[Federal Register: June 15, 2006 (Volume 71, Number 115)]
[Notices]
[Page 34653-34654]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jn06-67]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53961; File No. SR-MSRB-2005-11]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Order Approving Proposed Rule Change and Amendment Nos. 1 and 2
Thereto Relating to Definition of Solicitation Under MSRB Rules G-37
and G-38
June 8, 2006.
On June 10, 2005, the Municipal Securities Rulemaking Board
(``MSRB'' or ``Board''), filed with the Securities and Exchange
Commission (``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change consisting of an interpretive
notice relating to the definition of solicitation for purposes of MSRB
Rules G-37 and G-38. On December 7, 2005, the MSRB filed Amendment No.
1 to the proposed rule change.\3\ The proposed rule change,
incorporating Amendment No. 1 (the ``original proposed rule change''),
was published for comment in the Federal Register on December 20,
2005.\4\ The Commission received one comment letter regarding the
proposal.\5\ On March 17, 2006, the MSRB filed Amendment No. 2 to the
proposed rule change in response to comments on the original proposed
rule change.\6\ The proposed rule change, incorporating Amendment No.
2, was published for comment in the Federal Register on May 5, 2006.\7\
The Commission received no comment letters on the proposed rule change
as amended by Amendment No. 2. This order approves the proposed rule
change as amended by Amendment Nos. 1 and 2.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 clarifies that the central element in
determining whether a communication is a solicitation is whether the
communication occurs with the purpose of obtaining or retaining
municipal securities business, and makes certain other changes.
\4\ See Securities Exchange Act Release No. 52948 (December 13,
2005), 70 FR 75514 (December 20, 2005) (the ``Commission's Original
Notice'').
\5\ See letter to Jonathan G. Katz, Secretary, Commission, from
Leslie M. Norwood, Vice President and Assistant General Counsel, The
Bond Market Association, dated January 10, 2006.
\6\ Amendment No. 2 deletes the footnote in the original
proposed rule change referencing guidance on the meaning of
solicitation under Rule G-37 previously provided in certain Question
and Answer interpretations (the ``Rule G-37 solicitation Qs&As'')
and instead inserts the substantive language of such Qs&As into the
text of the solicitation guidance provided in proposed rule change.
The MSRB filed a companion proposed rule change (see File No. SR-
MSRB-2006-01) to withdraw the Rule G-37 solicitation Qs&As and the
former Rule G-38 Question and Answer interpretations relating to
consultants.
\7\ See Securities Exchange Act Release No. 53747 (May 1, 2006),
71 FR 26575 (May 5, 2006).
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The proposed rule change makes clear that the central element in
determining whether a communication is a solicitation is whether the
communication occurs with the purpose of obtaining or retaining
municipal securities business. In addition, the proposed rule change
consolidates the MSRB's guidance on the definition of solicitation for
purposes of Rules G-37 and G-38.
The Commission finds that the proposed rule change, as amended, is
consistent with the requirements of the Act and the rules and
regulations
[[Page 34654]]
thereunder applicable to the MSRB \8\ and, in particular, the
requirements of Section 15B(b)(2)(C) of the Act and the rules and
regulations thereunder.\9\ Section 15B(b)(2)(C) of the Act requires,
among other things, that the MSRB's rules 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.\10\ In particular, the
Commission finds that the proposed rule change will help dealers
understand their obligations under MSRB rules designed to maintain
standards of fair practice and professionalism, thereby helping to
maintain public trust and confidence in the integrity of the municipal
securities market.
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\8\ In approving this rule the Commission notes that it has
considered the proposed rule's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78o-4(b)(2)(C).
\10\ Id.
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\11\ that the proposed rule change (SR-MSRB-2005-11), as amended,
be, and hereby is, approved.
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\11\ 15 U.S.C. 78s(b)(2).
\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-9347 Filed 6-14-06; 8:45 am]
BILLING CODE 8010-01-P