WASHINGTON - The Treasury Department has sent lawmakers draft derivatives legislation that would prohibit municipalities that have less than $50 million in discretionary investments from participating in over-the-counter derivative transactions that are not centrally cleared or exchange-traded.

But it appears the draft legislation, which Treasury officials detailed yesterday in a conference call with reporters, would not expand the commission's existing anti-fraud authority over municipal-bond related interest rate swaps, according to sources.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.