[Federal Register: April 18, 2008 (Volume 73, Number 76)]
[Notices]
[Page 21166-21167]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18ap08-104]
[[Page 21166]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57659; File No. SR-MSRB-2008-03]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing of Proposed Rule Change Relating to Rule G-11,
on New Issue Syndicate Practices, and Rule G-12, on Uniform Practice
April 14, 2008.
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 March 18, 2008, the Municipal Securities Rulemaking Board (``MSRB''
or ``Board'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially 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-11 and Rule G-12 that (a) delete
Rule G-12(i); (b) consolidate the remaining syndicate practice
provisions of Rule G-12 into Rule G-11; (c) delete the syndicate-
related sections of Rule G-12; and (d) make minor technical corrections
to Rule G-11. The text of the proposed rule change is 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
Rule G-11, on new issue syndicate practices, sets forth basic
requirements for dealers serving as senior managers or members of
underwriting syndicates. Rule G-12, on uniform practice, includes
additional settlement-related provisions in connection with syndicate
operations. The Board has determined to consolidate the syndicate
practice provisions into Rule G-11 by deleting the syndicate-related
sections of Rule G-12 and inserting them into Rule G-11, as well as to
make minor technical corrections to Rule G-11. This consolidation will
put the Board's syndicate practice requirements into a single rule and
thereby reduce the possibility of rule violations due to inadvertent
failures to note the additional syndicate practice provisions that are
currently embedded in Rule G-12 among other un-related provisions.
In addition, the Board has also determined to delete Rule G-12(i),
on good faith deposits, in order to clarify and modernize its rules to
bring them into line with the realities of current market practice
without compromising investor protection. A good faith deposit was in
the past generally delivered to a municipal bond issuer by a firm
competing for the underwriting business of the issuer. If the syndicate
was not successful in purchasing the issue, Rule G-12(i) required the
syndicate manager to return the deposit to the members of the syndicate
within two business days following the return of the deposit from the
issuer. Under current market practice, generally such deposits are not
advanced either because they are not required by issuers or are treated
as an expense of the syndicate for which syndicate managers give an
accounting to syndicate members pursuant to MSRB rules.
2. Statutory Basis
The MSRB believes that the proposed rule change is consistent with
section 15B(b)(2)(C) of the Act,\3\ which provides that the MSRB's
rules shall:
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\3\ 15 U.S.C. 78o-4(b)(2)(C).
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Be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in municipal securities, to remove
impediments to and perfect the mechanism of a free and open market in
municipal securities, and, in general, to protect investors and the
public interest.
The Board believes that the proposed rule change will facilitate
transactions in municipal securities and protect investors and the
public interest by creating a consolidated rule that seeks to avoid
inadvertent rule violations and clarifies and modernizes its rules to
bring them into line with the realities of current market practice
without compromising investor protection.
B. Self-Regulatory Organization's Statement on Burden on Competition
The MSRB does not believe that the proposed rule change will impose
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act since it would apply equally to
all brokers, dealers and municipal securities dealers.
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.
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:
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-2008-03 on the subject line.
[[Page 21167]]
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-MSRB-2008-03. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the MSRB. 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-2008-03 and should be
submitted on or before May 9, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\4\
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\4\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E8-8348 Filed 4-17-08; 8:45 am]
BILLING CODE 8010-01-P