[Federal Register: June 28, 2005 (Volume 70, Number 123)]
[Notices]
[Page 37142-37144]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28jn05-108]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51892; File No. SR-MSRB-2005-08]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing of Proposed Rule Change Regarding Amendments to
Rule G-40, on Electronic Mail Contacts, and Form G-40
June 21, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 26, 2005, the Municipal Securities Rulemaking Board (``MSRB'' or
``Board'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by the MSRB. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The MSRB is filing with the Commission a proposed rule change
consisting of amendments to Rule G-40, on electronic mail contacts, and
Form G-40 that would: (i) Eliminate the need
[[Page 37143]]
for paper submission of original forms; (ii) require each broker,
dealer and municipal securities dealer (collectively ``dealers'') to
maintain an Internet electronic mail account to permit communication
with the MSRB; and (iii) require each dealer to review and, if
necessary, update its Primary Contact information each calendar
quarter. The text of the proposed rule change, as well as proposed
amended Form G-40, are available on the MSRB's Web site (http://www.msrb.org
), at the MSRB's principal office, and at the Commission's
Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the MSRB included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The MSRB has prepared summaries, set forth in Sections
A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The events of September 11, 2001 and the weeks that followed,
emphasized the importance of, and need for an efficient and reliable
means of official communication between regulators and the industry.
Establishing a reliable method for electronic communication was
necessary to allow the MSRB to efficiently alert dealers to official
communications, including time-sensitive developments, rule changes,
notices, etc., as well as to facilitate dealers' internal distribution
of such information. In addition, the MSRB discontinued publication of
MSRB Reports in 2002; MSRB notices have since been available
exclusively on the MSRB's Web site at http://www.msrb.org. Thus, in
2002 the MSRB adopted Rule G-40, on e-mail contacts, to ensure that
such notices and other MSRB communications continued to reach each
dealer.\3\
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\3\ Rule G-40 was approved in SEC Release No. 34-46043 (June 6,
2002), 67 FR 40762.
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Rule G-40 requires dealers to use Form G-40 to appoint a ``Primary
Contact'' for purposes of electronic communication between the dealer
and the MSRB. The Primary Contact must be either a Series 53-registered
municipal securities principal or a Series 51-registered municipal fund
securities limited principal.\4\ Currently, dealers must submit their
original Forms G-40 by mail. Thereafter, any changes to the forms may
be made by mail or electronically through the dealer's electronic G-40
account using the appropriate user ID and password.
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\4\ Dealers may also appoint an ``Optional Contact'' and this
person does not have to be a registered principal.
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As the process of electronic communication between dealers and the
MSRB has evolved over the past few years, it has become apparent that
certain changes and enhancements are now required to ensure that this
process remains both efficient and practical. In addition, the MSRB has
observed that certain differences exist between Rule G-40 and similar
NASD requirements. Whenever possible, the MSRB attempts to adopt
similar provisions and comparable language to NASD rules in order to
facilitate dealer understanding of and compliance with such provisions,
as well as inspection and enforcement. NASD requires that each member
appoint an ``executive representative'' to, among other things, serve
as the official contact person between the member and the NASD.\5\ NASD
also requires that the executive representative maintain an Internet e-
mail account for communication with NASD. And in May 2004, NASD Rule
1150 became effective which requires NASD members to review and, if
necessary, update their executive representative designation and
contact information within 17 business days after the end of each
calendar quarter.\6\
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\5\Article IV, Section 3 of the NASD By-Laws requires members to
appoint and certify to NASD one ``executive representative'' to
represent, vote and act for the member in all NASD affairs. The
executive representative must be a member of the firm's senior
management and a registered principal of the member.
\6\ SEC Release No. 34-49497 (March 29, 2004), 69 FR 17723.
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The MSRB believes that Rule G-40 should contain an update provision
similar to NASD's, and that, like NASD, its entire process should be
electronic. Thus, the proposed amendments to Rule G-40 would require
dealers to maintain an Internet e-mail account to permit communication
with the MSRB, and would require that all Form G-40 submissions--
initial forms and subsequent updates and amendments--be completed
electronically using the appropriate user ID and password. In addition,
the amendments would require dealers to review and, if necessary,
update information on their Primary Contact within 17 business days
after the end of each calendar quarter. The proposed amendments to Rule
G-40 necessitate certain changes to Form G-40, including an indication
that electronic submission is required.
2. Statutory Basis
The MSRB believes that the proposed rule change is consistent with
Section 15B(b)(2)(I) of the Act,\7\ which authorizes the MSRB to adopt
rules that provide for the operation and administration of the MSRB.
The MSRB believes that the proposed rule change is consistent with this
provision in that it will facilitate effective electronic communication
between dealers and the MSRB, and that by ensuring MSRB requirements
for electronic communication are substantially similar to NASD
requirements, it will facilitate dealer understanding of, and
compliance with, these requirements.
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\7\ 15 U.S.C. 78o-4(b)(2)(I).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The MSRB does not believe that the proposed rule change will result
in any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received on the
proposal.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
A. By order approve such proposed rule change, or
B. Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
[[Page 37144]]
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-MSRB-2005-08 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-MSRB-2005-08. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the MSRB's
offices. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
MSRB-2005-08 and should be submitted on or before July 19, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-3346 Filed 6-27-05; 8:45 am]
BILLING CODE 8010-01-P