56944 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Notices 

required between entry of multiple market-maker 

orders (including non-CBOE market-maker orders) 

on the same side of the market in an option class 

for an account or accounts of the same beneficial 

owner using Hybrid. This change went into effect 

on July 18, 2005 and was announced to the 

membership via Regulatory Circular RG05–61. 

8 15 U.S.C. 78a et seq. 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 52235 

(August 10, 2005) 70 FR 48214 (August 16, 2005) 

(the ‘‘Commission’s Notice’’). 

4See letter to Jonathan G. Katz, Secretary, 

Commission, from Terry L. Atkinson, Managing 

Director, UBS Financial Services Inc. (‘‘UBS’’), 

dated September 1, 2005 (‘‘UBS’ Letter’’); letter to 

Jonathan G. Katz, Secretary, Commission, from 

Leslie M. Norwood, Vice President and Assistant 

General Counsel, The Bond Market Association 

(‘‘BMA’’), dated September 2, 2005 (‘‘BMA’s 

Letter’’); letter to Jonathan G. Katz, Secretary, 

Commission, from Marc E. Elias and Rebecca H. 

Gordon, Perkins Coie, Counsel to the Democratic 

Senatorial Campaign Committee (‘‘DSCC’’), dated 

September 6, 2005 (‘‘DSCC’s Letter’’); and letter to 

Jonathan G. Katz, Secretary, Commission, from 

David M. Thompson, President, and Robert J. 

October 12, 2005, the Exchange 

proposes to extend the pilot program. 

Given the success of the pilot program 

in attracting market-maker volume to 

the Exchange, the Exchange proposes to 

extend the pilot program’s duration an 

additional year, until October 12, 2006. 

2. Statutory Basis 

The Exchange believes that the 

extension of the pilot program will 

allow the Exchange to continue to 

provide auto-ex access to all marketmakers. Accordingly, the Exchange 

believes the proposed rule change is 

consistent with the Act 8 and the rules 

and regulations under the Act 

applicable to a national securities 

exchange and, in particular, the 

requirements of Section 6(b) of the Act.9

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5)10 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts and, in general, to 

protect investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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 

The Exchange neither solicited nor 

received comments on the proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 11 and Rule 19b–4(f)(6) 

thereunder.12

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

the 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, 

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–CBOE–2005–70 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–9303. 

All submissions should refer to File 

Number SR–CBOE–2005–70. 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 

Internet 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 inspection and copying in 

the Commission’s Public Reference 

Room. Copies of the filing also will be 

available for inspection and copying at 

the principal office of the Exchange. 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–CBOE–2005–70 and should 

be submitted on or before October 20, 

2005. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–19498 Filed 9–28–05; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–52496, File No. SR–MSRB–

2005–12] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Order Approving Proposed 

Rule Change Concerning Solicitation 

and Coordination of Payments to 

Political Parties and Question and 

Answer Guidance on Supervisory 

Procedures Related to Rule G–37(d) on 

Indirect Violations 

September 22, 2005. 

On June 27, 2005, the Municipal 

Securities Rulemaking Board (‘‘MSRB’’

or ‘‘Board’’), 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 and Rule 19b–4 

thereunder,2 a proposed rule change 

consisting of an amendment to Rule G–

37(c), concerning solicitation and 

coordination of payments to political 

parties, and Q&A guidance on 

supervisory procedures related to Rule 

G–37(d), on indirect violations. The 

proposed rule change was published for 

comment in the Federal Register on 

August 16, 2005.3 The Commission 

received four comment letters regarding 

the proposal.4 On September 16, 2005, 

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Notices 56945 

Stracks, Counsel, Griffin, Kubik, Stephens & 

Thompson, Inc. (‘‘Griffin, Kubik’’), dated August 29, 

2005 (‘‘Griffin, Kubik’s Letter’’). 

5See letter from Carolyn Walsh, Senior Associate 

General Counsel, MSRB, to Martha M. Haines, 

Chief, Office of Municipal Securities, Commission, 

dated September 16, 2005 (‘‘MSRB’s First Response 

Letter’’). 

6See letter from Carolyn Walsh, Senior Associate 

General Counsel, MSRB, to Martha M. Haines, 

Chief, Office of Municipal Securities, Commission, 

dated September 21, 2005 (‘‘MSRB’s Second 

Response Letter’’). Griffin, Kubik’s Letter was 

provided to the MSRB after it had sent its First 

Response Letter. 

7Blount v. SEC, 61 F.3d 938 (D.C. Cir 1995), 

rehearing and suggestion for rehearing en banc 

denied (1995), certiorari denied by 517 U.S. 1119, 

116 S.Ct. 1351, 134 L.Ed.2d 520 (1996). 

8 Id., at 948. 

9 McConnell v. Federal Election Commission, 540 

U.S. 93, 124 S.Ct. 619 (Dec. 10, 2003). 

10See Securities Exchange Act Release No. 35446 

(SEC Order Approving Proposed Rule Change by 

the Municipal Securities Rulemaking Board 

Relating to Rule G–37 on Political Contributions 

and Prohibitions on Municipal Securities Business, 

and Rule G–8, on Recordkeeping) (March 6, 1995), 

60 FR 13496 (‘‘1995 SEC Approval Order’’). 

the MSRB filed a response to the 

comment letters from UBS, BMA and 

DSCC.5 On September 21, 2005, the 

MSRB filed a response to the comment 

letter from Griffin, Kubik.6 This order 

approves the proposed rule change. 

The proposed rule change would 

prohibit a dealer and certain municipal 

finance professionals (‘‘MFPs’’) from 

soliciting any person or PAC to make or 

coordinate a payment to a political party 

of a state or locality where the dealer is 

engaging or is seeking to engage in 

municipal securities business. In 

addition, the proposed Qs&As seek to 

provide dealers with more guidance as 

they develop procedures to ensure 

compliance with both the language and 

the spirit of Rule G–37. A full 

description of the proposal is contained 

in the Commission’s Notice. 

UBS, BMA and Griffin, Kubik stated 

in their comment letters that they fully 

support the elimination of pay-to-play 

practices in the municipal securities 

industry, but raised concerns about 

implementation of the proposal. DSCC 

expressed concern that the guidance 

presented in the MSRB’s proposed 

Questions and Answers may 

unnecessarily chill contributions to 

national party committees from MFPs 

and dealer-controlled PACs. 

Vagueness and First Amendment 

Concerns 

Both UBS and BMA stated that the 

proposed Qs&As are vague and do not 

provide clear, uniform standards as to 

when a contribution to a PAC or party 

committee results in an indirect 

violation. UBS and BMA also stated that 

the Qs&As represent an expansion of 

Rule G–37 because the Qs&As require 

that a broker-dealer have procedures in 

place to reasonably ensure that 

contributions to PACs and party 

committees do not result in indirect 

contributions to issuer officials, but 

provide no discernable standard as to 

when such indirect contribution would 

occur. BMA stated that the MSRB had 

previously established a safe harbor 

where a broker-dealer gets assurances 

from a party committee or PAC that the 

broker-dealer’s contribution will not be 

used for issuer officials (e.g., for 

housekeeping or conference accounts), 

and that this safe harbor conflicted with 

the proposal. Both UBS and BMA stated 

that the vagueness of the proposal will 

allow different firms to develop 

different supervisory procedures 

depending on their tolerance for risk. 

UBS and BMA further stated that 

creating a vague standard for 

contributing to PACs and party 

committees is unconstitutional, and that 

the due diligence suggested by the 

proposed Qs&As is troublesome under 

the First Amendment. Griffin, Kubik 

stated that they believe that Rule G–37 

is unconstitutional. 

The MSRB noted in its Response 

Letters that the commentators raised 

these concerns to the MSRB during its 

comment period on the proposed 

guidance, that the MSRB responded to 

these comments in its filing and that the 

Commission’s Notice addresses these 

issues at some length. The MSRB stated 

that the proposed Qs&As do not extend 

the reach of Rule G–37 or create a vague 

standard of regulation. The MSRB stated 

that the proposed guidance does not 

change the standard regarding when a 

payment to a political party or PAC 

could result in either a rule violation or 

a ban on doing business with a 

municipal issuer. The MSRB further 

stated that a violation of Rule G–37(d) 

still will only occur when the payment 

is made to other entities ‘‘as a means to 

circumvent the rule,’’ and that the 

standard enunciated in Rule G–37(d), 

which prohibits anyone from ‘‘directly 

or indirectly, through or by any other 

person or means’’ doing what sections 

(b) and (c) prohibit, is not 

unconstitutionally vague. 

The MSRB further stated that contrary 

to statements made in the 

commentators’ letters, this precise issue 

raised before the United States Court of 

Appeals in Blount v. SEC,7 and that the 

Court of Appeals in Blount directly 

rejected the challenge that Rule G–37(d) 

was too broad and could not regulate 

payments to parties and PACs when 

they are intended as end-runs around 

the direct contribution limits. In Blount, 

the Court stated: ‘‘Although the 

language of section (d) itself is very 

broad, the SEC has interpreted it as 

requiring a showing of culpable intent, 

that is, a demonstration that the conduct 

was undertaken ‘as a means to 

circumvent’ the requirements of (b) and 

(c) * * * The SEC states its ‘means to 

circumvent’ qualification in general 

terms. The qualification appears, 

therefore, to apply not only to such 

items as contributions made by the 

broker’s or dealer’s family members or 

employees, but also gifts by a broker to 

a state or national party committee, 

made with the knowledge that some 

part of the gift is likely to be transmitted 

to an official excluded by Rule G–37. In 

short, according to the SEC, the rule 

restricts such gifts and contributions 

only when they are intended as endruns around the direct contribution 

limitations.’’ 8

The MSRB further stated that the 

cases cited by BMA related to different 

issues and did not discredit the Blount 

Court’s ruling on this precise issue. In 

addition, the MSRB stated that the cases 

relied upon by BMA were decided prior 

to Blount as well as the Supreme Court’s 

decision in McConnell.9 Griffin, Kubik 

stated that the MSRB’s citations to 

Blount and McConnell were weak 

arguments, but did not cite any 

authority for their belief that Rule G–37 

is unconstitutional. 

The MSRB stated in its filing that it 

was issuing the proposed guidance to 

remind dealers of the need to have 

adequate supervisory procedures. The 

MSRB guidance makes suggestions 

concerning such procedures but does 

not require particular procedures. The 

MSRB stated that it is up to individual 

dealers to create procedures that are 

appropriate to their particular 

circumstances, and that broker-dealers 

generally do not have uniform 

supervisory procedures. 

The MSRB stated that it never 

intended for dealers to treat payments to 

administrative party accounts as a safe 

harbor and that payments to 

administrative-type accounts have 

always fallen within the rule’s 

regulatory ambit. The MSRB further 

stated that the SEC’s approval order of 

certain early amendments to Rule G–37 

clearly demonstrates that the MSRB 

never intended for dealers to treat 

payments to administrative party 

accounts as a safe harbor.10

In 1995, the MSRB filed and the SEC 

approved amendments to Rule G–37’s 

disclosure requirements to require 

dealers to record and report all 

payments to parties by dealers, PACs, 

56946 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Notices 

11 Id. at 13498. 

12MSRB Notice 2003–32 (August 6, 2003) at pp. 

1–2 (emphasis added). 

13See supra note 7. 

14See supra note 9. 

MFPs and executive officers regardless 

of whether those payments constitute 

contributions. In the 1995 SEC Approval 

Order, the SEC reiterated that the party 

payment disclosure requirements are 

intended to help ensure that dealers do 

not circumvent the prohibition on 

business in the rule by indirect 

contributions to issuer officials through 

payments to political parties. The SEC 

explained that the need for the language 

amendment was motivated by attempts 

by dealer and/or political parties to 

assert that contributions to 

administrative-type accounts did not 

fall within the rule’s regulatory ambit. 

In the 1995 SEC Approval Order, the 

SEC states: ‘‘Certain dealers and other 

industry participants have notified the 

MSRB that certain political parties 

currently are engaging in fundraising 

practices which, according to these 

political parties, do not invoke the 

application of rule G–37. For example, 

some of these entities currently are 

urging dealers to make payments to 

political parties earmarked for expenses 

other than political contributions (such 

as administrative expenses or voter 

registration drives). Since these 

payments would not constitute 

‘contributions’ under the rule, the 

recordkeeping and reporting provisions 

would not apply. The MSRB is 

concerned, based upon this information, 

that the same pay-to-play pressures that 

motivated the MSRB to adopt rule G–37 

may be emerging in connection with the 

fundraising practices of certain political 

parties described above.’’11

In addition, in August 2003, when the 

MSRB published a notice on indirect 

rule violations of Rule G–37, the MSRB 

referenced the 1995 SEC Approval 

Order and specifically stated that, ‘‘The 

party payment disclosure requirements 

were intended to assist in severing any 

connection between payments to 

political parties (even if earmarked for 

expenses other than political 

contributions) and the awarding of 

municipal securities business.’’ 12

The MSRB further stated that the 

commentators continued incorrect 

assertions about a ‘‘housekeeping’’ safe 

harbor only serve to illustrate the 

potential for real (or imagined) safe 

harbors to become dangerous loopholes 

as parties or PACs tailor their 

solicitations for contributions to the safe 

harbor’s parameters, and that, as noted 

in the MSRB’s proposed guidance, the 

need for dealers to adopt adequate 

written supervisory procedures to 

prevent indirect violations via 

‘‘housekeeping’’ type political party 

accounts is especially important in light 

of media and other reports that issuer 

agents have informed dealers and MFPs 

that, if they are prohibited from 

contributing directly to an issuer 

official’s campaign, they should 

contribute to an affiliate party’s 

‘‘housekeeping’’ account. 

National Party Committees and Federal 

Leadership PACs 

UBS and BMA requested that the 

MSRB expressly state that contributions 

made to a national party committee or 

federal leadership PAC be permitted 

under the proposed Qs&As as long as (1) 

the contribution was not solicited by an 

issuer official, and (2) the party 

committee or leadership PAC is not 

controlled by an issuer official. The 

DSCC stated that it is concerned that the 

guidance presented in the MSRB’s draft 

Questions and Answers may 

unnecessarily chill contributions to 

national party committees from MFPs 

and dealer-controlled PACs, and that 

contributions to national party 

committees do not present the ‘‘pay-toplay’’ concerns Rule G–37 was intended 

to address. These commentators are 

asking the MSRB to create a safe harbor 

for certain national party committees 

and federal leadership PACs. 

The MSRB responded that there is no 

evidence that the lack of a safe harbor 

for national party committees and 

federal leadership PACs has inhibited 

MFPs or dealers from contributing to 

such parties or PACs. The MSRB does 

not believe it is useful to provide ‘‘safe 

harbors’’ concerning parties or PACs 

such that a dealer or MFP could make 

payments to certain parties or PACs 

without investigating whether the 

payment is actually being made as a 

means to circumvent the requirements 

of Rule G–37. The MSRB stated that the 

Court of Appeals in Blount 13 expressly 

recognized that Rule G–37(d) was 

originally intended to prevent payments 

to both national and state parties used 

as a ‘‘means to circumvent’’ Rule G–37. 

UBS and BMA stated that when a 

contribution is not solicited by an issuer 

official and the party leadership PAC is 

not controlled by an issuer official the 

national party committees and federal 

leadership PACs cannot be used as a 

means to circumvent Rule G–37; the 

MSRB stated that such a position is 

inconsistent with public perception. 

The MSRB also stated that the Supreme 

Court’s recent decision in McConnell 14

emphasized the potential for payments 

to a political party to have undue 

influence on the actions of the elected 

officeholders belonging to the same 

party, and that McConnell upheld new 

federal statutory restrictions on soft 

money donations that were neither 

solicited by candidates nor used by the 

party to aid specific candidates. Given 

public perception and the Supreme 

Court’s pronouncements, the MSRB 

believes it is reasonable to require 

dealers to be responsible for having 

adequate supervisory procedures that 

obligate the dealer to exercise its 

judgment concerning whether 

contributions to any party or PAC are 

being made as a means to circumvent 

the provisions of Rule G–37. 

The Prohibition on Soliciting 

Contributions to State and Local Party 

Committees Should be Symmetrical to 

the Contributions Ban 

UBS stated that the Rule G–37(c) 

amendment should be symmetrical to 

the contributions ban because it is 

illogical to impose a greater prohibition 

on soliciting contributions than on 

making contributions. The MSRB 

responded that the proposed rule 

amendment is more limited than as 

portrayed by UBS. UBS stated that the 

amendment would completely prohibit 

MFPs from soliciting contributions to 

any state and local party committees 

when, in fact, it only prohibits 

solicitations by the dealer or certain 

MFPs for contributions to a political 

party of a state of locality where the 

dealer is engaging or is seeking to 

engage in municipal securities business. 

Thus, the MSRB believes that the 

proposed amendment is narrowly 

tailored to regulate only a dealer’s or 

certain MFP’s solicitation of other 

persons’ payments to political parties 

when there can be a perception that 

MFPs and dealers are soliciting others to 

make payments to parties or PACs as a 

means to circumvent the rule and the 

rule’s disclosure requirements. 

The MSRB determined that allowing 

dealers or certain MFPs to solicit other 

persons to make political party or PAC 

payments in states and localities where 

they are engaging or seeking to engage 

in municipal securities business creates 

at least the appearance of attempting to 

influence the awarding of municipal 

securities business through such 

payments. Moreover, without the 

proposed prohibition, it would be very 

difficult for enforcement agencies to 

detect such potential indirect violations 

because the parties solicited do not have 

to disclose the payments. Additionally, 

the MSRB believes that the arguably 

stricter prohibition can be justified 

because a violation of Rule G–37(c) does 

Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Notices 56947 

15 In approving this rule the Commission notes 

that it has considered the proposed rule’s impact on 

efficiency, competition and capital formation. 15 

U.S.C. 78c(f). 

16 15 U.S.C. 78o–4(b)(2)(C). 

17 Id. 

18 15 U.S.C. 78s(b)(2). 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(3). 

5 15 U.S.C. 78o–4(b)(2)(I). 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(3). 

not result in an automatic ban on 

business. 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to the MSRB15 and, in 

particular, the requirements of Section 

15B(b)(2)(C) of the Act and the rules and 

regulations thereunder.16 Section 

15B(b)(2)(C) of the Act requires, among 

other things, that the MSRB’s rules 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.17 In particular, the 

Commission finds that the proposed 

rule change is consistent with the Act 

because it will help inhibit practices 

that attempt, or create the appearance of 

attempting, to influence the awarding of 

municipal securities business through 

an indirect violation of Rule G–37. The 

Commission also finds that the Q&A 

guidance will facilitate dealer 

compliance with Rule G–27, on 

supervision, and Rule G–37(d)’s 

prohibitions on indirect rule violations. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,18 that the 

proposed rule change (SR–MSRB–2005–

12) be, and hereby is, approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.19

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–19497 Filed 9–28–05; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–52488; File No. SR–MSRB–

2005–14] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Amendment to 

Rule A–8(a), on Adoption of Proposed 

Rules and Submission to Commission 

September 21, 2005. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 12, 2005, the Municipal 

Securities Rulemaking Board (‘‘MSRB’’

or ‘‘Board’’), filed with the Securities 

and Exchange Commission 

(‘‘Commission’’ or ‘‘SEC’’) the proposed 

rule change as described in Items I, II 

and III below, which Items have been 

prepared by the MSRB. The MSRB has 

filed the proposal pursuant to Section 

19(b)(3)(A)(iii) of the Act,3 and Rule 

19b–4(f)(3) thereunder,4 which renders 

the proposal effective upon filing with 

the Commission. 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 with the 

Commission a proposed rule change 

consisting of an amendment to Rule A–

8(a), on adoption of proposed rules and 

submission to Commission. The text of 

the proposed rule change is available on 

the MSRB’s Web site (http:// 

www.msrb.org), 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 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 

In November 2004, the SEC’s 

Electronic Form 19b–4 Filing System 

became operative. Self-regulatory 

organizations are required to use this 

electronic filing system for submitting 

rule filings to the SEC instead of 

submitting paper filings. As part of the 

process for using this electronic filing 

system, the person submitting the filing 

is required to ‘‘sign’’ the filing with an 

electronic signature and such signature 

is associated with a particular computer. 

Due to the procedural steps involved in 

submitting filings to the SEC through its 

electronic system, the MSRB is revising 

Rule A–8(a) to delete the Chairman of 

the Board from the list of persons 

authorized to sign rule filings. Thus, 

rule filings will be signed by one of the 

staff members designated by the Board 

to perform this function. 

2. Statutory Basis 

The MSRB believes that the proposed 

rule change is consistent with Section 

15B(b)(2)(I) of the Act,5 which 

authorizes the MSRB to adopt rules that 

provide for the operation and 

administration of the MSRB. The 

proposed rule change is concerned 

solely with the operation and 

administration of the MSRB. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The MSRB does not believe that the 

proposed rule change will result in any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act since it only applies 

to the operation and administration of 

the MSRB. 

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 

The proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 6 and Rule 19b–4(f)(3) 

thereunder.7 At any time within 60 days 

of the filing of the proposed rule change, 

the Commission may summarily