Looking out for little guy? (Investments & Finance).

SOME day soon, getting a price on a municipal bond may be just as easy as getting a price on a stock. At least that's the plan of the Municipal Securities Rulemaking Board, the self-regulatory organization that oversees the municipal bond market.

The MSRB, which provides information on bond trades the day after they occur, wants to move to real-time price dissemination by the middle of next year.

Won't that be a good thing if you want to buy a bond? You will be able to find out how it has been trading and evaluate its price.

Not so fast, says the Bond Market Association, which represents municipal bond dealers. The association is worried about the possible impact of price dissemination on the liquidity of the market for some bonds.

"For inactively traded bonds, the publication of price information, particularly in block size, may provide information to other market participants affecting the ability of a holder of the same bonds to sell them without incurring a loss," the asociation said in a letter.

An example would be bonds issued by an airport authority and backed by an airline. These are municipal bonds, yet they are repaid by the airline, not from municipal taxes.

Let's say the bonds are downgraded, as so many of the airline-backed bonds have been since the Sept. 11, 2001 terrorist attacks put a dent in air travel. Now let's say a municipal bond fund wants to sell a block of them. If everyone knows the bonds have been downgraded, the price will go down. If everyone knows that a big holder of those bonds is selling them -- big holders of bonds don't often just come in and get rid of $4 million or $5 million of bonds in one shot, most would sell them over the course of a few days -- the price will go down even further.

"Institutional investors holding complex, 'story,' or high yield bonds also may be legitimately concerned that quick dissemination will impact the price at which they are able to dispose of particular bonds," according to the Bond Market Association's letter.

What does this mean? Some bond funds can only put their money into investment-grade bonds. If the bonds have been rated below investment grade, the fund holding those bonds would have to sell. And if everyone knows that the fund is getting rid of its bonds, those prices would go way down, and the institutional investor would lose money, unless he sold all his holdings in one day.

So, the dealers say, it's really all about the beleaguered individual investor. If you break up the clubby nature of the municipal market, and if you prevent us from helping those big investors work out of bond holdings that have become, shall we say, uncomfortable, then we're all going to go out of business.

Am I the only one to get suspicious when the Bond Market Association says the status quo benefits the individual investor?