(Bloomberg) -- U.S. regulators will likely test the market impacts of delaying the disclosure of huge corporate bond trades after some of the biggest investors argued such a move would improve liquidity.

The Financial Industry Regulatory Authority last week proposed running a pilot program that would give traders 48 hours before having to reveal their so-called block trades to other investors. The effort would allow the brokerage regulator, which is overseen by the U.S. Securities and Exchange Commission, to evaluate how delayed transparency might affect corporate bond trading.

Current rules require that block trades be reported within 15 minutes. Brokers and investment firms such as BlackRock Inc. and Pacific Investment Management Co. have long said that such rapid disclosure can make it difficult to execute such trades in less-liquid bonds because the transparency tips off other market participants.

Brokerages have said "there is some amount of trading that is not being done today because the dissemination affects the ability of the broker who’s committing capital to recoup a fair return”, Finra Chief Economist Jonathan Sokobin said in an interview on Monday. “But, that’s an open question -- that’s the story that’s being told.”

Finra’s 48-hour delay would affect trades of more than $10 million in investment-grade debt and trades greater than $5 million for speculative-grade bonds. The regulator will seek public comment for 60 days on whether to move forward with the pilot.

--With assistance from Sridhar Natarajan.

To contact the reporter on this story: Ben Bain in Washington at bbain2@bloomberg.net

To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott

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