[Federal Register Volume 62, Number 205 (Thursday, October 23, 1997)]
[Notices]
[Pages 55294-55295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28123]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39251; File No. SR-MSRB-97-06]
October 16, 1997.


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Municipal Securities 
Rulemaking Board Relating to Political Contributions and Prohibitions 
on Municipal Securities Business, Consultants, and Recordkeeping

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 30, 1997, the 
Municipal Securities Rulemaking Board (``Board'' or ``MSRB'') filed 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change (File No. SR-MSRB-97-6). The proposed rule 
change is described in Items I, II, and III below, which Items have 
been prepared by the Board. 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. Sec. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The MSRB is filing herewith a proposed rule change to rule G-37, on 
political contributions and prohibitions on municipal securities 
business, rule G-38, on consultants, and rule G-8, on recordkeeping 
(hereafter referred to as the ``proposed rule change''). The proposed 
rule change addresses the definitions of municipal finance professional 
and executive officer, and when Form G-37/G-38 is due to be filed with 
the Board.

II. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    In its filing with the Commission, the Board 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 
texts 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

    During the past year, the Board has received questions regarding 
certain technical aspects of rules G-37, G-38 and G-8. Specifically, 
these questions have been concerned with the definitions of municipal 
finance professional and executive officer, and when Form G-37/G-38 is 
due to be filed with the Board. The proposed rule change addresses 
these areas within the rules.
Definitions of Municipal Finance Professional and Executive Officer
    The Board believes that some dealers are improperly classifying, 
for rule G-37 purposes, certain individuals within their firms as 
executive officers when these individuals actually meet the definition 
of municipal finance professionals and should be classified as such. 
Contributions by executive officers must be recorded and reported but, 
unlike certain contributions by municipal finance professionals, would 
not cause a prohibition on municipal securities business. The 
definition of executive officer makes clear that municipal finance 
professionals cannot also be executive officers. To further underscore 
this point, the proposed rule change revises the name of the category 
of individuals currently referred to as ``executive officers'' to 
``non-MFP executive officers.'' This change in name should help dealers 
avoid any misunderstandings that a person who functions as a municipal 
finance professional cannot be classified, for purposes of rule G-37, 
as an executive officer.

Due Date for Form G-37/G-38 to be Filed With the Board

    Rules G-37 and G-38 state that Form G-37/G-38 must be submitted to 
the Board ``within thirty (30) calendar days after the end of each 
calendar quarter (these dates correspond to January 31, April 30, July 
31 and October 31).'' Because of the inconsistency in the language for 
those months with 31 days, the proposed rule change revises the rule 
language to require that the forms be sent ``by the last day of the 
month following the end of each calendar quarter.'' The forms do not 
have to be received by the Board by the last day of the month following 
the end of each calendar quarter, but the proposed rule change requires 
that dealers must have the forms on their way to the Board by the last 
day of the month following the end of each calendar quarter in order to 
be in compliance with the delivery requirements of the rules.
    The proposed rule change also contains non-substantive, technical 
rule language changes to make similar requirements consistent 
throughout the rules.
    The Board believes the proposed rule change is consistent with 
Section 15B(b)(2)(C) \2\ of the Act, which provides that the Board's 
rules shall:

    \2\ 15 U.S.C. Sec. 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.

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

    The Board 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.

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

    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 days 
prior to the filing date; and (iv) does not become operative for thirty 
(30) days from the date of its filing on September 30, 1997, the 
proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act and Rule 19b-4(e)(6) thereunder. In particular, 
the Commission believes the proposed rule change qualifies as a ``non-
controversial filing'' in that the proposed standards do not 
significantly affect the protection of investors or the public interest 
and do not impose any significant burden on competition, and because it 
makes technical clarifying changes to existing Board rule. 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

[[Page 55295]]

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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
Copies of the submissions, 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 persons, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. Sec. 552, will be available for inspection and copying in 
the Commission's Public Reference Room. Copies of the filing will also 
be available for inspection and copying at the Board's principal 
offices. All submissions should refer to File No. SR-MSRB-97-6 and 
should be submitted by November 13, 1997.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\3\
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    \3\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-28123 Filed 10-22-97; 8:45 am]
BILLING CODE 8010-01-M