WASHINGTON - The Securities and Exchange Commission hopes to issue guidance by Friday that will allow issuers to bid on their own auction-rate securities with "appropriate disclosures and in compliance with certain other conditions," Erik Sirri, the SEC's director of markets and trading, told members of the House Financial Services Committee yesterday.

"This guidance would be designed to clarify that ... municipal issuers can provide liquidity to investors that want to sell their auction-rate securities without triggering market manipulation concerns," Sirri said in testimony at a hearing on the turmoil in the municipal market. "This may also have the secondary effect of easing substantially the financial burden on municipal issuers and conduit borrowers from unusually high interest rates. It also should facilitate an orderly exit from this market by municipal issuers and conduit borrowers who seek to do so."

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