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[Federal Register Volume 63, Number 14 (Thursday, January 22, 1998)]
[Notices]
[Pages 3367-3368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1423]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39546; File No. SR-MSRB-97-17]

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Municipal Securities 
Rulemaking Board Relating to Underwriting and Transaction Assessments

January 13, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on December 
23, 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-
97-17). 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.

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 A-13 on 
Underwriting and Transaction Assessments. The proposed rule change to 
rule A-13 would clarify that the fee currently assessed for inter-
dealer transactions reported to the Board will not automatically apply 
to customer transactions once they are reported under Board rule G-14. 
The text of the proposed rule change is below. Additions are in 
italics. Rule A-13 + Underwriting and Transaction Assessments for 
Brokers, Dealers and Municipal Securities Dealers.
    (a)-(b) No change.
    (c) Transaction Assessments. Each broker, dealer and municipal 
securities dealer shall pay to the Board a fee equal to .0005% ($.005 
per $1,000) of the total par value of inter-dealer municipal securities 
sales that it reports to the Board under rule G-14(b). For those 
transactions reported to the Board by a broker, dealer or municipal 
securities dealer on behalf of another broker, dealer or municipal 
securities dealer, the transaction fee shall be paid by the broker, 
dealer or municipal securities dealer that reported the transaction to 
the Board. Such broker, dealer or municipal securities dealer may then 
collect the transaction fee from the broker, dealer or municipal 
securities dealer on whose behalf the transaction was reported.
    (d)-(f) No change.

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

1. Purpose
    The Board currently assesses dealers a fee equal to .0005% of par 
value of the dealers' inter-dealer sales transactions in municipal 
securities, as reported to the Board under rule G-14(b). As indicated 
in Board rule filings and notices concerning the fee, this fee was 
intended to apply exclusively to inter-dealer transactions.\1\ Since 
the language of rule A-13 was written when inter-dealer transactions 
were the only transactions that were being reported to the Board, rule 
A-13(c) now simply states that the transaction assessment will apply to 
``municipal securities sales that [the dealer] reports to the Board 
under rule G-14.'' In its rule filings and notices on rule A-13(c), the 
Board stated its intent to add customer transactions to those reported 
under rule G-14(b). The Board also noted that, once customer 
transactions are reported to the Board under rule G-14, the Board would 
review the use of customer transaction activity as a means of assessing 
fees. The Board, however, did not intend that the fee set for inter-
dealer transactions would apply automatically to customer transactions 
that are reported under rule G-14.
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    \1\ See, e.g., SR-MSRB-95-13 and Commission Order of Approval, 
Securities Exchange Act Release No. 37197 (May 10, 1996).
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    The Board is in the process of implementing the customer 
transaction phase of the Transaction Reporting Program. This will 
result in dealer-customer transactions, as well as inter-dealer 
transactions, being reported to the Board under rule G-14(b), beginning 
in March 1998. To clarify that the current language of rule A-13(c) 
applies only to inter-dealer transactions, the proposed rule change 
simply adds the word ``inter-dealer'' to modify ``municipal securities 
sales.'' The Board continues to intend to review customer transaction 
activity, once it becomes available in the Transaction Reporting 
Program, as a means to more equitably assess fees.
2. Basis
    The Board believes the proposed rule change is consistent with 
Section 15B(b)(2)(J) of the Act, which provides that the Board's rules 
shall:

provide that each municipal securities broker and municipal 
securities dealer shall pay to the Board such reasonable fees and 
charges as may be necessary or appropriate to defray the costs and 
expenses of operating and administering the Board. Such rules shall 
specify the amount of such fees and charges.

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 since it would apply equally to 
all brokers, dealers and municipal securities dealers and is simply a 
technical change in rule language not affecting the effect or 
application of the rule.

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 proposed rule change is merely a technical correction 
of rule language, the Board has designated this proposed rule change as 
constituting a stated policy, practice, or interpretation with respect 
to the meaning, administration, or enforcement of an existing Board 
rule under Section

[[Page 3368]]

19(b)(3)(A) of the Act, which renders the proposed rule change 
effective upon receipt of this filing by the Commission. 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 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 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 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-97-17 and should be 
submitted by February 12, 1998.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-1423 Filed 1-21-98; 8:45 am]
BILLING CODE 8010-01-M
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