89796 Federal Register / Vol. 88, No. 248 / Thursday, December 28, 2023 / Notices 

28 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 96930 (Feb. 15, 

2023), 88 FR 13872 at 13918 (Mar. 6, 2023) (File 

No. S7–05–22) (the ‘‘Commission T+1 Adopting 

Release’’). If the Commission’s compliance date 

were to change, the MSRB would issue a regulatory 

notice to modify the compliance date for the 

proposed rule change to remain aligned with the 

Commission’s revised compliance date. 

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 the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. 

All submissions should refer to file 

number SR–NYSE–2023–09 and should 

be submitted on or before January 18, 

2024. Rebuttal comments should be 

submitted by February 1, 2024. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.28

Christina Z. Milnor, 

Assistant Secretary. 

[FR Doc. 2023–28611 Filed 12–27–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

35080; File No. 812–15513] 

MainStay MacKay Municipal Income 

Opportunities Fund and New York Life 

Investment Management LLC 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’). 

ACTION: Notice. 

Notice of an application under section 

6(c) of the Investment Company Act of 

1940 (the ‘‘Act’’) for an exemption from 

sections 18(a)(2), 18(c) and 18(i) of the 

Act, under sections 6(c) and 23(c) of the 

Act for an exemption from rule 23c–3 

under the Act, and for an order pursuant 

to section 17(d) of the Act and rule 17d– 

1 under the Act. 

SUMMARY OF APPLICATION: Applicants 

request an order to permit certain 

registered closed-end investment 

companies to issue multiple classes of 

shares and to impose asset-based 

distribution and/or service fees and 

early withdrawal charges. 

APPLICANTS: MainStay MacKay 

Municipal Income Opportunities Fund 

and New York Life Investment 

Management LLC. 

FILING DATES: The application was filed 

on October 11, 2023, and amended on 

December 14, 2023. 

HEARING OR NOTIFICATION OF HEARING: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing on any application by 

emailing the SEC’s Secretary at 

Secretarys-Office@sec.gov and serving 

the Applicants with a copy of the 

request by email, if an email address is 

listed for the relevant Applicant below, 

or personally or by mail, if a physical 

address is listed for the relevant 

Applicant below. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on January 16, 2024, and 

should be accompanied by proof of 

service on the Applicants, in the form 

of an affidavit, or, for lawyers, a 

certificate of service. Pursuant to rule 0– 

5 under the Act, hearing requests should 

state the nature of the writer’s interest, 

any facts bearing upon the desirability 

of a hearing on the matter, the reason for 

the request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing the Commission’s Secretary. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: J. 

Kevin Gao, Esq., New York Life 

Investment Management LLC, 51 

Madison Avenue, New York, New York 

10010; with a copy to Thomas C. Bogle, 

Esq., and Corey F. Rose, Esq., 1900 K. 

Street NW, Washington, DC 20006. 

FOR FURTHER INFORMATION CONTACT: 

Trace W. Rakestraw, Senior Special 

Counsel, at (202) 551–6825 (Division of 

Investment Management, Chief 

Counsel’s Office). 

SUPPLEMENTARY INFORMATION: For 

Applicants’ representations, legal 

analysis, and conditions, please refer to 

Applicants’ application, dated 

December 14, 2023, which may be 

obtained via the Commission’s website 

by searching for the file number at the 

top of this document, or for an 

Applicant using the Company name 

search field on the SEC’s EDGAR 

system. 

The SEC’s EDGAR system may be 

searched at https://www.sec.gov/edgar/ 

searchedgar/legacy/ 

companysearch.html. You may also call 

the SEC’s Public Reference Room at 

(202) 551–8090. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Dated: December 22, 2023. 

Christina Z. Milnor, 

Assistant Secretary. 

[FR Doc. 2023–28671 Filed 12–27–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99226; File No. SR–MSRB– 

2023–07] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing of a Proposed 

Rule Change To Amend MSRB Rule G– 

12 To Promote the Completion of 

Allocations, Confirmations, and 

Affirmations by the End of Trade Date 

December 21, 2023. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on December 20, 2023, the Municipal 

Securities Rulemaking Board (‘‘MSRB’’ 

or ‘‘Board’’) 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 filed with the Commission 

a proposed rule change to amend MSRB 

Rule G–12 (‘‘Rule G–12’’), on uniform 

practice, to promote the completion of 

allocations, confirmations, and 

affirmations by the end of trade date for 

municipal securities transactions 

between brokers, dealers and municipal 

securities dealers and their institutional 

customers to facilitate the move to a 

settlement cycle of one business day 

(the ‘‘proposed rule change’’). 

The MSRB requests that the proposed 

rule change be approved with a 

compliance date of May 28, 2024, to 

align with the compliance date for 

amended Exchange Act Rule 15c6–1 

and new Exchange Act Rule 15c6–2, as 

described herein.3

The text of the proposed rule change 

is available on the MSRB’s website at 

https://msrb.org/2023-SEC-Filings, at 

the MSRB’s principal office, and at the 

Commission’s Public Reference Room. 


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4 17 CFR 240.15c6–2. 

5 Id. 

6 Id. 

7 17 CFR 240.15c6–1. 

8See Exchange Act Release No. 97585 (May 25, 

2023), 88 FR 35961 (June 1, 2023) (File No. SR– 

MSRB–2023–03). 9See Commission T+1 Adopting Release, 88 FR 

at 13890. 10See id. at 13947. 11 17 CFR 240.15c6–2. 12 17 CFR 240.15c6–2(a)(1). 

13 17 CFR 240.15c6–2(a)(2). 

14 17 CFR 240.15c6–2(b)(1–5). 

15See Commission T+1 Adopting Release, 88 FR 

at 13886. The term ‘‘confirmation’’ under proposed 

Rule G–12(k) refers to the operational message that 

includes trade details provided by the dealer to the 

customer to verify trade information so that a trade 

can be prepared for timely settlement. This is in 

contrast to trade confirmations required under Rule 

G–12(c) or MSRB Rule G–15(a), which list a series 

of disclosures that dealers are required to provide 

in writing to dealers or customers at or before 

completion of a transaction. 

16 Id. 

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 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The proposed rule change would 

amend Rule G–12 by adding a new 

section (k) to promote the completion of 

allocations, confirmations, and 

affirmations by the end of trade date for 

transactions in municipal securities 

between brokers, dealers and municipal 

securities dealers (‘‘dealers’’) and their 

institutional customers. This proposed 

rule change would align with the sameday allocation, confirmation, and 

affirmation process for equities and 

corporate bonds under Exchange Act 

Rule 15c6–2, as adopted.4 Although 

Exchange Act Rule 15c6–2, as adopted,5

does not apply to municipal securities 

transactions, the MSRB believes that the 

same-day allocation, confirmation, and 

affirmation process for municipal 

securities transactions in the secondary 

market should be consistent with that 

for equity and corporate bond 

transactions. This proposal is designed 

to facilitate the industry’s move to a 

settlement cycle of one business day 

(‘‘T+1’’) as described further below. To 

align with Exchange Act Rule 15c6–2, as 

adopted,6 the MSRB is proposing to 

amend Rule G–12 by adding a section 

(k) to require dealers effecting 

municipal securities transactions 

subject to the T+1 settlement cycle to 

either enter into written agreements as 

specified in the proposed rule change or 

establish, maintain, and enforce written 

policies and procedures reasonably 

designed to address certain objectives 

related to completing allocations, 

confirmations, and affirmations as soon 

as technologically practicable and no 

later than the end of trade date. 

Background 

On February 15, 2023, the 

Commission adopted amendments to 

Exchange Act Rule 15c6–1 (‘‘Amended 

Exchange Act Rule 15c6–1’’) 7 to shorten 

the settlement cycle of most equity and 

corporate bond transactions from two 

business days to T+1. In alignment with 

Amended Exchange Act Rule 15c6–1, 

the MSRB amended its Rule G– 

12(b)(ii)(B)–(D) and Rule G–15(b)(ii)(B)– 

(C) to define regular-way settlement as 

occurring on the first business day 

following the trade date rather than on 

the second business day following the 

trade date.8

In the Commission T+1 Adopting 

Release, the Commission stated that 

implementing a T+1 standard settlement 

cycle would require significant 

improvements in the current rates of 

same-day allocations, confirmations, 

and affirmations to help ensure timely 

settlement in a T+1 environment.9 In 

the Commission T+1 Adopting Release, 

the Commission proposed new 

Exchange Act Rule 15c6–2 to establish 

requirements that facilitate the 

completion of allocations, 

confirmations, and affirmations by the 

end of the trade date, helping to 

facilitate the settlement of institutional 

transactions in a T+1 or shorter standard 

settlement cycle by promoting the 

timely and orderly transmission of trade 

data necessary to achieve settlement.10

Exchange Act Rule 15c6–2 provides 

two options by which broker-dealers 

may comply with the rule, as adopted.11

The first option under Exchange Act 

Rule 15c6–2 provides that, where 

parties have agreed to engage in an 

allocation, confirmation, or affirmation 

process, a broker-dealer would be 

prohibited from effecting or entering 

into a contract for the purchase or sale 

of a security (other than an exempted 

security, a government security, a 

municipal security, commercial paper, 

bankers’ acceptances, or commercial 

bills) on behalf of a customer unless 

such broker-dealer has entered into a 

written agreement with the customer 

that requires the allocation, 

confirmation, affirmation, or any 

combination thereof, to be completed no 

later than the end of the day on trade 

date in such form as may be necessary 

to achieve settlement in compliance 

with Exchange Act Rule 15c6–1(a).12

The second option under Exchange Act 

Rule 15c6–2 provides an alternative 

where, in lieu of a written agreement, a 

broker-dealer may choose to establish, 

maintain, and enforce written policies 

and procedures reasonably designed to 

ensure the completion of the allocation, 

confirmation, affirmation, or any 

combination thereof, for the transaction 

as soon as technologically practicable 

and no later than the end of the day on 

trade date in such form as necessary to 

achieve settlement of the transaction.13

Exchange Act Rule 15c6–2 sets out 

several specific requirements for such 

written policies and procedures.14

Proposal 

The proposed amendments to Rule G– 

12 would add a new section (k) that 

would establish the core standard of 

same-day allocation, confirmation and 

affirmation for all regular-way 

transactions in municipal securities 

required to be settled on the first 

business day following the trade date 

under Rule G–12(b)(ii)(B) or MSRB Rule 

G–15(b)(ii)(B). Proposed Rule G–12(k)(i) 

refers to the terms ‘‘confirmation,’’ 

‘‘affirmation’’ and ‘‘allocation’’ as 

having the same meaning as used in the 

Securities Exchange Act Rule 15c6–2. 

For purposes of proposed Rule G–12(k), 

the terms ‘‘confirmation’’ and 

‘‘affirmation’’ refer to the transmission 

of messages among dealers, institutional 

investors, and custodian banks to 

confirm the terms of a trade executed for 

an institutional investor, a process 

necessary to ensure the accuracy of the 

trade being settled, consistent with how 

such terms are used in Exchange Act 

Rule 15c6–2.15 Additionally, the term 

‘‘allocation’’ refers to the process by 

which an institutional investor (often an 

investment adviser) allocates a large 

trade among various client accounts or 

determines how to apportion securities 

trades ordered contemporaneously on 

behalf of multiple funds or non-fund 

clients, consistent with how such term 

is used in Exchange Act Rule 15c6–2.16

Similar to Exchange Act Rule 15c6–2, 

proposed Rule G–12(k)(ii) would 

provide two options by which dealers 

would comply with the rule to meet the 


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17See id. at 13892. 

18See id. 

19See id. 

20See id. 

21See id. at 13891. 

22See id. at 13897. 

23See id. 

24See id. at 13894. 

25See id. at 13895. 

standard of same-day allocation, 

confirmation and affirmation for all 

regular-way transactions in municipal 

securities, also referred to as ‘‘same-day 

affirmation.’’ The first option under the 

newly added section (k)(ii)(A) to Rule 

G–12 would allow dealers to enter into 

a written agreement with the relevant 

parties to ensure completion of the 

allocation, confirmation, affirmation, or 

any combination thereof, for the 

transaction as soon as technologically 

practicable and no later than the end of 

the day on trade date in such form as 

necessary to achieve settlement of the 

transaction. 

The term ‘‘relevant parties’’ should be 

read more broadly than merely 

customers and would include, for 

example, investment advisers, 

custodians, or other agents to the extent 

that such parties would participate in 

the allocation, confirmation, and 

affirmation process.17 Similar to 

Exchange Act Rule 15c6–2, when 

entering into written agreements, the 

dealer would need to identify and enter 

into agreements with only the relevant 

parties that would have a role in 

completing the allocation, confirmation 

and affirmation process.18 If a dealer is 

acting in the capacity of an executing 

broker on behalf of a customer and 

another dealer is settling the transaction 

(i.e., as a clearing broker), then the 

executing broker would only comply 

with the rule to the extent that it 

participates in the allocation, 

confirmation and affirmation process. In 

such a scenario, the executing broker 

would ensure that its arrangements with 

the clearing broker identify that the 

clearing broker will be the dealer 

engaging in the allocation, confirmation, 

and affirmation process for compliance 

with the proposed rule change. To the 

extent that there is no such arrangement 

between the executing broker and the 

clearing broker, the executing broker 

should consider whether it needs to 

establish, implement, and maintain 

policies and procedures to identify and 

explain its role and relationship with 

the clearing broker.19 An executing 

broker that does not participate in 

allocation, confirmation, and 

affirmation processes would face no 

obligations under the proposed rule 

change.20 A dealer would not be 

deemed to have violated Rule G–12 as 

amended by the proposed rule change 

based on the actions of the counterparty 

(e.g., if an investment adviser fails to 

provide allocation information to the 

dealer as required under the agreement) 

as long as the written agreement 

describes the obligations of the parties 

to ensure the allocation, confirmation, 

or affirmation of the transaction, and the 

dealer itself has complied with its 

obligations under the written 

agreement.21

The MSRB believes that the term 

‘‘trade’’ and ‘‘end of the day on trade 

date’’ are widely used by the industry 

and sufficiently understood to facilitate 

compliance with the proposed rule 

change.22 The proposed rule change 

uses the term ‘‘end of the day on trade 

date’’ rather than requiring a specific 

time earlier than end of day to allow 

firms to maximize their internal 

processes to meet the appropriate cutoff 

times and other deadlines, as soon as 

technologically practicable. The MSRB 

believes that this would allow for the 

relevant parties to negotiate terms and 

expectations that are responsive to their 

specific operational arrangements and 

in turn facilitate the same-day 

allocation, confirmation and affirmation 

to further facilitate the timely settlement 

of the transaction.23

The second option to meet the core 

standard of same-day allocation, 

confirmation and affirmation is listed in 

the proposed amendment to Rule G–12 

under the newly added section (k)(ii)(B). 

Under this option, dealers would be 

required to establish, maintain, and 

enforce written policies and procedures 

reasonably designed to ensure 

completion of the allocation, 

confirmation and affirmation for the 

transaction as soon as technologically 

practicable and no later than the end of 

the day on trade date. At a minimum, 

the policies and procedures required 

under the proposed new section Rule 

G–12(k)(ii)(B) must: 

(A) Identify and describe any 

technology systems, operations, and 

processes that the dealer uses to 

coordinate with other relevant parties, 

including investment advisers and 

custodians, to ensure completion of the 

allocation, confirmation, or affirmation 

process for the transaction; 

(B) Set target time frames on trade 

date for completing the allocation, 

confirmation, and affirmation for the 

transaction; 

(C) Describe the procedures that the 

dealer will follow to ensure the prompt 

communication of trade information, 

investigate any discrepancies in trade 

information, and adjust trade 

information to help ensure that the 

allocation, confirmation, and 

affirmation can be completed by the 

target time frames on trade date; 

(D) Describe how the dealer plans to 

identify and address delays if another 

party, including an investment adviser 

or a custodian, is not promptly 

completing the allocation or affirmation 

for the transaction, or if the dealer 

experiences delays in promptly 

completing the confirmation; and 

(E) Measure, monitor, and document 

the rates of allocations, confirmations, 

and affirmations completed as soon as 

technologically practicable and no later 

than the end of the day on trade date. 

The policies and procedures 

alternative in proposed Rule G– 

12(k)(ii)(B) could help ensure that, 

when the parties to a transaction 

encounter obstacles that may prevent 

them from completing an allocation, 

confirmation, or affirmation on trade 

date, they have policies and procedures 

to navigate, address, and, when 

possible, mitigate or overcome such 

obstacles. For example, similar to 

Exchange Act Rule 15c6–2, reasonably 

designed policies and procedures 

generally could include robust 

compliance and monitoring systems; 

processes to escalate identified 

instances of noncompliance for 

remediation; procedures that designate 

responsibility to business line personnel 

for supervision of functions and 

persons; processes for escalating issues; 

processes for periodic review and 

testing of the adequacy and 

effectiveness of policies and procedures; 

and training on policies and 

procedures.24

Under proposed Rule G–12(k)(iii)(A), 

the policies and procedures should be 

reasonably designed to ensure that the 

dealer considers holistically the range of 

systems and tools it has available to 

facilitate the same-day affirmation 

objective, as well as the range of 

operations and processes that a dealer 

uses to facilitate same-day affirmations 

across different customer and 

commercial relationships.25 Similar to 

Exchange Act Rule 15c6–2, the MSRB 

believes that different processes may be 

necessary to facilitate same-day 

affirmations because certain 

transactions or customer types require 

different arrangements and a dealer may 

require different arrangements for a 

customer who engages directly with the 

dealer versus a customer whose 

investment adviser or custodian engages 

with the dealer on its behalf. Further, to 

be reasonably designed, dealers would 

need to categorize and assess the range 

of operational arrangements and 


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26See id. at 13895–13896. 

27See id. at 13896. 

28See id. 

29See id. 

30See id. 

31See id. 

32See id. 

33See id. 

34See id. at 13916. 

35See id. at 13918. 

36The compliance date for the MSRB’s 

amendments to Rule G–12(b)(ii)(B)–(D) and MSRB 

Rule G–15(b)(ii)(B)–(C) to transition to T+1 

settlement for regular-way municipal securities 

transactions would also be correspondingly 

modified to remain aligned with the Commission’s 

revised compliance date. See Exchange Act Release 

No. 97585 (May 25, 2023), 88 FR 35961 (June 1, 

2023) (File No. SR–MSRB–2023–03). 

37 15 U.S.C. 78o–4(b)(2). 

38 15 U.S.C. 78o–4(b)(2)(C). 

39 Id. 

processes that would be used to 

facilitate the same-day affirmation 

process across the full range of different 

customer and transaction types for 

which it offers services.26

The MSRB is aware that a dealer may 

not be able to complete the same-day 

affirmation process on the trade date 

with respect to every transaction it 

executes for every customer in every 

circumstance. Therefore, proposed Rule 

G–12(k)(iii)(B) requires that the policies 

and procedures should set target time 

frames for the range of transaction and 

customer types the dealer serves, as well 

as the range of systems and operational 

processes it might employ.27 Similar to 

the Commission, the MSRB believes that 

reasonably designed procedures would 

be able to categorize the range of 

transactions and customer relationships 

that a dealer has established and 

estimate the length of time it takes to 

complete each of the allocation, 

confirmation, and affirmation to set its 

target time frames.28 A dealer is 

required to enforce its policies and 

procedures, meaning that it is obligated 

to design its systems and commit the 

necessary resources to ensure that it can 

comply with its own policies and 

procedures under the proposed rule 

change.29

Proposed Rule G–12(k)(iii)(C) would 

require that policies and procedures lay 

out the ex ante steps that the dealer 

would take to promptly communicate 

trade information, as well as to 

investigate discrepancies and adjust 

trade information in response to 

information the dealer receives.30

Although target time frames will not 

always be met, and although 

affirmations will not always be 

complete on trade date, a dealer is 

required to enforce its policies and 

procedures to ensure that an action fully 

within the dealer’s own control is not 

preventing the completion of the 

allocation, confirmation, or affirmation 

for the transaction.31

Proposed Rule G–12(k)(iii)(D) would 

require that policies and procedures 

describe how the dealer plans to 

identify and address delays if another 

party, including an investment adviser 

or a custodian, is not promptly 

completing the allocation or affirmation 

for the transaction, or if the dealer 

experiences delays in promptly 

completing the confirmation. In 

addition, policies and procedures 

generally should identify the 

circumstances under which a dealer 

may experience delays in promptly 

completing the confirmation and what 

steps it would take to resolve the delays 

or any recurring problems.32

Finally, proposed Rule G–12(k)(iii)(E) 

would require that policies and 

procedures be reasonably designed to 

measure, monitor, and document the 

rates of allocations, confirmations, and 

affirmations completed within the target 

time frames established under proposed 

Rule G–12(k)(iii)(B), as well as the rates 

of allocations, confirmations, and 

affirmations completed as soon as 

technologically practicable and no later 

than the end of trade date.33 While 

proposed Rule G–12(k) does not require 

that same-day affirmation occur for 

every transaction that a dealer executes 

and settles, for policies and procedures 

to be effective, the dealer generally 

should use the metrics identified by 

proposed Rule G–12(k)(iii)(E) to assess 

how well its policies and procedures 

ensure the completion of same-day 

affirmation and update its policies and 

procedures over time with 

improvements. 

Compliance Date 

The compliance date of the proposed 

rule change will correspond with the 

industry’s transition to T+1 settlement 

consistent with the compliance date for 

amended Exchange Act Rule 15c6–1 34

and new Exchange Act Rule 15c6–2,35

which is currently scheduled for May 

28, 2024. If the Commission’s 

compliance date were to change, the 

MSRB would issue a regulatory notice 

to modify the compliance date of the 

proposed rule change to remain aligned 

with the Commission’s revised 

compliance date.36

2. Statutory Basis 

The MSRB believes that the proposed 

rule change is consistent with section 

15B(b)(2) of the Exchange Act,37 which 

provides that the MSRB shall propose 

and adopt rules to effect the purposes of 

the Exchange Act with respect to 

transactions in municipal securities 

effected by dealers and advice provided 

to or on behalf of municipal entities or 

obligated persons by 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 dealers 

and municipal advisors. 

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

Act 38 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 the proposed rule 

change is consistent with section 

15B(b)(2)(C) of the Exchange Act.39 The 

proposed rule change will foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in municipal securities by applying the 

same standard for same-day allocation, 

confirmation and affirmation 

established by the SEC to transactions in 

municipal securities. Fostering a 

consistent standard across asset classes 

of securities would continue to promote 

just and equitable principles of trade by 

facilitating compliance and reducing the 

risk of regulatory confusion that could 

result from an obligation to apply 

different standards for different asset 

classes of securities. 

Further, the proposed rule change 

would foster cooperation and 

coordination among regulators by 

having similar same-day allocation, 

confirmation and affirmation standards 

as the Commission. By providing a 

uniform standard for all types of brokerdealers engaging in equity securities, 

corporate bonds and/or municipal 

securities transactions, this alignment of 

the regulatory scheme will foster greater 

cooperation and coordination among the 

MSRB and the Commission and 

Financial Industry Regulatory 

Authority, as well as greater cooperation 

and coordination among the authorities 

that examine dealers for compliance 

with MSRB rules. 


khammond on DSKJM1Z7X2PROD with NOTICES
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40Commission T+1 Adopting Release, 88 FR at 

13897. 

41 15 U.S.C. 78o–4(b)(2)(C). 

42Policy on the Use of Economic Analysis in 

MSRB Rulemaking is available at http://msrb.org/ 

Rules-and-Interpretations/Economic-AnalysisPolicy.aspx. In evaluating whether there was any 

burden on competition that is not necessary or 

appropriate in furtherance of the purposes of the 

Exchange Act, the MSRB was guided by its 

principles that required the MSRB to consider costs 

and benefits of a rule change, its impact on capital 

formation and the main reasonable alternative 

regulatory approaches. 

43 15 U.S.C. 78o–4(b)(2)(C). 

44 Id. 

The MSRB believes that the proposed 

rule change will also foster cooperation 

with other market participants and 

assist in timely and orderly settlement 

of securities transactions, because many 

dealers will have relationships across 

multiple investment advisers, 

custodians, and other types of agents, 

and therefore could be instrumental in 

introducing better processes and 

procedures across a range of different 

relationships. These improvements to 

facilitate same-day allocations, 

confirmations, and affirmations can in 

turn facilitate an orderly and efficient 

transition to a T+1 settlement cycle. The 

proposed rule change would incentivize 

dealers to identify and deploy effective 

practices for achieving allocations, 

confirmations, and affirmations ex ante, 

thereby improving the rate of 

allocations, confirmations, and 

affirmations over time, which in turn 

can enhance the adoption of the 

industry’s move to T+1. 

Facilitation of a shorter settlement 

cycle would remove impediments to 

and perfect the mechanism of a free and 

open market in municipal securities by 

yielding long-term benefits of promoting 

an orderly settlement process and 

reducing the likelihood of exceptions or 

other processing errors that could lead 

to settlement failures.40 The proposed 

rule change would allow for agreements 

or policies and procedures to be in place 

that would give dealers means by which 

to address the obstacles in same-day 

affirmation, allocation, and 

confirmation processes which are 

instrumental in timely settlement of 

transactions. The sooner the parties can 

affirm the trade information for their 

transaction, the lower the likelihood of 

a settlement failure, which may give 

parties time to resolve any errors, 

improve processes over time and 

implement new technologies instead of 

‘‘just in time’’ solutions that can cause 

delays in timely settlement of 

transactions. This would foster 

continued improvements in 

institutional trade processing, further 

promote accuracy and efficiency, reduce 

the potential for settlement fails, and 

more generally, reduce the potential for 

operational risk, which would promote 

investor protection and the public 

interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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

Act 41 requires that MSRB rules not be 

designed to impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Exchange Act. The 

MSRB believes that the proposed rule 

change would not impose any 

unnecessary or inappropriate burden on 

competition, as the proposed rule 

change would apply a uniform standard 

for a same-day allocation, confirmation 

and affirmation for all transactions in 

municipal securities to align with the 

newly revised standard applicable to, 

among other securities, equity and 

corporate bond transactions under the 

amended Exchange Act Rule 15c6–2. In 

addition, the proposed rule change 

would be applied equally to all dealers. 

Therefore, the MSRB believes the 

proposed rule change would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Exchange Act. 

The MSRB was guided by the MSRB’s 

Policy on the Use of Economic Analysis 

in MSRB Rulemaking.42 In accordance 

with this policy, the MSRB has 

evaluated the potential impacts on 

competition of the proposed rule 

change. The proposed rule change 

would add a new section (k) to the rule 

that would establish a core-standard of 

a same-day allocation, confirmation and 

affirmation for all transactions in 

municipal securities. 

Although the proposed rule change 

would be applied equally to dealers, the 

MSRB acknowledges potential burdens 

for firms that only participate in the 

municipal securities market, and those 

firms likely have relatively smaller 

revenue bases than firms that also trade 

other securities. These firms may incur 

costs associated with system changes to 

achieve a ‘‘same-day affirmation,’’ and 

may be disproportionately impacted by 

changes that would require investments 

in working towards ensuring the sameday affirmation in that such costs would 

be borne solely by their municipal 

securities activities whereas other firms 

with a more diversified securities 

business likely would have already 

invested in the cost of coming into 

compliance with Exchange Act Rule 

15c6–2 across their business lines. 

However, the MSRB believes the 

proposed rule change would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Exchange Act,43

as any such regulatory burden would be 

necessary or appropriate to align with 

the newly revised standard applicable to 

other securities under the amended 

Exchange Act Rule 15c6–2 to facilitate 

compliance with the upcoming T+1 

settlement obligations. Without the 

proposed amendments, market 

participants would encounter different 

standards between municipal securities 

and other securities such as equity and 

corporate bonds, which could result in 

market inefficiencies and cause 

confusion, especially for investors who 

trade both municipal securities and 

other securities. Accordingly, the 

proposed rule change would be in the 

public interest and ultimately for the 

protection of investors, municipal 

entities, and obligated persons.44 In 

addition, dealers may encounter 

difficulty complying with the upcoming 

T+1 settlement obligations without the 

analogous Exchange Act Rule 15c6–2 

requirements that the proposed rule 

change would incorporate into Rule G– 

12. 

Benefits, Costs and Effect on 

Competition 

The MSRB considered the economic 

impact associated with the proposed 

rule change, relative to the baseline, 

which is the current Rule G–12 that 

does not align with Exchange Act Rule 

15c6–2 on same-day allocation, 

confirmation and affirmation, and 

assessed incremental changes in 

benefits and costs in the proposed 

future state of a same-day allocation, 

confirmation and affirmation process, in 

both cases in light of the already 

approved move to a T+1 settlement 

cycle in May 2024. 

Benefits 

The proposed rule change would 

facilitate compliance with the upcoming 

T+1 settlement obligations. The 

proposed rule change would help 

expedite the transmission and 

affirmation of trade data that is expected 

to enhance the accuracy and efficiency 

of institutional trade processing. The 

MSRB also expects that the same-day 

allocation, confirmation and affirmation 

standard would encourage the 

development of more standardized and 

automated dealer practices. While much 

of the industry has moved to a same-day 

allocation, confirmation and affirmation 

standard, the MSRB understands that 

there remain outliers who have not yet 

done so. By adopting a settlement 

process, either by agreement or 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 88, No. 248 / Thursday, December 28, 2023 / Notices 89801 

45See Commission T+1 Adopting Release, 88 FR 

at 13938. There is also a possibility that the 

industry would develop a standard written 

agreement for investors to complete and send to 

dealers over the longer term, but the MSRB is not 

aware of the possibility currently. 

46See id., 88 FR at 13946. The Commission 

estimated 411 broker-dealers would be subject to 

the requirements of Exchange Act Rule 15c6–2. Id. 

at 13939. The MSRB’s internal analysis assumes a 

cost saving of 50% for the one-time upfront cost for 

municipal securities only, as opposed to many 

other securities, such as equities, corporate bonds, 

asset-backed securities, mortgage-backed securities, 

and stock options, etc., accounting for some fixed 

costs when working on a single security product. 

For the ongoing cost, the MSRB estimated the 

number of trades for municipal securities would be 

less than 2% of trades for other securities. 

Conservatively, two percentage points are used for 

estimating the ongoing costs related to municipal 

securities. The MSRB believes these estimates 

reflect an upper bound on the compliance costs. 

strengthening existing policies and 

procedures, the MSRB believes that 

more institutional trades would be 

successfully processed and receive an 

affirmed confirmation on the same trade 

date. The proposed rule change for 

regular-way municipal securities 

transactions in the secondary market 

would be consistent with Exchange Act 

Rule 15c6–2, which applies to equity 

and corporate bond transactions. Market 

efficiencies could be eroded if market 

participants encounter differing 

allocation, confirmation and affirmation 

standards in settlement cycles when 

trading equity securities or corporate 

bonds along with municipal securities. 

Finally, the MSRB expects that an 

increase in same-day affirmation rates 

would help reduce the number of 

settlement failures as affirmations on 

the same-day can help mitigate the risk 

of errors. 

Costs 

The MSRB believes that some dealers 

would incur costs associated with 

systems changes to achieve a same-day 

allocation, confirmation and affirmation 

standard. For upfront costs, dealers 

would need to create written agreements 

for relevant parties and/or update 

existing policies and procedures. While 

firms may already have written 

agreements as part of their practices, 

firms would still need to review the 

existing policies and procedures 

framework to ensure their compliance 

with the proposed rule change. There 

would also be ongoing costs associated 

with compliance and recordkeeping in 

relation to the written policies and 

procedures and written agreements, 

including measuring and documenting 

the rate at which trades are meeting a 

same-day allocation, confirmation and 

affirmation standard. 

The T+1 settlement obligation is 

applicable to all firms regardless of how 

many asset classes they trade, and firms 

that only participate in the municipal 

securities market may be 

disproportionately impacted by changes 

that could require system or staffing 

investments in working towards 

ensuring a same-day allocation, 

confirmation and affirmation. This is in 

contrast to firms that participate in 

multiple asset classes, for which the 

incremental costs would be smaller or 

negligible as these firms are assumed to 

be in compliance with Exchange Act 

Rule 15c6–2 obligations for asset classes 

other than municipal securities (as of 

the effective date of those obligations). 

For the limited number of dealers who 

only trade municipal securities, the 

MSRB assumes these dealers would 

likely choose the second option of 

establishing policies and procedures to 

comply with the proposed rule change, 

as the first option of entering written 

agreements could generally be more 

costly unless a particular dealer already 

uses written agreements to manage their 

relationship with their customers.45 The 

MSRB estimates that one-time upfront 

costs for system upgrades and policy 

and procedure revisions would be 

approximately $44,440 per firm and that 

ongoing annual costs for compliance 

and recordkeeping would be 

approximately $3,448 per firm. This 

calculation is based on the 

Commission’s upper-bound estimates of 

$88,880 per firm for the one-time 

upfront cost and $172,416 per firm for 

the annual ongoing cost when including 

all securities, other than an exempted 

security (a government security, a 

municipal security, commercial paper, 

bankers’ acceptances, or commercial 

bills).46

Burden on Competition and Capital 

Formation 

The proposed rule change would 

promote regulatory consistency and 

market efficiency by adopting a 

consistent standard of completing the 

trade matching and affirmation process 

on the trade date for all securities and 

harmonizing with Exchange Act Rule 

15c6–2. The proposed rule change 

would also facilitate compliance with 

the upcoming T+1 settlement 

obligations. As a result, the MSRB 

believes that by providing a uniform 

standard across all asset classes the 

proposed rule change would foster 

capital formation. 

The proposed rule change would be 

applied equally to all dealers transacting 

in municipal securities. The MSRB 

assumes that firms that will be subject 

to newly adopted Exchange Act Rule 

15c6–2 would be equipped with the 

necessary technology and personnel for 

the completion of the allocation, 

confirmation and affirmation process on 

trade date as of the effective date of 

those obligations. For the remaining 

limited number of municipal dealers 

who only trade municipal securities, the 

estimated upfront costs would be 

relatively minor though necessary. 

Finally, the estimated annual ongoing 

costs would also be minor and would be 

proportional to each firm’s trading 

activities. Therefore, the MSRB believes 

any broader impact on competition in 

the municipal securities market is 

expected to be minor, and the proposed 

rule change would not impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Exchange Act. 

Reasonable Alternatives 

One alternative the MSRB considered 

was instead of requiring dealers to 

develop written agreements or to 

establish, implement and enforce 

policies and procedures as prescribed in 

proposed Rule G–12(k), the proposed 

rule change would require dealers to 

have adequate policies and procedures 

in place that can support allocation. 

This principle-based approach would 

allow dealers to customize their policies 

and procedures while still proceeding 

towards the ultimate goal of same-day 

allocation, confirmation and 

affirmation. However, while this 

alternative may provide dealers more 

flexibility, it does not necessarily 

guarantee achieving same-day 

allocation, confirmation and 

affirmation, and does not facilitate the 

adoption of ‘‘timely settlement.’’ For 

example, while this principle-based 

approach may accelerate the allocation, 

confirmation and affirmation process for 

dealers, it may not lead to a marketwide adoption of same-day allocation, 

confirmation and affirmation standard 

immediately without the prescriptive 

obligations specified in policies and 

procedures in the proposed rule change 

for all dealers. In any case, the proposed 

rule change would promote an orderly 

settlement process regardless of the 

length of the settlement cycle. 

Another alternative would be to 

provide only one option for dealers to 

achieve a same-day allocation, 

confirmation and affirmation, for 

example, by withdrawing the written 

agreement requirement and instead only 

requiring the policies and procedures 

approach. This alternative would allow 

dealers to adopt their own internal 

policies and procedures to ensure that 

allocations, confirmations, and 

affirmations are completed on a timeline 

that would facilitate settlement on T+1. 

However, this approach could be more 


khammond on DSKJM1Z7X2PROD with NOTICES
89802 Federal Register / Vol. 88, No. 248 / Thursday, December 28, 2023 / Notices 

47Exchange Act Release No. 97257 (Apr. 6, 2023), 

88 FR 22075 (Apr. 12, 2023) (File No. SR–MSRB– 

2023–03). 

48See Letter from Leslie M. Norwood, Managing 

Director and Associate General Counsel, Securities 

Industry and Financial Markets Association (May 3, 

2023), available at https://www.sec.gov/comments/ 

sr-msrb-2023-03/srmsrb202303-183739-336923.pdf. 

49See id. 50 17 CFR 200.30–3(a)(12). 

costly for certain dealers who may 

already have written agreements in 

place or would want to rely on written 

agreements over incurring compliance 

costs of establishing, implementing and 

enforcing policies and procedures. 

Thus, the MSRB has determined that the 

proposed rule change is superior to the 

potential alternative approaches because 

it would offer two options for dealers to 

work towards a same-day allocation, 

confirmation and affirmation standard, 

thereby facilitating a timely settlement. 

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 on the proposed 

rule change. However, in connection 

with the MSRB’s filing to adopt a T+1 

settlement process for municipal 

securities,47 one commenter expressed 

general support to have consistent rules 

for municipal securities with those for 

equities and corporate bonds whenever 

possible.48 Specifically, the commenter 

encouraged the MSRB to consider a rule 

consistent with Exchange Act Rule 

15c6–2, to improve the processing of 

institutional trades through new 

requirements for market participants 

related to same-day affirmations.49

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 of 

up to 90 days (i) as the Commission may 

designate 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 email to rule-comments@

sec.gov. Please include File Number SR– 

MSRB–2023–07 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–MSRB–2023–07. This file 

number should be included on the 

subject line if email 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 

internet website (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 website 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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the MSRB. Do not include 

personal identifiable information in 

submissions; you should submit only 

information that you wish to make 

available publicly. We may redact in 

part or withhold entirely from 

publication submitted material that is 

obscene or subject to copyright 

protection. All submissions should refer 

to File Number SR–MSRB–2023–07 and 

should be submitted on or before 

January 18, 2024. 

For the Commission, pursuant to delegated 

authority.50

Christina Z. Milnor, 

Assistant Secretary. 

[FR Doc. 2023–28612 Filed 12–27–23; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Data Collection Available for Public 

Comments 

AGENCY: Small Business Administration. 

ACTION: 60-Day notice and request for 

comments. 

SUMMARY: The Small Business 

Administration (SBA) intends to request 

approval from the Office of Management 

and Budget (OMB) for the collection of 

information described below. The 

Paperwork Reduction Act (PRA) 

requires federal agencies to publish a 

notice in the Federal Register 

concerning each proposed collection of 

information before submission to OMB 

and to allow 60 days for public 

comment in response to the notice. This 

notice complies with that requirement. 

DATES: Submit comments on or before 

February 26, 2024. 

Comments: Send all comments by 

email to Louis A. Cupp, New Markets 

Policy Analyst, Policy Division, Office 

of Investment and Innovation, Small 

Business Administration, louis.cupp@

sba.gov. 

FOR FURTHER INFORMATION CONTACT: Lyn 

Womack, Director, Fund Administration 

and Fund Accounting Division, Office 

of Investment and Innovation, 

lyn.womack@sba.gov, 202–205–2416, or 

Curtis B. Rich, Agency Clearance 

Officer, 202–205–7030, curtis.rich@

sba.gov. 

SUPPLEMENTARY INFORMATION: 

Applicants for SBA-guaranteed leverage 

commitments must complete these 

forms as part of the application process. 

SBA uses the information to make 

informed and proper credit decisions 

and to establish the SBIC’s eligibility for 

leverage and need for funds. 

Solicitation of Public Comments: 

SBA is requesting comments on (a) 

whether the collection of information is 

necessary for the agency to properly 

perform its functions; (b) whether the 

burden estimates are accurate; (c) 

whether there are ways to minimize the 

burden, including through the use of 

automated techniques or other forms of 

information technology; and (d) whether 

there are ways to enhance the quality, 

utility, and clarity of the information. 

Summary of Information Collection 

Collection: 3245–0081 

(1) Title: Form 25 LLGP Model 

Limited Liability General Partner 

Certificate, Form 25 PCGP Model 

Resolution SBIC organized as Corporate 

General Partnership, Form 25 PC Model 

Resolution SBIC organized as 


khammond on DSKJM1Z7X2PROD with NOTICES