Citing the collapse of the auction-rate securities market, leaders of the House Financial Services Committee are urging the Securities and Exchange Commission to quickly clarify that there is a way for municipal issuers to bid in auctions for their own securities within the bounds of the securities laws and rules.

"Allowing issuers to participate in auctions on a transparent basis, as they have proposed, is a reasonable way to increase demand for these securities and therefore lower issuer borrowing costs," committee chairman Barney Frank, D-Mass., Spencer Bachus, R-Ala., the ranking minority member, and Paul Kanjorski, D-Pa., the head of the capital markets subcommittee, told SEC chairman Christopher Cox in a two-page letter dated Feb. 28. "Any concerns the commission may have over future unintended consequences can be addressed by constructing the guidance as temporary to deal only with the present liquidity crisis."

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