WASHINGTON — Pre-trade reporting of muni-bond offers and bids by so-called alternative trading systems could improve liquidity in the $3.7 trillion municipal market. Or, it could make liquidity worse.

In recent interviews with The Bond Buyer, firms that operate ATS — the electronic marketplaces where dealers buy and sell munis — reacted differently to the Securities and Exchange Commission’s July 31 market report, which recommended that they be required to publicly distribute the best offers and best bids submitted by dealers for muni bonds.

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