proposed measures because the industry told us that
                   transparency was a better alternative to mark-up disclosure," he noted.

                   SEC officials said Mr. Levitt wasn't threatening bond professionals by
                   bringing up the controversial mark-up issue, however. "That wasn't meant
                   as a veiled threat," Annette Nazareth, director of the SEC's market
                   regulation division, said after Mr. Levitt's speech.