Federal Register / Vol. 76, No. 41 / Wednesday, March 2, 2011 / Notices 11545 

32 In approving this rule proposal, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. 15 U.S.C. 78c(f). 

33 15 U.S.C. 78o–3(b)(6). 

34 15 U.S.C. 78s(b)(2). 

35 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b4–(f)(6). 

deductible amount elected by the 

member that is greater than 10% of the 

coverage purchased must be deduced 

from the member’s net worth in the 

calculation of its net capital for 

purposes of Exchange Act Rule 15c3–1. 

IV. Discussion 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities association.32 In particular, 

the Commission believes the proposal is 

consistent with the requirements of 

Section 15A(b)(6) of the Act,33 which 

requires, among other things, that the 

Association’s rules be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. The Commission 

believes that FINRA adequately 

addressed the comments raised in 

response to the notice of this proposed 

rule change. 

The Commission believes that 

FINRA’s proposed Rule 4360 (Fidelity 

Bond) will update and clarify the 

requirements governing fidelity bonds 

for adoption in the Consolidated FINRA 

Rulebook. The Commission believes 

that the proposed requirements of 

FINRA Rule 4360, including, but not 

limited to, requiring each member that 

is required to join SIPC to maintain 

blanket fidelity bond coverage, 

increasing the minimum requirement 

fidelity bond coverage and maintaining 

a fidelity bond that provides for per loss 

coverage without an aggregate limit of 

liability promotes investor protection by 

protecting firms from unforeseen losses. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,34 that the 

proposed rule change (SR–FINRA– 

2010–059) is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4690 Filed 3–1–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63962; File No. SR–MSRB– 

2011–05] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing and Immediate 

Effectiveness of Amendments to Rule 

A–15, on Notification To Board of 

Termination of Municipal Securities 

Activities and Change of Name or 

Address 

February 24, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

14, 2011, the Municipal Securities 

Rulemaking Board (‘‘Board’’ or ‘‘MSRB’’) 

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 

MSRB has filed the proposal as a ‘‘noncontroversial’’ rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act,3 and 

Rule 19b–4(f)(6) thereunder,4 which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The MSRB is filing a proposed rule 

change relating to the notification 

requirements in the event of a change in 

status of a broker, dealer, municipal 

securities dealer, or municipal advisor, 

consisting of amendments to Rule A–15, 

on Notification to Board of Termination 

of Municipal Securities Activities and 

Change of Name or Address. 

The text of the proposed rule change 

is available on the MSRB’s website at 

http://www.msrb.org/Rules-andInterpretations/SEC–Filings/2011– 

Filings.aspx, 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 Board 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 purposes of the proposed rule 

change are: (i) To extend the provisions 

of Rule A–15 to municipal advisors; and 

(ii) to expand the circumstances under 

which the MSRB must be notified to 

include: (A) a bar or suspension from 

engaging in municipal securities 

activities or municipal advisory 

activities by the appropriate regulatory 

agency, judicial authority, or otherwise; 

and (B) in the case of a broker, dealer, 

or municipal securities dealer, 

expulsion or suspension from 

membership or participation in a 

national securities exchange or 

registered securities association. 

Although existing Rule A–15 establishes 

a procedure for notification of a change 

in status with respect to brokers, dealers 

and municipal securities dealers, it does 

not apply to municipal advisors. 

Further, existing Rule A–15 does not 

provide for notification to the Board in 

the event of disbarment or suspension 

by regulatory agencies or judicial 

authorities or otherwise, or, with respect 

to brokers, dealers and municipal 

securities dealers, expulsion or 

suspension from membership or 

participation in a national securities 

exchange or registered securities 

association. The proposed rule change 

(i) adds municipal advisors to the 

entities subject to the rule; (ii) requires 

notification if (A) a broker, dealer, 

municipal securities dealer, or 

municipal advisor has been barred or 

suspended from engaging in municipal 

securities activities or municipal 

advisory activities by the appropriate 

regulatory agency, judicial authority or 

otherwise; and (B) if a broker, dealer or 

municipal securities dealer has been 

expelled or suspended from 

membership or participation in a 

national securities exchange or 

registered securities association. 

2. Statutory Basis 

The MSRB believes that the proposed 

rule change is consistent with Section 

15B(b)(2) of the Act, which provides 

that: 

The Board shall propose and adopt rules to 

effect the purposes of this title with respect 


emcdonald on DSK2BSOYB1PROD with NOTICES
11546 Federal Register / Vol. 76, No. 41 / Wednesday, March 2, 2011 / Notices 

5 15 U.S.C. 78s(b)(3)(A). 

6 In addition, Rule 19b–4(f)(6)(iii) requires a selfregulatory organization to give the Commission 

written notice of its intent to file the proposed rule 

change at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. 

7See Section 19(b)(3)(C) of the Act, 15 U.S.C. 

78s(b)(3)(C). 

to transactions in municipal securities 

effected by brokers, dealers, and municipal 

securities dealers and advice provided to or 

on behalf of municipal entities or obligated 

persons by brokers, dealers, municipal 

securities dealers, and municipal advisors 

with respect to municipal financial products, 

the issuance of municipal securities, and 

solicitations of municipal entities or 

obligated persons undertaken by brokers, 

dealers, municipal securities dealers, and 

municipal advisors; 

and, in particular, Section 15B(b)(2)(C) 

of the Act, which provides, in pertinent 

part, that MSRB rules shall: 

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 and municipal financial products, 

to remove impediments to and perfect the 

mechanism of a free and open market in 

municipal securities and municipal financial 

products, and, in general, to protect 

investors, municipal entities, obligated 

persons, and the public interest * * *. 

The proposed rule change is 

consistent with Section 15B(b)(2) and 

Section 15B(b)(2)(C) of the Act because 

it will assist the Board in monitoring 

which brokers, dealers, municipal 

securities dealers, and municipal 

advisors should no longer be listed as 

MSRB registrants and, accordingly, will 

aid investors, municipal entities, 

obligated persons, and the public in 

their choice of brokers, dealers, 

municipal securities dealers, and 

municipal advisors. 

Section 15B(2)(L)(iv) of the Act 

requires that rules adopted by the Board 

not impose a regulatory burden on small 

municipal advisors that is not necessary or 

appropriate in the public interest and for the 

protection of investors, municipal entities, 

and obligated persons, provided that there is 

robust protection of investors against fraud. 

The proposed rule change does not 

impose a regulatory burden on small 

municipal advisors that is not necessary 

or appropriate in the public interest and 

for the protection of investors, 

municipal entities, and obligated 

persons and for the robust protection of 

investors against fraud. Rule A–15, as 

amended by the proposed rule change, 

requires that municipal advisors submit 

a notice indicating their change in 

status. The MSRB expects that 

municipal advisors will need no more 

than 30 minutes to complete the 

notification required by the proposed 

rule change, and such notice may be 

submitted by email or fax, as well as by 

regular mail or overnight delivery 

service. The MSRB will have staff ready 

to assist municipal advisors should they 

have any questions. The proposed rule 

change does not impose any additional 

fee on municipal advisors but only 

requires payment of any amounts 

otherwise due and owing under other 

rules of the Board. Any burden on 

municipal advisors is de minimis. The 

proposed rule change is necessary to aid 

the Board in monitoring which brokers, 

dealers, municipal securities dealers, 

and municipal advisors should no 

longer be listed as MSRB registrants 

and, accordingly, will aid investors, 

municipal entities, obligated persons, 

and the public by providing information 

to inform their choice of broker, dealer, 

municipal securities dealer, or 

municipal advisor. 

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 not necessary or 

appropriate in furtherance of the 

purposes of the Act, since it would 

apply equally to all brokers, dealers, 

municipal securities dealers and 

municipal advisors. 

C. Self-Regulatory Organization’s 

Statement on Comments Received on 

the Proposed Rule Change by Members, 

Participants, or Others 

Written comments were neither 

solicited nor received on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The MSRB represented that the 

proposed rule change qualifies for 

immediate effectiveness pursuant to 

Section 19(b)(3)(A)(iii) of the Act 5

thereunder, because it: (i) Does not 

significantly affect the protection of 

investors or the public interest; (ii) does 

not impose any significant burden on 

competition; and (iii) does not become 

operative for 30 days after filing or such 

shorter time as the Commission may 

designate consistent with the protection 

of investors and the public interest.6

The MSRB provided the required 

written notice of its intention to file the 

proposed rule change to the 

Commission on February 3, 2011, and 

the proposed rule change will become 

operative on March 17, 2011, which is 

more than 30 days after the filing of the 

proposed rule change. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act.7

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 rulecomments@sec.gov. Please include File 

Number SR–MSRB–2011–05 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–MSRB–2011–05. 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 

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 Web site viewing and 

printing 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 MSRB’s offices. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 76, No. 41 / Wednesday, March 2, 2011 / Notices 11547 

8 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The SHORT subscription service became 

effective September 30, 2010. See Securities 

Exchange Act Release No. 34–62993, September 24, 

2010 (File No. SR–MSRB–2010–06). 

4See Securities Exchange Act Release No. 62755, 

August 20, 2010 (File No. SR–MSRB–2010–02). 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–MSRB–2011–05 and should 

be submitted on or before March 23, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4692 Filed 3–1–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63950; File No. SR–MSRB– 

2011–04] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing of Proposed 

Rule Change To Amend the MSRB 

Short-term Obligation Rate 

Transparency (‘‘SHORT’’) Subscription 

Service 

February 23, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

10, 2011, the Municipal Securities 

Rulemaking Board (‘‘MSRB’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

items I and II 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. 

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 to 

amend the MSRB’s Short-term 

Obligation Rate Transparency 

subscription service to provide 

subscribers with additional information 

as well as documents. The MSRB has 

requested that the proposed rule change 

be made effective on May 16, 2011. 

The text of the proposed rule change 

is available on the MSRB’s Web site at 

http://www.msrb.org/Rules-andInterpretations/SEC-Filings/2011- 

Fillings.aspx, 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 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The Short-term Obligation Rate 

Transparency (‘‘SHORT’’) System is a 

facility of the MSRB for the collection 

and dissemination of information about 

securities bearing interest at short-term 

rates. Rule G–34(c), on variable rate 

security market information, currently 

requires certain dealers to report to the 

SHORT System interest rates and 

descriptive information about Auction 

Rate Securities (‘‘ARS’’) and Variable 

Rate Demand Obligations (‘‘VRDOs’’). 

All reported information is 

disseminated from the SHORT System 

to subscribers pursuant to the MSRB 

SHORT subscription service 3 and is 

posted to the MSRB’s Electronic 

Municipal Market Access (‘‘EMMA’’) 

web portal pursuant to the EMMA shortterm obligation rate transparency 

service. 

On August 20, 2010, the Commission 

approved changes to Rule G–34(c) that 

will increase the information dealers are 

required to report to the SHORT System. 

This rule change will add to the SHORT 

System documents that define auction 

procedures and interest rate setting 

mechanisms for ARS and liquidity 

facilities for VRDOs, information about 

orders submitted for an ARS auction, 

and additional information about 

VRDOs.4 To provide subscribers with 

access to these additional items of 

information and documents, the 

proposed rule change would amend the 

SHORT subscription service to include 

the additional information and 

documents as well as an ARS ‘‘bid to 

cover’’ ratio that would be computed by 

the SHORT System. 

2. Statutory Basis 

The MSRB believes that the proposed 

rule change is consistent with Section 

15B(b)(2)(C) of the Exchange Act, which 

provides that the MSRB’s rules shall: 

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 and municipal financial products, 

to remove impediments to and perfect the 

mechanism of a free and open market in 

municipal securities and municipal financial 

products, and, in general, to protect 

investors, municipal entities, obligated 

persons, and the public interest. 

The MSRB believes that the proposed 

rule change is consistent with the Act. 

The amendments to the SHORT 

subscription service would serve as an 

additional mechanism by which the 

MSRB works toward removing 

impediments to and helping to perfect 

the mechanisms of a free and open 

market in municipal securities. The 

subscription service would make the 

additional information and documents 

collected by the SHORT System 

available to market participants for redissemination and for use in creating 

value-added products and services. 

Such re-dissemination and third-party 

use would provide market participants, 

including investors and the general 

public, additional avenues for obtaining 

the information collected by the SHORT 

System and would make additional 

tools available for making well-informed 

investment decisions. Broad access to 

the information and documents 

collected by the SHORT System, in 

addition to the public access through 

the EMMA web portal, should further 

assist in preventing fraudulent and 

manipulative acts and practices by 

improving the opportunity for public 

investors to access material information 

about Auction Rate Securities and 

Variable Rate Demand Obligations. 

Furthermore, broader redissemination and third-party use of the 

information and documents collected by 

the SHORT System should promote a 

more fair and efficient municipal 

securities market in which transactions 

are effected on the basis of material 

information available to all parties to 

such transactions, which should allow 

for fairer pricing of transactions based 

on a more complete understanding of 

the terms of the securities (including 

any changes thereto). 


emcdonald on DSK2BSOYB1PROD with NOTICES