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###### Securities and Exchange Commission

          - [Release No. 34-42830; File No. SR-MSRB-00-7]

                    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1]                                          and Rule 19b-4 thereunder,[2]       ( print page 36190)                        notice is hereby given that on May 2, 2000, 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 Board has designated the proposed rule change as constituting a “non-controversial” rule change under paragraph (f)(6) of rule 19b-4 under the Act,[3]                                          which renders the proposal effective upon receipt of this filing by the Commission.[4]                                          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 Board has filed with the Commission a proposed rule change consisting of technical amendments to Rule A-3, on Board membership; Rule G-15, on confirmation, clearance and settlement of customer transactions with customers; rule G-17, on conduct of municipal securities business; and Rule G-18, on execution of transactions. The proposed rule change would become operative on June 1, 2000.

## 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 Board proposes to adopt technical amendments to Rules A-3, G-15, G-17, and G-18 for the purpose of making certain non-substantive changes. The proposed amendments to subsections (a)(i), (c)(ii) and (c)(iv) of Rule A-3 correct an unintended omission from the technical amendments (the “1999 Technical Amendments”),[5]                                          filed with and approved by the Commission last year, with respect to the definition of public representatives on the Board and its Nominating Committee. The proposed rule change is intended to make the rule language consistent with Section 15B(b)(1) of the Act.[6] 

The proposed changes to Rule G-15(d)(ii) make subsection and paragraph references consistent with the Board's general usage of such references throughout the rules.

                    The proposed amendments to Rule G-17 change certain terminology used in the rule from “municipal securities business” to “municipal securities activities” to avoid any ambiguity with the term “municipal securities business” as used in Rules G-37 and G-38. The Board represents that the term “municipal securities business” as used in Rules G-37 and G-38 has a specific limited definition, whereas Rule G-17 uses that term in a manner intended to include all of the municipal securities activities of the dealer or its associated persons.[7] 

                    The proposed amendment to Rule G-18 would delete a definition of “broker's broker” that pre-dated the Commission's definition of that term under Rule 15c3-1(a)(8)(ii) of the Act.[8]                                          Because the language used to define brokers' broker differs in the two definitions, the Board believes that it is possible that some ambiguity may exist as to whether the term is intended to cover the same universe of dealers under the general federal securities laws and Board rules. The Board represents that the deletion of this definition from Rule G-18 would eliminate this potential ambiguity.[9] 

#### 2. Statutory Basis

                    The Board believes that the proposed rule is consistent with Section 15B(b)(2)(C) of the Act.[10]                                          The Board further believes that the proposed rule change will ensure that existing rule provisions are accurate and understandable.                

### B. Self-Regulatory Organization's Statement on Burden on Competition

The Board represents that the proposed rule change will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, because 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

No written comments were solicited or received with respect to the proposed rule change.

## III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

                    Because the foregoing proposed rule change: (i) Does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; (iii) was provided to the Commission for its review at least five business days prior to the filing date; and (iv) does not become operative for 30 days after the date of its filing, the Board has submitted this proposed rule change, pursuant to Section 19(b)(3)(A) [11]                                          of the Act and Rule 19b-4(f)(6) [12]                                          thereunder, to become operative on June 1, 2000. At any time within sixty days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is                           ( print page 36191)                        necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.                

## 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. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 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 at the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the MSRB. All submissions should refer to File No. SR-MSRB-00-7 and should be submitted by June 28, 2000.

13

Margaret H. McFarland,

Deputy Secretary.

# Footnotes

1.                             15 U.S.C. 78s(b)(1).                    
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2.                             17 CFR 240.19b-4.                    
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3.                             17 CFT 240.19b-4(f)(6).                    
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4.                             Pursuant to Rule 19b-4(f)(6), the Board provided the required five-day advance notice to the Commission of its intent to file the proposed rule change. In the notice, the Board represented that the proposed rule change: (1) Will not significantly affect the protection of investors; (2) will not impose any significant burden on competition; and (3) will not become operative for thirty days after the date of this filing.                         *See*                         letter from Ernesto A. Lanza, Associate General Counsel, MSRB, to Katherine A. England, Assistant Director, Division of Market Regulation, Commission, dated April 25, 2000.                    
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5.                                                     *See*                         Securities Exchange Act Release No. 41528 (June 15, 1999), 64 FR 33334 (June 22, 1999).                    
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6.                             15 U.S.C. 78o-4(b)(1).                    
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7.                             The proposed changes to Rule G-17 are consistent with similar amendments made to Rules A-14, A-15, G-3 and G-27 in the 1999 Technical Amendments.                    
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8.                             17 CFR 240.15c3-1(a)(8)(ii).                    
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9.                             Rule D-1 provides that, unless the context otherwise specifically requires, the terms used in Board rules shall have the respective meanings set forth in the Act and the rules and regulations of the Commission thereunder. Thus, the deletion of the definition of brokers' broker from Rule G-18 would automatically result in this term having the same meaning as set forth under Rule 15c3-1(a)(8)(ii) of the Act.                    
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10.                             Section 15B(b)(2)(C) of the Act states in pertinent part that the rules of the Board “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, 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.” 15 U.S.C. 78o-4(b)(2)(C).                    
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11.                             15 U.S.C. 78s(b)(3)(A).                    
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12.                             17 CFR 240.19b-4(f)(6).                    
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13.                                 17 CFR 200.30-3(a)(12).                        
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[FR Doc. 00-14248 Filed 6-6-00; 8:45 am]

BILLING CODE 8010-01-M