70756 Federal Register / Vol. 75, No. 222 / Thursday, November 18, 2010 / Notices 

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

2 17 CFR 240.19b–4. 

needing a sign language interpreter, 

should contact Mollie Matull at 

415.561.5300 prior to December 1, 2010. 

Time: The meeting will begin at 6:30 

p.m. on Wednesday, December 8, 2010. 

ADDRESSES: The meeting will be held at 

the Golden Gate Club, 135 Fisher Loop, 

Presidio of San Francisco. 

FOR FURTHER INFORMATION CONTACT: 

Karen Cook, General Counsel, the 

Presidio Trust, 34 Graham Street, P.O. 

Box 29052, San Francisco, California 

94129–0052, Telephone: 415.561.5300. 

Dated: November 12, 2010. 

Karen A. Cook, 

General Counsel. 

[FR Doc. 2010–29133 Filed 11–17–10; 8:45 am] 

BILLING CODE 4310–4R–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63309; File No. SR–MSRB– 

2010–16] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing of Amendments 

to Rule G–5, on Disciplinary Actions by 

Appropriate Regulatory Agencies, 

Remedial Notices by Registered 

Securities Associations; and Rule G– 

17, on Conduct of Municipal Securities 

Activities 

November 12, 2010. 

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 November 

1, 2010, 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 

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 consisting of amendments to 

Rule G–5, on disciplinary actions by 

appropriate regulatory agencies, and 

Rule G–17, the Board’s basic fair 

practice rule, to apply the rules to 

municipal advisors. The text of the 

proposed rule change is available on the 

MSRB’s Web site at http:// 

www.msrb.org/Rules-andInterpretations/SEC–Filings/2010– 

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 Section 

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–5 currently provides that 

brokers, dealers, and municipal 

securities dealers (‘‘dealers’’) may not 

engage in municipal securities activities 

in contravention of restrictions imposed 

on them by the Commission, a 

registered securities association, or 

another appropriate regulatory agency. 

The purposes of the portion of the 

proposed rule change consisting of 

amendments to Rule G–5 are to remove 

a reference to an outdated NASD rule 

and to provide that municipal advisors 

and their associated persons may not 

engage in the municipal advisory 

activities described in Section 

15B(e)(4)(A)(i) and (ii) of the Act in 

contravention of restrictions imposed 

upon them by the Commission. 

Rule G–17 currently provides that, in 

the conduct of its municipal securities 

activities, each dealer shall deal fairly 

with all persons and shall not engage in 

any deceptive, dishonest, or unfair 

practice. The purpose of the portion of 

the proposed rule change consisting of 

amendments to Rule G–17 is to apply 

the MSRB’s core fair dealing rule to 

municipal advisors in the same manner 

that it currently applies to dealers. 

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 

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. 

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

provides that the rules of the MSRB 

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) of the 

Act, because it provides that: (i) 

Municipal advisors shall deal fairly 

with all persons and not engage in any 

deceptive, dishonest, or unfair practice 

and (ii) municipal advisors and their 

associated persons shall not conduct the 

activities described in Section 

15B(e)(4)(A)(i) and (ii) of the Act in 

contravention of restrictions imposed 

upon them by the Commission. 

Section 15B(2)(L) 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 is 

necessary for the robust protection of 

investors against fraud. Many municipal 

advisors play a key role in the 

structuring of offerings of municipal 

securities and the preparation of 

offering documents used to market those 

securities to investors. In some cases, 

they advise on the appropriateness of 

derivatives entered into by municipal 

issuers, the effectiveness of which may 

have a substantial impact on the 

finances of those issuers. In other cases, 

they solicit public pension fund 

investment advisory business that, if not 

conducted according to the highest 

standards, may have a substantial effect 

on the finances of the State and local 

governments that control those funds. 

Investors, therefore, have a substantial 

interest in municipal advisors 

conducting their municipal advisory 

activities fairly, not engaging in 

fraudulent conduct, and not engaging in 

municipal advisory activities contrary to 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 222 / Thursday, November 18, 2010 / Notices 70757 

3 17 CFR 200.30–3(a)(12). 

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

2See Securities Exchange Act Release No. 62739 

(August 18, 2010), 75 FR 52380. 

3See letter from Steve Allread, Equity Trader, 

Cutter Company, to Commission, dated September 

10, 2010 (‘‘Cutter Letter’’); letter from Joan Conley, 

Senior Vice President and Corporate Secretary, 

Nasdaq OMX Group, Inc., to Elizabeth M. Murphy, 

Secretary, Commission, dated September 15, 2010 

(‘‘Nasdaq Letter’’); and letter from Manisha Kimmel, 

Executive Director, Financial Information Forum, to 

Elizabeth M. Murphy, Secretary, Commission, dated 

September 17, 2010 (‘‘FIF Letter’’). 

4See letter from Brant K. Brown, Associate 

General Counsel, FINRA, to Elizabeth M. Murphy, 

Secretary, Commission, dated October 28, 2010 

(‘‘FINRA Response’’). 

5As amended by SR–FINRA–2010–003, FINRA 

Rule 7410 defines an ‘‘OTC equity security’’ for 

purposes of the OATS Rules as an equity security 

that is not an NMS stock, except that the term does 

not include restricted equity securities and direct 

Continued 

disciplinary actions imposed by the 

SEC. 

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 municipal advisors. 

In particular, the MSRB believes that the 

amendments to Rule G–5 impose no 

regulatory burden on any municipal 

advisor because Section 15B(c) of the 

Act already permits the SEC to limit the 

activities of municipal advisors in the 

manner provided for in amended Rule 

G–5. Further, the MSRB believes that 

the amendment to Rule G–17 imposes 

no regulatory burden on any municipal 

advisor not necessary or appropriate in 

furtherance of the purposes of the Act 

since most municipal advisors already 

comport themselves in accordance with 

the standards of behavior required by 

Rule G–17 and no municipal advisor 

has a legitimate interest in engaging in 

behavior that is fraudulent or otherwise 

unfair. 

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. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 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 or disapprove 

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 rulecomments@sec.gov. Please include File 

Number SR–MSRB–2010–16 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–2010–16. 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 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–MSRB–2010–16 and should 

be submitted on or before December 9, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.3

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–29077 Filed 11–17–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63311; File No. SR–FINRA– 

2010–044] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change Relating to the 

Expansion of the Order Audit Trail 

System to All NMS Stocks 

November 12, 2010. 

I. Introduction 

On August 6, 2010, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) 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 a proposed rule change 

to amend its Order Audit Trail System 

rules to extend the recording and 

reporting requirements to all NMS 

stocks and to exclude certain firms that 

have limited trading activities. The 

proposed rule change was published for 

comment in the Federal Register on 

August 25, 2010.2 The Commission 

received three comment letters on the 

proposed rule change.3 FINRA 

responded to these comment letters in a 

letter dated October 28, 2010.4 This 

order approves the proposed rule 

change. 

II. Description of Proposal 

FINRA Rules 7410 through 7470 (the 

‘‘OATS Rules’’) impose obligations on 

FINRA members to record in electronic 

form and report to FINRA, on a daily 

basis, certain information with respect 

to orders originated, received, 

transmitted, modified, canceled, or 

executed by members in OTC equity 

securities and equity securities listed 

and traded on The Nasdaq Stock 

Market, Inc. (‘‘Nasdaq’’).5 This 

mstockstill on DSKH9S0YB1PROD with NOTICES