WASHINGTON - Federal regulators do not support wholesale removal of the Tower Amendment or exemptions from federal securities laws for municipal securities to improve municipal bond disclosure, the General Accountability Office said in a report issued Thursday.

Instead, Securities and Exchange Commission and Municipal Securities Rulemaking Board staff told the GAO that Congress may need to either give them authority, or amend the securities law exemptions for munis, to allow them to establish disclosure requirements on muni issuers, the report said.

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