FOR IMMEDIATE RELEASE                             98-81

        SEC Chairman Arthur Levitt Announces Measures to
          Improve Transparency of Corporate Debt Market
                                
     Washington, DC, September 9, 1998 -- Securities and Exchange
Commission Chairman Arthur Levitt today announced new measures
that will dramatically improve the price transparency/* of the
corporate debt market.  Levitt also discussed preliminary
findings from an SEC review of the debt securities market.

     In a speech at the Media Studies Center in New York City,
Chairman Levitt called for increased price transparency in the
corporate debt market, saying, "Investors have a right to know
the prices at which bonds are being bought and sold.  This will
help them make better decisions, and it will increase confidence
in the fairness of the markets.  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 homebuyer or even a fruit buyer.
And that's unacceptable.  Guesswork can never be a substitute for
readily available price data."

     To address the lack of price transparency in the corporate
debt market, Chairman Levitt said that the National Association
of Securities Dealers has agreed to take the following action:

*    Adopt rules requiring dealers to report all transactions in
     U.S. corporate bonds and preferred stocks to the NASD and to
     develop systems to receive and redistribute transaction prices on
     an immediate basis;
*    Create a database of transactions in bonds and preferred
     stocks. This will enable regulators to take a proactive role in
     supervising the corporate debt market, rather than only reacting
     to complaints brought by investors; and
*    Create, in conjunction with the development of a database, a
     surveillance program to better detect fraud in order to foster
     investor confidence in the fairness of these markets.

     Levitt noted, "These actions will likely result in a higher
level of price transparency for the corporate debt market than
what currently exists in municipal securities.  And with the
strong improvements the municipal markets have undertaken
recently, this is no small accomplishment.  I hope that in the
near future corporate securities will no longer be lagging but,
rather, leading in the pursuit of greater price disclosure."

SEC Review of Debt Securities Market

     Earlier this year, the SEC began reviewing the U.S. market
for debt securities.  The preliminary findings:

     First:  Overall, the bond market is functioning effectively.
The initial review found that the market for government
securities is characterized by high-quality pricing information
for investors.  The review suggests that because of steps taken
over the last few years, transparency is much greater in the
municipal securities market.  However, in the area of corporate
bonds, price transparency is simply not up to par.

     Chairman Levitt said, "Technology is revolutionizing how
business is conducted.  But the corporate debt market still
remains one of the last major markets in the United States to not
have some type of electronic price disclosure system.  I think it
is fair to say that the recent volatility in the markets
underscores the need for greater price transparency in this
market."

     Second:  The staff review found anecdotal reports that
certain mortgage-backed securities,
known as collateralized mortgage obligations (CMOs) are being
sold to individual investors without those investors having full
understanding of the risks involved.  (A CMO is a bond with a
percentage interest in a pool of home mortgages.)

     Chairman Levitt said, "These are complex financial
instruments.  Even professionals require sophisticated analytical
tools to evaluate them properly.  I doubt that many individual
investors realize exactly what they have purchased.  I am also
troubled by reports that brokers may be marketing only the higher-
risk classes --  or tranches -- to individual investors, while
lower-risk classes are sold exclusively to institutions."

     Third:  The analysis found anecdotal reports of the possible
misuse of inside information in the high-yield market.  The
Commission learned that investment bankers and institutional
investors who buy high-yield corporate bonds sometimes
participate in syndicated loans for those same corporations
issuing high-yield debt.

     Chairman Levitt said, "These participants in syndicated
loans are entitled to send representatives to regular meetings
with the borrower's management and bankers.  Fine.  But if
confidential information from internal discussions in these
meetings is improperly used or     leaked -- affecting the prices
of these companies' bonds -- that would be unacceptable."

     He continued, "Insider trading -- whatever its form -- is
simply wrong.  These matters are now under investigation and you
can be sure that if we discover abuses, we will be quick to take
action."

     Chairman Levitt concluded, saying, "If we continue to be
vigilant in the dissemination of market information to all
investors, our nation's markets will remain the envy of the
world.  You can be sure the SEC will do its part.  I expect all
our markets to do theirs."

Background Information on Bond Market

     The bond market's significance is matched only by its size.
While New York Stock Exchange equity trading amounts to $26
billion per day, total trading volume in all bond markets total
roughly $350 billion per day.  U.S. corporate bonds outstanding
have more than quadrupled since 1980.  Municipal bonds have
experienced similar growth.  The total value of the bond market
today is more than $10 trillion -- up approximately 400 percent
since 1980.



/*(Transparency in the securities markets is the extent to which
timely data on prices is visible and understandable to all market
participants.)
                                
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