Levitt Dresses Down Corporate Bond Dealers

SAN FRANCISCO -- The conflict between the nation's bond dealers and Securities and Exchange Commission Chairman Arthur Levitt over the lack of price transparency in the corporate bond market reared its head again today at the dealer association's annual meeting here.

In September, Levitt made a speech calling for regulatory changes to address the fact that even institutional investors often fly blind when buying corporate bonds. Because there has been no comprehensive quote system for corporate bond prices, investors have lacked reference points for determining how much is too much to spend for a bond.

Levitt called on the National Association of Securities Dealers to adopt rules requiring dealers to report all transactions in U.S. corporate bonds and preferred stocks to the NASD, and to develop real-time price quotation systems. Investors, Levitt said, "have a right to know the prices at which bonds are being bought and sold." ...