Feb 26 The Financial Industry Regulatory Authority's board of governors has approved a plan that would require brokerage firms to disclose how much they mark up the price of most bonds they sell to retail customers, the Wall Street watchdog said on Friday.

FINRA's controversial plan is similar to a parallel proposal by the Municipal Securities Rulemaking Board (MSRB), which regulates municipal advisers and bond dealers. The joint plan aims to help the public assess the reasonableness of prices charged by brokers for corporate and municipal bonds.

Approval by FINRA's board of governors allows the Wall Street watchdog to submit the plan to the U.S. Securities and Exchange Commission, which must review and approve FINRA's rules.

Unlike stocks that have a price publicly available on an exchange, individual dealers determine the price at which they sell or buy bonds.

The parallel rules proposed by FINRA and MSRB, unveiled in 2014, would apply to corporate and municipal bonds bought by brokers and dealers on the same day they sell them to an investor. Most are purchased by dealers within an hour of the sale, presenting little risk of price volatility. However, the range of markups among dealers is substantial, FINRA's chairman and chief executive, Richard Ketchum, has said.

The securities industry has balked at the plan in letters to the regulators, describing it as expensive to implement, unnecessary and potentially confusing to investors.

The status of the MSRB's version of the rules was unclear on Friday. A spokeswoman was not immediately available to comment. (Reporting by Suzanne Barlyn; Editing by Andrew Hay)