30876 Federal Register / Vol. 75, No. 105 / Wednesday, June 2, 2010 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 60315 

(July 15, 2009), 74 FR 36294 (‘‘Original Notice’’) (the 

‘‘original proposed rule change’’). 

withhold shares of the Company’s 

common stock or purchase shares of the 

Company’s common stock from the 

Participants to satisfy tax withholding 

obligations related to the vesting of 

Restricted Stock and the exercise of 

options to purchase shares of the 

Company’s common stock granted 

pursuant to the Plans or the Amended 

Plans. The Amended Plans further 

provide the Company’s Board with 

discretion to permit the Participants to 

pay the exercise price of options to 

purchase shares of the Company’s stock 

with shares of the Company’s stock 

already held by such Participants or 

pursuant to net share settlement. 

Applicant’s Legal Analysis 

1. Section 23(c) of the Act, which is 

made applicable to BDCs by section 63 

of the Act, generally prohibits a BDC 

from purchasing any securities of which 

it is the issuer except in the open 

market, pursuant to tender offers or 

under other circumstances as the 

Commission may permit to ensure that 

the purchase is made on a basis that 

does not unfairly discriminate against 

any holders of the class or classes of 

securities to be purchased. Applicant 

states that the withholding or purchase 

of shares of Restricted Stock and 

common stock in payment of applicable 

withholding tax obligations or of 

common stock in payment for the 

exercise price of a stock option might be 

deemed to be purchases by the 

Company of its own securities within 

the meaning of section 23(c) and 

therefore prohibited by the Act. 

2. Section 23(c)(3) provides that the 

Commission may issue an order that 

would permit a BDC to repurchase its 

shares in circumstances in which the 

repurchase is made in a manner or on 

a basis that does not unfairly 

discriminate against any holders of the 

class or classes of securities to be 

purchased. Applicant states that it 

believes that the requested relief meets 

the standards of section 23(c)(3). 

3. Applicant states that these 

purchases will be made on a basis 

which does not unfairly discriminate 

against the stockholders of the Company 

because all purchases of the Company’s 

stock will be at the closing price of the 

common stock on the NASDAQ Global 

Select Market (or any other such 

exchange on which the shares may be 

traded in the future) on the date of the 

transaction. Applicant further states that 

no transactions will be conducted 

pursuant to the requested order on days 

where there are no reported market 

transactions involving the Company’s 

shares. Applicant submits that because 

all transactions would take place at the 

public market price for the Company’s 

common stock, the transactions would 

not be significantly different than could 

be achieved by any stockholder selling 

in a market transaction. 

4. Applicants submit that the 

proposed purchases do not raise 

concerns about preferential treatment of 

the Company’s insiders because the 

Amended Plans are bona fide 

compensation plans of the type that is 

common among corporations generally. 

Further, the vesting schedule is 

determined at the time of the initial 

grant of the Restricted Stock and the 

option exercise price is determined at 

the time of the initial grant of the 

options. Applicant represents that all 

purchases may be made only as 

permitted by the Amended Plans. 

Applicant argues that granting the 

requested relief would be consistent 

with policies underlying the provisions 

of the Act permitting the use of equity 

compensation as well as prior 

exemptive relief granted by the 

Commission for relief under section 

23(c) of the Act. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–13154 Filed 6–1–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, June 3, 2010 at 2 p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), (8), 9(B) and 

(10) and 17 CFR 200.402(a)(3), (5), (7), 

(8), 9(ii) and (10), permit consideration 

of the scheduled matters at the Closed 

Meeting. 

Commissioner Paredes, as duty 

officer, voted to consider the items 

listed for the Closed Meeting in a closed 

session. 

The subject matter of the Closed 

Meeting scheduled for Thursday, June 3, 

2010 will be: 

Institution and settlement of injunctive 

actions; 

Institution and settlement of 

administrative proceedings; 

A regulatory matter regarding a financial 

institution; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

Dated: May 27, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–13329 Filed 5–28–10; 4:15 pm] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62183, File No. SR–MSRB– 

2009–10] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing of Amendment 

No. 2 and Order Granting Accelerated 

Approval of Proposed Rule Change, as 

Modified by Amendment Nos. 1 and 2 

Thereto, Relating to Additional 

Voluntary Submissions by Issuers to 

the MSRB’s Electronic Municipal 

Market Access System (EMMA®) 

May 26, 2010. 

I. Introduction 

On July 14, 2009, the Municipal 

Securities Rulemaking Board (‘‘MSRB’’), 

filed with the Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’), 

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

Securities Exchange Act of 1934 

(‘‘Exchange Act’’),1 and Rule 19b–4 

thereunder,2 a proposed rule change 

relating to additional voluntary 

submissions by issuers to the MSRB’s 

Electronic Municipal Market Access 

System (‘‘EMMA’’). The proposed rule 

change was published for comment in 

the Federal Register on July 22, 2009.3

The Commission received 27 comment 


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4Copies of the comment letters received by the 

Commission are available on the Commission’s 

Internet Web site, located at http://www.sec.gov/ 

comments/sr-msrb-2009–10/msrb200910.shtml and 

for Web site viewing and printing in the 

Commission’s Public Reference Room at its 

Washington, DC headquarters. 5 15 U.S.C. 78s(b)(1). 

6 17 CFR 240.19b–4. 

7See Securities Exchange Act Release No. 61237 

(December 23, 2009), 75 FR 485 (January 5, 2010) 

(‘‘Amendment No. 1 Notice’’). 

8Exhibit A contains the citation key for all 

comment letters received on the proposed rule 

change and on Amendment No. 1. 

9 15 U.S.C. 78s(b)(1). 

10 17 CFR 240.19b–4. 

11Obligated persons would be permitted to 

submit primary market documents through the 

EMMA primary market disclosure service only if 

designated as an agent by the issuer. 

12The MSRB believes that posting of such presale documents without the related disclosure 

information provided in a preliminary official 

statement would be inconsistent with the core 

disclosure purposes of EMMA. 

13 In Amendment No. 1, the MSRB proposes to 

modify the original proposed rule change by 

eliminating one item of additional voluntary 

submissions relating to the award of the Certificate 

of Achievement for Excellence in Financial 

Reporting awarded by the Government Finance 

Officers Association (‘‘GFOA’’) in connection with 

the preparation of a Comprehensive Annual 

Financial Report (‘‘CAFR’’) of an issuer. The MSRB 

notes that CAFRs are already frequently submitted 

to EMMA by issuers, and in most cases the issuers 

include the GFOA certificate in the submitted 

CAFR. According to the MSRB, EMMA already 

effectively serves as a venue through which CAFRs 

and GFOA certificates are made available to 

investors. 

14 In response to the comments received on the 

original proposed rule change, the MSRB in 

Amendment No. 1 proposes to modify the original 

proposed rule change by permitting issuers and 

obligated persons to elect either the GASB standard 

or the FASB standard for GAAP, as appropriate. 

The original proposed rule change contemplated 

the use of the GASB standard only. 

15 In response to the comments received on the 

original proposed rule change, the MSRB in 

Amendment No. 1 proposes to modify the original 

proposed rule change by permitting issuers and 

obligated persons to elect to undertake to submit 

annual financial information either within 120 days 

or 150 days after the end of the fiscal year. The 

original proposed rule change contemplated a 120- 

day timeframe only. 

letters about the proposed rule change.4

On December 18, 2009, the MSRB filed 

with the Commission, pursuant to 

Section 19(b)(1) of the Exchange Act 5

and Rule 19b-4 thereunder,6

Amendment No. 1 to the proposed rule 

change. Amendment No. 1 to the 

proposed rule change was published for 

comment in the Federal Register on 

January 5, 2010.7 The Commission 

received three comment letters 

concerning Amendment No. 1.8 On May 

21, 2010, the MSRB filed with the 

Commission, pursuant to Section 

19(b)(1) of the Exchange Act 9 and Rule 

19b-4 thereunder,10 Amendment No. 2 

to the proposed rule change, which 

clarified an aspect of the proposed rule 

change relating to an issuer’s 

undertaking and requested an additional 

three months to develop, test, and 

implement the proposal. The text of 

Amendment No. 2 is available on the 

MSRB’s Web site (http://www.msrb.org), 

at the MSRB’s principal office, and for 

Web site viewing and printing in the 

Commission’s Public Reference Room. 

This order provides notice of 

Amendment No. 2 and approves the 

proposed rule change as modified by 

Amendment Nos. 1 and 2 on an 

accelerated basis. 

II. Description of the Proposed Rule 

Change, as Modified by Amendment 

Nos. 1 and 2 to the Proposed Rule 

Change 

Preliminary Official Statements and 

Other Primary Market Documents 

The proposed rule change would 

amend the EMMA primary market 

disclosure service to permit issuers and 

their designated agents to make 

voluntary submissions to the primary 

market disclosure service of official 

statements, preliminary official 

statements and related pre-sale 

documents, and advance refunding 

documents (collectively, ‘‘primary 

market documents’’).11 Pre-sale 

documents other than a preliminary 

official statement (including but not 

limited to notices of sale or 

supplemental disclosures) would be 

accepted only if accompanied or 

preceded by the preliminary official 

statement.12 An issuer seeking to make 

submissions of primary market 

documents to the EMMA primary 

market disclosure service would use the 

same accounts established with respect 

to submissions of continuing disclosure 

documents to the EMMA continuing 

disclosure service, subject to additional 

verification procedures to affirmatively 

establish the account holder’s authority 

to act on behalf of the issuer in 

connection with such primary market 

disclosure submissions. 

Submissions of primary market 

documents by issuers and their 

designated agents would be accepted on 

a voluntary basis if, at the time of 

submission, they are accompanied by 

information necessary to accurately 

identify: (i) The category of document 

being submitted; (ii) the issues or 

specific securities to which such 

document is related; and (iii) in the case 

of an advance refunding document, the 

specific securities being refunded 

pursuant thereto. The primary market 

documents and related indexing 

information would be displayed on the 

EMMA Web portal and also would be 

included in EMMA’s primary market 

disclosure subscription service. 

Additional Continuing Disclosure 

Submissions and Undertakings 

The proposed rule change also would 

amend the EMMA continuing disclosure 

service to permit issuers, obligated 

persons and their agents to make 

voluntary submissions to the continuing 

disclosure service of additional 

categories of disclosures, as well as 

information about their continuing 

disclosure undertakings. Such 

additional continuing disclosures and 

related indexing information would be 

displayed on the EMMA Web portal and 

also would be included in EMMA’s 

continuing disclosure subscription 

service. Such additional items 13 are: 

• An issuer’s or obligated person’s 

undertaking to prepare audited financial 

statements pursuant to generally 

accepted accounting principles 

(‘‘GAAP’’) as established by the 

Governmental Accounting Standards 

Board (‘‘GASB’’), or pursuant to GAAP 

as established by the Financial 

Accounting Standards Board (‘‘FASB’’), 

as applicable to such issuer or obligated 

person and as further described below 

(the ‘‘voluntary GAAP undertaking’’); 14

• An issuer’s or obligated persons’ 

undertaking to submit annual financial 

information to EMMA within 120 

calendar days after the end of the fiscal 

year or, as a transitional alternative that 

may be elected through December 31, 

2013, within 150 calendar days after the 

end of the applicable fiscal year, as 

further described below (the ‘‘voluntary 

annual filing undertaking’’); 15 and 

• Uniform resource locator (URL) of 

the issuer’s or obligated person’s 

Internet-based investor relations or 

other repository of financial/operating 

information. 

Voluntary GAAP Undertaking. The 

voluntary GAAP undertaking would 

consist of a voluntary undertaking by an 

issuer or obligated person, either at the 

time of a primary offering or at any time 

thereafter, that the issuer or obligated 

person will prepare its audited financial 

statements in accordance with GAAP. 

The MSRB contemplates that State or 

local governments or any other entities 

to which GASB standards are applicable 

would apply GAAP as established by 

GASB and that any other entities to 

which FASB standards are applicable 

would apply GAAP as established by 

FASB. 

The voluntary GAAP undertaking 

would assist investors and other market 

participants in understanding how 

audited financial statements were 

prepared. The fact that an issuer or 

obligated person has entered into a 

voluntary GAAP undertaking, and the 


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16According to the MSRB, under the Exchange 

Act, smaller public reporting companies, as nonaccelerated filers, generally are required to file their 

annual reports on Form 10–K with the Commission 

within 90 days after the end of their fiscal year. The 

MSRB States that the longer 120-day period 

included in the voluntary annual filing undertaking 

of the proposed rule change is designed to 

accommodate additional steps that State and local 

governments often must take—under state law, 

pursuant to their own requirements, or otherwise— 

in completing the work necessary to prepare their 

annual financial information as contemplated under 

Exchange Act Rule 15c2–12. 

17The MSRB states that the option to elect, 

through December 31, 2013, a transitional 150-day 

undertaking acknowledges that the 120-day 

undertaking may not be immediately achievable by 

most issuers and obligated persons, and is designed 

to provide a means by which to recognize issuers 

and obligated persons that are taking steps toward 

ultimately making their annual financial 

information available within 120 days of fiscal year 

end in the future. 

18See, e.g., Amendment No. 1 Notice at 486. 

19 ‘‘The MSRB contemplates that the making of a 

voluntary GAAP undertaking through EMMA by an 

issuer or obligated person would reflect the bona 

fide intent of the issuer or obligated person to 

perform as undertaken but would not, by itself, 

necessarily create a contractual obligation of such 

issuer or obligated person.’’ See Amendment No. 1 

Notice at 486. 

standard under which audited financial 

statements are to be prepared, would be 

prominently disclosed on the EMMA 

Web portal as a distinctive characteristic 

of the securities to which such 

undertaking applies. 

In Amendment No. 2, the MSRB 

proposes to clarify that the EMMA 

indicator with regard to the voluntary 

GAAP undertaking would be indicative 

of an issuer’s or obligated person’s 

voluntary undertaking, entered into as a 

contractual obligation, for the benefit of 

bondholders, under a continuing 

disclosure agreement or another 

contract, that it will prepare its audited 

financial statements in accordance with 

GAAP, either based on GASB or FASB 

standards as appropriate. If the issuer or 

obligated person later rescinds such 

undertaking through an amendment to 

its continuing disclosure agreement or 

other contractual arrangement, the 

issuer or obligated person would be 

expected to remove the indicator of its 

voluntary GAAP undertaking on 

EMMA. Amendment No. 2 clarifies that 

the voluntary EMMA GAAP indicator 

solely could be used in situations where 

the issuer has entered into an 

undertaking via a contractual obligation. 

While this is consistent with a number 

of statements in Amendment No. 1, 

there was a statement by the MSRB in 

Amendment No. 1 to the effect that the 

making of a voluntary GAAP 

undertaking through EMMA by an 

issuer or obligated person would reflect 

the bona fide intent of the issuer or 

obligated person to perform as 

undertaken but would not, by itself, 

necessarily create a contractual 

obligation of such issuer or obligated 

person. This statement may have caused 

some confusion with regard to the 

issuer’s need to undertake, in a 

continuing disclosure agreement or 

separate contract, that it will prepare its 

audited financial statements in 

accordance with GAAP, either based on 

GASB or FASB standards as appropriate 

in order to use the voluntary EMMA 

GAAP indicator. 

The MSRB would not review whether 

an entity has selected the appropriate 

accounting standard, would not review 

or confirm the conformity of submitted 

audited financial statements to GAAP, 

and would not review whether the 

information submitted by such entity to 

the EMMA continuing disclosure 

service regarding the voluntary GAAP 

undertaking accurately reflects the 

provisions of, or is included within, the 

continuing disclosure agreement or 

other contractual arrangement of such 

entity. 

Voluntary Annual Filing Undertaking. 

The voluntary annual filing undertaking 

would consist of a voluntary 

undertaking by an issuer or obligated 

person, either at the time of a primary 

offering or at any time thereafter, that 

the issuer or obligated person, as 

appropriate, would submit to EMMA its 

annual financial information as 

contemplated by Rule 15c2–12 under 

the Act by no later than 120 calendar 

days after the end of such issuer’s or 

obligated person’s fiscal year (the ‘‘120- 

day undertaking’’).16 Alternatively, to 

and including December 31, 2013, the 

EMMA continuing disclosure service 

would provide the option for an issuer 

or obligated person to indicate its 

undertaking to submit to EMMA its 

annual financial information by no later 

than 150 calendar days after the end of 

such issuer’s or obligated person’s fiscal 

year (the ‘‘transitional 150-day 

undertaking’’).17 An issuer or obligated 

person that has made a transitional 150- 

day undertaking could convert such 

election to a 120-day undertaking at any 

time. On and after January 1, 2014, the 

transitional 150-day undertaking option 

would no longer be available for 

selection. 

The voluntary annual filing 

undertaking would assist investors and 

other market participants in 

understanding when the annual 

financial information is expected to be 

available in the future. The fact that an 

issuer or obligated person has entered 

into a voluntary annual filing 

undertaking would be prominently 

disclosed on the EMMA Web portal as 

a distinctive characteristic of the 

securities to which such undertaking 

applies. A transitional 150-day 

undertaking would continue to be 

displayed on the EMMA Web portal 

through June 30, 2014, and would 

automatically cease to be displayed on 

the EMMA Web portal after such date, 

unless the issuer or obligated person has 

previously changed or rescinded such 

undertaking. 

Amendment No. 2 clarifies that the 

EMMA indicator with regard to the 

voluntary annual filing undertaking 

would be indicative of an issuer’s or 

obligated person’s voluntary 

undertaking, entered into as a 

contractual obligation, for the benefit of 

bondholders, under a continuing 

disclosure agreement or another 

contract, that it will submit to EMMA its 

annual financial information as 

contemplated under Rule 15c2–12 by no 

later than 120 calendar days (or 150 

calendar days, in the case of the 

transitional 150-day undertaking option) 

after the end of such issuer’s or 

obligated person’s fiscal year. If the 

issuer or obligated person later modifies 

the timeframe for submitting the annual 

financial information in its continuing 

disclosure agreement or other 

contractual arrangement to a period 

longer than contemplated by the 

voluntary annual filing undertaking, the 

issuer or obligated person would be 

expected to remove the indicator of its 

voluntary annual filing undertaking on 

EMMA. While Amendment No. 1 in 

several places clearly stated the MSRB’s 

view that such an undertaking would be 

contained in a continuing disclosure 

agreement or a separate contract,18 one 

statement in Amendment No. 1 may 

have caused some confusion.19

Amendment No. 2 thus clarifies that the 

voluntary EMMA indicator could be 

used solely in situations where an issuer 

had made such an undertaking as a 

contractual obligation (whether in a 

continuing disclosure agreement or in a 

separate contract). 

The MSRB would not review or 

confirm the compliance of an issuer or 

obligated person with its voluntary 

annual filing undertaking and would 

not review whether the information 

submitted by such entity to the EMMA 

continuing disclosure service regarding 

the voluntary annual filing undertaking 

accurately reflects the provisions of, or 

is included within, the continuing 

disclosure agreement or other 

contractual arrangement of such entity. 

Investor Relation URL Posting. The 

proposed rule change would permit 

issuers or obligated persons to post the 

URLs for their Internet-based investor 

relations or other repository of 


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20The Commission notes that continuing 

disclosure undertakings pursuant to Rule 15c2–12 

under the Exchange Act cannot be unilaterally 

rescinded or amended by either the issuer, an 

obligated person, or by any other party. See 

Securities Exchange Act Release No. 34961 

(November 10, 1994), 59 FR 59560 (November 17, 

1994); Letter from Robert L.D. Colby, Deputy 

Director, Division of Trading and Markets, 

Commission, to Securities Law and Disclosure 

Committee, National Association of Bond Lawyers, 

dated June 23, 1995 (Question 2). 

21See Original Notice. 

22 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition 

and capital formation. 15 U.S.C. 78c(f). 

23 15 U.S.C. 78o–4(b)(2)(C). 

24 Id. 

25The MSRB Letter indicated that it was filing an 

extension of time for the Commission to act. One 

commenter requested an extension of the comment 

period (Virginia GFOA Letter I). 

26See Michigan Letter, NAHEFFA Letter, 

Tennessee Letter, GFOA Letter I, Virginia GFOA 

Letter II, GFOA Letter II, Inland Letter, Rutherford 

Letter, Greendale Letter, Utah GFOA Letter, 

Brookfield Letter, Portland Letter, OMFOA Letter, 

Consortium Letter, Lower Merion Letter, Rock Hill 

Letter, NAST Letter, Rio Rancho Letter. 

27See ICI Letter, SIFMA Letter, Hinsdale Letter. 

28See, e.g. VGFOA Letter II, Inland Letter, 

Brookfield Letter, OMFOA Letter, Rock Hill Letter. 

29See, e.g. SIFMA Letter, NABL Letter, GFOA 

Letter II, Consortium Letter, NAST Letter. 

30See GFOA Letter III, Connecticut Letter II, 

NAIPFA Letter. 

financial/operating information, which 

would provide investors with an 

additional avenue for obtaining further 

financial, operating or other investmentrelated information about such issuer or 

obligated person. 

Manner of Submission. Issuers and 

obligated persons would indicate the 

existence of a voluntary GAAP 

undertaking or voluntary annual filing 

undertaking through a data input 

election on EMMA. Changes to or 

rescissions of such voluntary 

contractual undertakings could also be 

indicated through the same EMMA 

interface process.20

Effective Date of Proposed Rule Change 

The MSRB originally requested an 

effective date for the proposed rule 

change of a date to be announced by the 

MSRB in a notice published on the 

MSRB Web site, which date shall be no 

later than nine months after 

Commission approval of the proposed 

rule change and shall be announced no 

later than sixty (60) days prior to the 

effective date.21 In Amendment No. 2, 

the MSRB requested that the 

Commission approve a revised effective 

date for the proposed rule change of a 

date to be announced by the MSRB in 

a notice published on the MSRB Web 

site, which date shall be no later than 

one year after Commission approval of 

the proposed rule change and shall be 

announced no later than sixty (60) days 

prior to the effective date. 

III. Discussion and Commission 

Findings 

The Commission has carefully 

considered the proposed rule change, 

the comment letters received, and the 

MSRB’s responses to the comment 

letters and finds that the proposed rule 

change is consistent with the 

requirements of the Exchange Act and 

the rules and regulations thereunder 

applicable to the MSRB22 and, in 

particular, the requirements of Section 

15B(b)(2)(C) of the Exchange Act 23 and 

the rules and regulations thereunder. 

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

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.24 In particular, the Commission 

finds that the proposed rule change is 

consistent with the Exchange Act in that 

it serves to remove impediments to and 

help perfect the mechanisms of a free 

and open market in municipal securities 

and would serve to promote the 

statutory mandate of the MSRB to 

protect investors and the public interest. 

Voluntary dissemination of preliminary 

official statements through EMMA, 

particularly if made available prior to 

the sale of a primary offering to the 

underwriters, would provide timely 

access by investors and other market 

participants to key information useful in 

making an investment decision in a 

manner that is consistent with the 

Exchange Act. The voluntary GAAP 

undertaking would assist investors’ 

understanding of how such information 

was prepared and may provide them 

with the knowledge that the financial 

statements were prepared according to 

generally accepted accounting 

principles. The voluntary annual filing 

undertaking would assist investors’ 

understanding regarding when such 

information is expected to be available 

in the future and may encourage greater 

timeliness in the preparation and 

dissemination of municipal financial 

information. A URL provided by an 

issuer or obligated person would 

provide investors with an additional 

avenue for obtaining further financial, 

operating or other investment-related 

information about the issuer or 

obligated person. 

General Summary of Comment Letters 

The Commission received 27 

comment letters responding to the 

Original Notice and three comment 

letters responding to the Amendment 

No. 1 Notice. Two comment letters 

concerned procedural issues with the 

filing.25 Most of the remaining 25 

comment letters responding to the 

Original Notice generally supported the 

proposed rule change, except that most 

commenters believed that the 120-day 

voluntary annual filing undertaking 

would be too burdensome or not 

feasible.26 Several commenters, 

including a commenter representative of 

buyers of municipal securities, strongly 

supported the voluntary annual filing 

undertaking.27 Most commenters 

supported the proposals to submit 

voluntary information to EMMA, the 

voluntary GAAP undertaking and the 

issuer’s ability to post links to other 

sources of disclosure information,28

although some commenters raised 

concerns about various aspects of the 

proposals, suggested alternatives, or 

requested clarifications.29 As noted 

above, Amendment No. 1 proposed to 

add a transitional alternative of a 150- 

day voluntary filing deadline through 

December 31, 2013, to provide a means 

by which to recognize issuers and 

obligated persons for taking steps 

toward voluntarily making their annual 

financial information available within 

120 days of their fiscal year end. The 

three commenters who responded to the 

Amendment No. 1 Notice believed that 

the voluntary 150-day transitional 

alternative also was too burdensome 

and not achievable.30 On May 21, 2010, 

the MSRB submitted Amendment No. 2 

to the proposed rule change. The 

comment letters received regarding the 

Original Notice and the Amendment No. 

1 Notice, as set forth in Amendment 

Nos. 1 and 2, as well as the MSRB’s 

response to the comment letters, as set 

forth in Amendment Nos. 1 and 2, are 

more fully discussed below. 

Preliminary Official Statements and 

Other Primary Market Documents 

The proposal would amend the 

EMMA primary market disclosure 

service to permit issuers and their 

designated agents to make voluntary 

submissions to the primary market 

disclosure service of official statements, 

preliminary official statements and 

related pre-sale documents, and 

advance refunding documents. Pre-sale 

documents other than a preliminary 


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31See Virginia GFOA Letter II, Connecticut Letter 

I, ICI Letter, Brookfield Letter, OMFOA Letter, Rock 

Hill Letter, NAST Letter, NAIPFA Letter. 

32See Connecticut Letter I. 

33 Id. 

34See NABL Letter. 

35 Id. 

36See Amendment No. 1. 

37 Id. 

38 Id. 

39 Id. 

40See NABL Letter. 

41See NABL Letter, NAHEFFA Letter, 

Connecticut Letter I. 

42See NABL Letter. 

43See Michigan Letter, NAHEFFA Letter, 

Tennessee Letter, GFOA Letter I, Virginia GFOA 

Letter II, GFOA Letter II, Inland Letter, Rutherford 

Letter, Greendale Letter, Utah GFOA Letter, 

Brookfield Letter, Portland Letter, OMFOA Letter, 

Consortium Letter, Lower Merion Letter, Rock Hill 

Letter, NAST Letter, Rio Rancho Letter. 

44See Tennessee Letter, GFOA Letter I, GFOA 

Letter II, Inland Letter, Rutherford Letter, Portland 

Letter, OMFOA Letter, Consortium Letter. 

45See GFOA Letter II. 

46 Id. 

official statement (including but not 

limited to notices of sale or 

supplemental disclosures) would be 

accepted only if accompanied or 

preceded by the preliminary official 

statement. 

Most commenters who addressed the 

matter specifically supported the 

amendment of the EMMA primary 

market disclosure service to allow 

voluntary submissions.31 One 

commenter welcomed the expansion of 

the EMMA system to allow the 

voluntary submission of primary market 

documents because the expansion 

would allow issuers that offer their 

bonds through a competitive bidding 

process to be able to utilize the same 

distribution channels as issuers with 

offerings made on a negotiated basis.32

This commenter also suggested that the 

usefulness of the EMMA system would 

be enhanced by the ability to make and 

retrieve submissions identified in a 

manner other than by CUSIP numbers, 

such as by issuer.33

Only one commenter raised concerns 

about this aspect of the proposal.34 This 

commenter recommended that the 

submitters of primary disclosure 

documents continue to be restricted to 

underwriters and their agents except for 

submission of pre-sale documents 

prepared in connection with 

competitively sold municipal securities, 

in order to avoid the submission of 

duplicate or contradictory filings by 

underwriters and issuers or obligated 

persons.35

The MSRB addressed these comments 

in Amendment No. 1. The MSRB stated 

that it believes that there is considerable 

value in providing a means for 

centralized access to preliminary official 

statements at or prior to the time of the 

trade and in sufficient time for an 

investor to make use of the information 

in coming to an investment decision.36

The MSRB indicated that it expects to 

provide search capabilities tailored to 

the types of indexing information that 

would be available for preliminary 

official statements, including issuer 

name, issue description, State, and 

appropriate date ranges, among other 

things.37 Submissions made by issuers 

would be noted as such on the EMMA 

Web portal.38 The MSRB believed that 

postings of preliminary official 

statements by issuers should be 

available for any new issue, not just 

those sold on a competitive basis, and 

the EMMA primary market submission 

process would be designed to 

discourage duplicative submissions by 

issuers and underwriters.39 The 

Commission agrees that it is appropriate 

that postings of preliminary official 

statements by issuers be available for 

offerings sold on a negotiated as well as 

competitive basis, and believes that the 

MSRB has adequately addressed the 

commenters’ concerns and suggestions 

about duplicative filings and indexing. 

Additional Continuing Disclosure 

Submissions and Undertakings 

One commenter believed that all four 

of the proposed additional categories to 

the EMMA continuing disclosure 

service (the GASB–GAAP undertaking, 

the annual filing undertaking, the 

originally proposed GFOA–CAFR 

Certificate undertaking and the URL of 

the issuer’s or obligated person’s 

Internet-based investor relations or 

other repository of financial/operating 

information) were unnecessary because 

this feature of EMMA already contains 

a catch-all category that is broad enough 

to include any of the proposed 

categories.40 Several commenters 

expressed concern that the undertakings 

created by the proposal could lead to 

mistaken impressions by investors 

regarding the soundness or quality of 

the disclosures that either are or are not 

highlighted by these categories 41 and 

one commenter expressed concern that 

by prominently highlighting certain 

voluntary undertakings, the MSRB 

could be construed to have 

recommended the creditworthiness of 

the municipal securities.42 The MSRB 

indicated in Amendment No. 1 and in 

Amendment No. 2 that it will include 

explanations of the nature of both the 

voluntary annual filing undertaking and 

the voluntary GAAP undertaking on the 

EMMA Web portal. The Commission 

believes that users of the EMMA system 

will benefit from the additional 

disclosures provided by these 

undertakings and that concerns that the 

additional disclosures provided on 

EMMA could lead to erroneous 

impressions can be monitored by the 

Commission through its oversight of the 

MSRB. 

Voluntary Annual Filing Undertaking 

The original proposed rule change 

would amend the EMMA continuing 

disclosure service to permit issuers and 

obligated persons to undertake, on a 

voluntary basis, to submit annual 

financial information to EMMA within 

120 calendar days after the end of the 

fiscal year. This provision would consist 

of a voluntary undertaking by an issuer 

or obligated person, either at the time of 

a primary offering or at any time 

thereafter, that the issuer or obligated 

person, as appropriate, would submit to 

EMMA its annual financial information 

as contemplated under Rule 15c2–12 

(including audited financials, when and 

if available) by no later than 120 

calendar days after the end of such 

issuer’s or obligated person’s fiscal year. 

Most commenters, the majority of 

whom were representative of issuers or 

obligated persons, believed that the 120- 

day deadline for voluntary annual 

financial filings was too burdensome, 

arbitrary, unnecessary, harmful or not 

feasible,43 and many believed a majority 

of issuers could not meet this 

deadline.44 One commenter stated that 

often governments now struggle to meet 

the 180-day filing deadline to meet the 

requirements of the GFOA’s Certificate 

of Achievement Program, which 

promotes the preparation of 

comprehensive annual financial reports 

(CAFRs) that go beyond the 

requirements of GAAP.45 This 

commenter believed that promoting a 

120-day deadline might reasonably be 

expected to persuade any number of 

issuers to abandon a CAFR altogether in 

favor of a plain set of basic financial 

statements, which, in its view, would 

likely be harmful to the quality of 

financial reporting.46

Many commenters noted that external 

factors can inhibit the ability of issuers 

to complete annual financial reporting 

within 120 days, such as the need to 

obtain financial data from multiple 

component units, the need for outside 

governmental or governing body 

reviews of financial statements, required 

investment valuations by third parties, 

receipts and adjusting entries occurring 

after the close of the fiscal year, 

conflicts with State law and a limited 


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47See NAHEFFA Letter, Virginia GFOA Letter II, 

GFOA Letter II, Inland Letter, Utah GFOA Letter, 

Portland Letter, OMFOA Letter, Consortium Letter, 

Rock Hill Letter, NAST Letter, Rio Rancho Letter, 

GFOA Letter III, Connecticut Letter II. 

48See Inland Letter, Greendale Letter, Utah GFOA 

Letter. 

49See Virginia GFOA Letter II, GFOA Letter II, 

Portland Letter, OMFOA Letter. 

50See Brookfield Letter, Greendale Letter, Inland 

Letter, OMFOA Letter, Portland Letter, Rock Hill 

Letter, and Consortium Letter. 

51See GFOA Letter II, NAHEFFA Letter. 

52See GFOA Letter II. 

53See Inland Letter, Lower Merion Letter, 

Consortium Letter. 

54See GFOA Letter II, OMFOA Letter, 

Consortium Letter. 

55See GFOA Letter I, Consortium Letter. 

56See Rock Hill Letter, Consortium Letter, Inland 

Letter, GFOA Letter II. 

57See Rock Hill Letter. 

58 Id. 

59See Utah GFOA Letter, Portland Letter, 

OMFOA Letter, Tennessee Letter, Virginia GFOA 

Letter II, Inland Letter, OMFOA Letter, Consortium 

Letter, NAST Letter, Michigan Letter, Inland Letter, 

Rutherford Letter. 

60See Utah GFOA Letter, Portland Letter, 

OMFOA Letter. 

61See Tennessee Letter, Virginia GFOA Letter II, 

Inland Letter, OMFOA Letter, Consortium Letter, 

NAST Letter. 

62See Michigan Letter, Inland Letter, Rutherford 

Letter, Utah GFOA Letter, Portland Letter. 

63See Tennessee Letter, Virginia GFOA Letter II. 

64See Virginia GFOA Letter II. 

65See GFOA Letter II, NAHEFFA Letter. 

66See NAHEFFA Letter. 

67 Id. 

68See NAHEFFA Letter, Inland Letter. 

69See Brookfield Letter, Connecticut Letter I, 

Inland Letter, Consortium Letter, NAHEFFA Letter, 

NAST Letter, Connecticut Letter II, NAIPFA Letter. 

70See ICI Letter, SIFMA Letter, Hinsdale Letter. 

71See ICI Letter. 

72 Id. 

73See Hinsdale Letter. 

74See E-Certus Letter. 

number of auditing firms well qualified 

to complete governmental audits.47

Commenters also noted that many 

issuers have limited resources to 

prepare financial statements.48 Many 

commenters believed that the voluntary 

timeframe would increase costs and 

impose significant financial and 

personnel burdens while providing 

questionable benefits.49 Several 

commenters observed that small issuers 

may not be able to meet this timeframe 

and that small issuers often are given 

low priority by their auditors as 

compared to larger clients.50 Other 

commenters also noted the variances 

among issuers,51 including one 

commenter who stated that there could 

be unintended adverse consequences 

with respect to a ‘‘one-size-fits-all’’ 120- 

day deadline.52

Several commenters expressed 

concern that pressure to meet the 

voluntary deadline could cause 

professional staff and their auditors to 

produce less accurate information that 

would reduce the quality of financial 

reporting and auditing standards 53 and 

would lead to greater reliance on 

estimated financial data.54 Other 

commenters expressed concern that the 

120-day deadline would encourage 

governments to engage the services of 

auditing firms that are not well qualified 

in governmental accounting and 

auditing standards.55

Several commenters distinguished the 

municipal market from the corporate 

market; indicated that State and local 

governments surpass their private sector 

counterparts in financial reporting 

transparency; or stated that financial 

reporting goals applicable to the 

corporate market should not apply to 

the municipal market.56 One commenter 

stated that governments should not be 

under the same pressure to provide 

instantaneous and quarterly financial 

information because governments do 

not exist to make profits.57 This 

commenter also believed that there is no 

demand for quicker completion of 

governmental audits in the 

marketplace.58

A number of commenters addressed 

whether 120 days would be an 

appropriate number of days for the 

voluntary timeframe.59 Some 

commenters suggested that the 120-day 

timeframe be deleted altogether.60

Others noted that the 120-day standard 

would conflict with the 180-day 

standard used by GFOA in connection 

with its CAFR program,61 and some 

commenters stated that the 180-day 

standard is a more appropriate 

timeframe.62 Others suggested that 

additional studies be performed before a 

timeframe is selected.63 One commenter 

cited difficulties in simultaneously 

meeting GFOA’s CAFR timeframe and 

State law requirements.64 Two 

commenters recommended that issuers 

certify that they are making filings in 

compliance with their continuing 

disclosure agreements, without a 

specific deadline.65

Another commenter was concerned 

that issuers might engage in deceptive 

practices by highlighting an 

undertaking, but then failing to comply 

with it.66 This commenter noted that 

there appears to be nothing to preclude 

the issuer from effectively advertising 

the undertaking on EMMA irrespective 

of actual compliance.67 Others were 

concerned that a decision not to make 

an undertaking would create prejudicial 

and unjustified marketplace distinctions 

or ‘‘a figurative black eye in the mind of 

investors.’’ 68

A number of commenters expressed 

concern that the voluntary annual filing 

undertaking likely would become a de 

facto standard that issuers would feel 

compelled to meet, or that the voluntary 

standard would set the stage for 

mandating over time the proposed 120- 

day schedule.69

A few commenters supported the 120- 

day deadline or enhanced disclosure 

about the timeliness of issuer financial 

reporting.70 One commenter, the only 

commenter primarily representative of 

buyers of municipal securities, was 

particularly supportive of the proposed 

disclosure regarding an issuer’s decision 

to undertake submitting annual 

financial information to EMMA within 

120 calendar days after the end of the 

fiscal year, and also recommended the 

establishment of a meaningful, 

mandatory timeframe for filing financial 

reports.71 This commenter noted that 

disclosure of annual financial 

information currently can take 

anywhere from three months to twelve 

months, or even longer, and that the 

financial status of an issuer can change 

materially during the course of a year— 

a fact that it observed has been 

highlighted by the recent credit crisis.72

This commenter recognized that 

establishing a specific timeframe for 

filing financial reports after the end of 

the fiscal year would necessitate a 

significant shift in current practices 

employed by municipal issuers, but 

believed that such a change is not only 

warranted but also long overdue. 

Another commenter stated that ‘‘the 

proposed 120 day period for submitting 

annual financial information is a good 

start toward meeting the objective of 

making financial statements of 

governments timely and useful in the 

public securities market.’’ 73 A third 

commenter that supported this part of 

the proposal remarked that municipal 

securities issuers should have the same 

mandatory reporting requirement for 

timely financials as public 

corporations.74

In light of the commenters’ 

widespread concerns regarding the 

attainability of the 120-day timeframe, 

the MSRB in Amendment No. 1 

provided a transitional option for 

issuers and obligated persons to elect a 

150-day undertaking as an alternative to 

the 120-day undertaking. This 

alternative election is intended to 

provide issuers and obligated persons 

seeking to make the voluntary annual 

filing undertaking, but that are not 

currently able to meet a 120-day 

timeframe, with a reasonable 

opportunity to overcome existing 


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75See Exhibit A. 

76See GFOA Letter III, Connecticut Letter II, 

NAIPFA Letter. 77See GFOA Letter III, Connecticut Letter II. 78See NAIPFA Letter. 79See Amendment No. 2. 80 Id. 81 Id. 82 Id. 

83 Id. 

84 Id. 

85 Id. 

barriers to more rapid dissemination of 

financial information in an orderly and 

cost-effective manner. 

The MSRB accordingly modified the 

original proposed rule change to allow 

the election, through December 31, 

2013, of a transitional 150-day 

alternative, which election would be 

displayed on the EMMA Web portal 

through June 30, 2014, unless the issuer 

or obligated person changed or 

rescinded such undertaking. On and 

after January 1, 2014, the transitional 

150-day undertaking option no longer 

would be available. An issuer or 

obligated person that made a 

transitional 150-day undertaking could 

convert such election to a 120-day 

undertaking at any time. An issuer or 

obligated person that believed that it is 

able to meet the 120-day timeframe 

could make the 120-day undertaking 

immediately upon the effectiveness of 

the proposed rule change. The fact that 

an issuer or obligated person entered 

into such an undertaking, including the 

timeframe elected, would be 

prominently disclosed on the EMMA 

Web portal as a distinctive characteristic 

of the securities to which such 

undertaking applies. The EMMA Web 

portal would not include information 

regarding the availability or existence of 

the voluntary annual filing undertaking 

in those cases where an issuer or 

obligated person did not make a 

voluntary annual filing undertaking. 

The MSRB reiterated in Amendment 

No. 1 that the voluntary annual filing 

undertaking would in fact be voluntary. 

The MSRB would include an 

explanation of the nature of the 

voluntary annual filing undertaking on 

the EMMA Web portal. In particular, the 

MSRB would disclose that the voluntary 

annual filing undertaking is voluntary; 

is solely indicative of the timing by 

which the annual financial information 

is intended to be made available; and is 

not indicative of the accuracy or 

completeness of the annual financial 

information or of the financial health of 

the issuer or obligated person. Further, 

the MSRB would disclose that a 

decision by an issuer or obligated 

person not to make such an undertaking 

would not raise a negative inference 

with regard to the accuracy or 

completeness of the issuer’s or obligated 

person’s annual financial information or 

of the financial health of the issuer or 

obligated person. 

As previously noted, the Commission 

received three comment letters in 

response to the Amendment No. 1 

Notice.75 The three commenters 

responding to the Amendment No. 1 

Notice believed that the voluntary 150- 

day transitional alternative also was too 

burdensome and not achievable.76 Two 

of the commenters reiterated and 

expanded upon comments they had 

made previously with respect to the 

original proposed rule change.77 The 

third commenter stated that the 

established GASB and FASB 

requirements for preparing the audited 

statements are a significant impediment 

to developing statements in less than 

180 days.78

The MSRB addressed the issues raised 

by the comment letters on the original 

proposed rule change in Amendment 

No. 1, and addressed the comments on 

the original proposed rule change as 

well as the comments on the 

Amendment No. 1 Notice in 

Amendment No. 2. 

In Amendment No. 2, the MSRB 

stated that the determination to 

establish 120 days as the timeframe in 

the original proposed rule change was 

not arbitrary.79 The MSRB indicated 

that, under the Federal securities laws, 

smaller public reporting companies, as 

non-accelerated filers, generally are 

required to file their annual reports on 

Form 10–K with the Commission within 

90 days after the end of their fiscal 

year.80

The MSRB stated that, after 

consulting with Commission staff, it 

believed that providing issuers and 

obligated persons with 120 days to 

voluntarily submit annual financial 

information for purposes of the 

undertaking would provide an ample 

timeframe to accommodate the 

additional steps that State and local 

governments often must take—under 

State law, pursuant to their own 

requirements, or otherwise—in 

completing the work necessary to 

prepare their annual financial 

information as contemplated under Rule 

15c2–12.81 The MSRB noted that the 

alternative 150-day timeframe was 

added in Amendment No. 1 to provide 

additional time for undertaking such 

steps during a transitional period in 

response to concerns that, as State and 

local governments currently prepare 

their financial information, the 

additional 30 days beyond the Form 10– 

K timeframe for non-accelerated filers 

would not be sufficient for many 

municipal issuers.82 The MSRB stated 

that the timeframe provided for under 

the proposed rule change, as amended, 

is appropriate and was arrived at on a 

rational basis.83

According to the MSRB, issuers that 

seek to make their financial information 

available under the voluntary annual 

filing undertaking also would be 

bringing the timing of their disclosures 

into closer conformity with the 

timeframes that investors in the 

registered securities market have come 

to rely upon.84 The MSRB noted that 

recent experiences of issuers who have 

begun to issue Build America Bonds 

that are marketed at least in part to 

investors who typically did not 

purchase municipal securities suggest 

that important benefits both to investors 

and issuers may be realized from 

moving toward a more universal 

disclosure timeframe.85

The MSRB in Amendment No. 2 also 

recognized the voluntary nature of the 

annual filing undertaking in responding 

to concerns that the undertaking would 

be impracticable or impossible and does 

not take into account variances in the 

size and complexities of issuers. The 

MSRB stated that it is aware that the 

nature of municipal issuers varies 

widely and that these significant 

differences may in fact make it more 

difficult for some types of issuers, or 

issuers in certain States, or issuers 

facing certain sets of facts and 

circumstances, to make and comply 

with the voluntary undertaking. In this 

regard, the MSRB noted that some 

issuers may be separate and distinct 

units in governmental structures that 

require information from third parties to 

complete their audited financial 

statements, and such third parties may 

operate under timeframes that differ 

from the issuers’ own fiscal year cycles, 

thereby creating additional barriers to 

meeting the timeframe of the voluntary 

undertaking. 

Given this complex variety of issuer 

types, the MSRB believed that a single 

consistent voluntary submission 

timeframe available to all issuers 

provides an appropriately uniform 

initial target under the voluntary annual 

filing undertaking. The MSRB did not 

attempt to parse the essential structure 

of the marketplace to develop numerous 

separate timeframes based on very 

limited information. After a period of 

experience with the uniform timeframe 

of the undertaking, the MSRB advised 

that it could revisit the question of 

whether multiple timeframes for 

different types of issuers would be 

appropriate. 


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86See Amendment No. 2. 87 Id. 88 Id. 89 Id. 90 Id. 91 Id. 92 Id. 93 Id. 94 Id. 

95 Id. 

96 Id. 

97 Id. 

98 Id. See Securities Exchange Act Release Nos. 

60314 (July 15, 2009), 74 FR 36300 (July 22, 2009) 

and 61238 (December 23, 2009), 75 FR 492 (January 

5, 2010) (File No. SR–MSRB–2009–09). 

99See Amendment No. 2. 

100 Id. 

101 Id. 

102See Securities Exchange Act Release No. 

62182 (May 26, 2010) (SR–MSRB–2009–09). 

103See Amendment No. 2. 

In Amendment No. 2, the MSRB also 

addressed concerns of some 

commenters that the existence of the 

annual filing undertaking could create 

negative perceptions of issuers that do 

not make the voluntary undertaking and 

thereby create a two-tiered market.86

The MSRB stated that, in its view, the 

decision by an issuer not to submit 

annual financial information under the 

voluntary annual filing undertaking 

would not, by itself, cause an 

inappropriate negative perception of 

such issuer.87 According to the MSRB, 

the EMMA portal would provide clear 

disclosure of the purpose of the 

voluntary undertaking and that the 

undertaking should not be viewed as 

indicative of the accuracy or 

completeness of financial information or 

of the financial health of the issuer.88

Thus, the MSRB noted, the voluntary 

undertaking as disclosed on the EMMA 

portal would be an accurate 

representation of an issuer’s affirmative 

undertaking as to the timing of its 

disclosure, and nothing more.89 The 

MSRB stated that no indicator would be 

provided for issuers that choose not to 

make the voluntary undertaking.90

The MSRB did not believe that there 

is any significant risk of a tiered market 

perception developing in the near future 

based solely on the voluntary 

undertaking.91 The MSRB indicated that 

it would make the appropriate EMMA 

portal disclosures regarding the limited 

nature of the undertaking to help 

minimize the possibility that market 

participants would place undue 

emphasis on a single factor when 

making an investment decision.92 The 

MSRB opined that the marketplace 

would correctly view the voluntary 

undertaking as an initial step in a 

process toward more rapid 

dissemination of disclosure information 

to the public.93

The MSRB did not believe that the 

voluntary annual filing undertaking 

would create an excessive burden on 

issuers or that issuers would reduce the 

quality of disclosures in order to meet 

the timeframe.94 The MSRB remarked 

that the existence of this optional 

undertaking is not intended to create an 

inference that issuers should sacrifice 

the quality of the information provided 

in their annual filings in order to meet 

a specific timeframe, and it did not 

believe that the undertaking would have 

such a negative effect.95

In discussing financial disclosure 

standards for municipal securities, the 

MSRB noted that in the past, any de 

facto standards have been the result of 

slow evolution in the market through 

natural economic forces or the result of 

collaboration among the various 

interested parties, such as with the 

evolving de facto standard for quarterly 

information provided by many hospital 

borrowers arising from the collaborative 

work of issuers, obligated persons and 

investors in recent years.96 The MSRB 

believed that the single consistent 

voluntary submission timeframe under 

the voluntary annual filing undertaking, 

available to all issuers with the full 

knowledge that only some issuers 

would be able to make the voluntary 

undertaking at the current time, would 

serve to provide an appropriately 

uniform initial target for those market 

participants seeking to work toward 

more timely availability of financial 

information in the marketplace.97

In response to some commenters’ 

recommendation that EMMA should 

allow issuers to specify a specific date 

by which annual financial information 

is expected to be submitted and should 

indicate whether the issuer was in 

compliance with such deadline, the 

MSRB noted that it has filed a separate 

proposed rule change with the 

Commission that addresses these 

concerns.98 The MSRB remarked that 

that filing would require underwriters, 

in connection with new issues that they 

underwrite, to provide to EMMA 

information regarding the deadline for 

submitting annual financial information 

by issuers to EMMA pursuant to their 

continuing disclosure agreements.99 The 

MSRB noted that this deadline would be 

displayed on the EMMA portal in close 

proximity to information showing the 

timing of actual submissions made by 

issuers of their annual financial 

information, thus achieving the 

objectives set out by the commenters.100

According to the MSRB, information 

regarding the voluntary undertaking 

also would be displayed in close 

proximity to information showing the 

timing of actual submissions made by 

issuers, thus providing a method for 

investors to check on the issuer’s 

performance in connection with the 

undertaking.101 The Commission notes 

that it has approved the MSRB’s filing 

to allow these displays on EMMA at the 

same time it is approving the instant 

proposed rule change, and believes that 

the enhancements to EMMA relating to 

underwriters’ requirements will address 

the commenters’ recommendations 

concerning issuers’ compliance with 

existing undertakings regarding 

submission of financial information.102

In response to some commenters’ 

suggestion that the timeframe be 180 

days, the MSRB noted that the 

timeframe set forth in the voluntary 

undertaking should be shorter than 

other timeframes currently in use, such 

as the GFOA CAFR certificate program’s 

180-day timeframe, and that the 

transitional 150-day timeframe included 

in Amendment No. 1 would provide a 

mid-point between the original 120-day 

timeframe of the voluntary undertaking 

and the GFOA’s 180-day timeframe.103

The Commission believes that the 

MSRB has adequately addressed the 

concerns of commenters with respect to 

the voluntary annual filing undertaking. 

Importantly, the Commission notes that 

this undertaking is voluntary and will 

provide investors, as well as brokerdealers, analysts and other market 

professionals, with financial 

information about municipal securities 

within a timeframe voluntarily agreed to 

by the issuer. The Commission is 

sensitive to the great variety of 

municipal issuers and obligated persons 

and the many fiscal and other pressures 

that they face, but is also sensitive to the 

concerns of investors and other 

participants in our capital markets, who 

need timely information to make 

informed decisions. The Commission 

believes that investors, broker-dealers, 

analysts and other users of the EMMA 

system will greatly benefit from the 

ability to easily identify those issuers 

and obligated persons that have 

committed to providing financial 

information by a specific deadline. The 

120- and 150-day timeframes are 

voluntary and will assist investors in 

making investment decisions and in 

monitoring their securities portfolios; 

will reward those issuers and obligated 

persons that are able to achieve greater 

timeliness in financial reporting; and 

may encourage greater timeliness by 

other issuers and obligated persons over 

time as they work to surmount the 

obstacles that currently prevent them 

from preparing and disseminating 

financial information within the 


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104See NAHEFFA Letter, GFOA Letter II, 

Connecticut Letter I. 105See GFOA Letter II, Consortium Letter. 106See NAST Letter. 107See NABL Letter. 108See Amendment No. 1. 109See Connecticut Letter II. 

110See Connecticut Letter I, Connecticut Letter II. 

111See GFOA Letter III. 

112See NAIPFA Letter. 

113See Amendment No. 2. 

114 Id. 

115See Amendment No. 1. 

116 Id. 

117 Id. 

118See Amendment No. 2. 

119 Id. 

120See, e.g., Connecticut Letter I, GFOA Letter III. 

121See GFOA Letter III. 

122See Connecticut Letter I. 

proposed timeframes and without 

sacrificing the quality of their reporting. 

Voluntary GAAP Undertaking 

The original proposed rule change 

would amend the EMMA continuing 

disclosure service to permit issuers and 

obligated persons to undertake, on a 

voluntary basis, to prepare audited 

financial statements pursuant to GAAP 

as established by GASB. This would 

consist of a voluntary undertaking by an 

issuer or obligated person (in the case of 

an obligated person that is a State or 

local governmental entity), either at the 

time of a primary offering or at any time 

thereafter, that the issuer or obligated 

person would prepare its audited 

financial statements in accordance with 

GAAP as established by GASB. 

Commenters generally supported the 

voluntary ‘‘GAAP as established by 

GASB’’ undertaking, although several 

commenters noted that certain issuers 

do not use GASB accounting standards 

and suggested alternative 

recommendations.104 Two commenters 

recommended that the proposal not 

include the accounting standard setting 

body (indicating only compliance with 

GAAP),105 and one commenter 

recommended the inclusion of the 

accounting standard setting body, GASB 

or any other standard setting body, in 

order for the reader of the financial 

statements to distinguish which 

standards are being followed.106

Another commenter expressed concern 

that an issuer that does not elect a 

voluntary GAAP undertaking would be 

stigmatized as less creditworthy even 

where it follows other standards, 

including statutory standards, and noted 

that financial statements are 

accompanied by a statement of the 

accounting principles applied.107 In 

Amendment No. 1, the MSRB agreed 

with commenters that many obligated 

persons may be subject to FASB 

standards rather than GASB 

standards.108 The MSRB therefore 

modified the voluntary GAAP 

undertaking to permit the submitter to 

select either the GASB or FASB 

standards for GAAP. 

As noted above, the Commission 

received three comment letters in 

response to the Amendment No. 1 

Notice. One of these commenters 

suggested the allowance of modified 

GAAP.109 This commenter questioned 

the usefulness of the GASB GAAP 

undertaking and stated that use of GASB 

GAAP may not always be clear; because 

it prepares its information on a modified 

GAAP basis, it would probably not be 

able to make this undertaking.110 The 

second commenter did not support the 

amended proposal to have a field that 

references ‘‘a particular standard-setting 

body’’ and noted that ‘‘it is redundant for 

the MSRB to also include the body in 

which GAAP standards are 

established.’’ 111 The third commenter 

agreed with the provision to have 

issuers and obligated persons designate 

whether their audited financials are 

prepared pursuant to GAAP but not the 

use of GASB standards because some 

issuers may be required to use other 

GAAP standards.112

The MSRB stated that permitting 

investors to understand the standards 

applied to the preparation of an issuer’s 

or obligated person’s financial 

statements would be valuable.113 The 

MSRB indicated that the fact that an 

issuer or obligated person has entered 

into a voluntary GAAP undertaking, 

including whether the financial 

statements are to be prepared pursuant 

to GASB or FASB standards, would be 

prominently disclosed on the EMMA 

Web portal as a distinctive characteristic 

of the securities to which such 

undertaking applies.114 The MSRB 

noted that it would include an 

explanation of the nature of the 

voluntary GAAP undertaking on the 

EMMA Web portal.115 In particular, the 

MSRB would disclose that the voluntary 

GAAP undertaking is voluntary; is 

solely indicative of the accounting 

standards that the issuer or obligated 

person intends to use in preparing its 

financial statements; and is not 

indicative of the accuracy or 

completeness of the financial statements 

or of the financial health of the issuer 

or obligated person.116 Further, the 

MSRB advised that it would disclose 

that a decision by an issuer or obligated 

person not to make such an undertaking 

does not raise a negative inference in 

regard to the accuracy or completeness 

of its financial statements or of the 

financial health of the issuer or 

obligated person.117 According to the 

MSRB, each of the undertakings 

pursuant to the proposal, including the 

voluntary GAAP undertaking, would 

permit a free text input field permitting 

issuers and obligated persons to include 

additional information relating to each 

such item that they may deem 

appropriate with respect thereto for 

public dissemination.118 The MSRB 

believed that this feature should provide 

such issuers and obligated persons with 

adequate opportunity to disclose 

appropriate information to investors.119

The Commission believes that the 

proposed voluntary GAAP undertaking 

will assist investors and other users of 

the EMMA system in determining how 

financial statements are prepared. The 

uniformity provided by audited 

financial statements that are prepared 

by issuers and obligated persons 

pursuant to GAAP in accordance with 

GASB or FASB standards will reduce 

the need by investors to reconcile the 

use of disparate accounting principles. 

The features of the EMMA continuing 

disclosure service permitting issuers 

and obligated persons to include 

additional information should address 

commenters’ concerns about special 

situations that require clarification. 

Investor Relation URL Posting 

The proposal would amend the 

EMMA continuing disclosure service to 

permit issuers and obligated persons to 

post the URLs for their Internet-based 

investor relations or other repository of 

financial/operating information. The 

URL of an issuer’s or obligated person’s 

investor relations or other repository of 

financial/operating information would 

be entered through a text/data input 

field on EMMA and no document would 

be required to be submitted to EMMA. 

Commenters generally supported the 

proposal to permit issuers and obligated 

persons to provide a hyperlink to their 

investor relations or similar Web 

page.120 One commenter thought that 

this field would provide investors with 

valuable information and would likely 

be the most useful voluntary field 

proposed by the MSRB.121 Another 

commenter noted that this hyperlink 

may be more useful to the general 

public than CUSIP-based EMMA filings 

for general financial information that is 

not issue-specific.122

One commenter requested that issuers 

be given an ability to correct or 

withdraw URLs to ensure that links are 

accurate, recommended the allowance 

of multiple links, and requested 

guidance on the responsibilities of 

issuers with regard to the posting of 


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123See GFOA Letter II, GFOA Letter III. 

124See SIFMA Letter. 

125See Amendment No. 1. 

126 Id. 

127See Amendment No. 2. 

128See Amendment No. 1. 

129 Id. 

130 Id. 

131See GFOA Letter III. 

132See Amendment No. 2. 

133See NABL Letter. 

134See Press Release 2010–85 (May 26, 2010). 

135See NAIPFA Letter. 

136See Amendment No. 2. 

137 Id. The Commission notes that, on May 20, 

2010, the MSRB filed a proposed rule change 

relating to the posting of credit rating information 

on its EMMA system. 

138See Connecticut Letter I. 

139 15 U.S.C. 78q(a). 

140 15 U.S.C. 78q(b). 

141 15 U.S.C. 78s(b)(2). 

hyperlinks on EMMA.123 Another 

commenter asked about the role and 

obligations of dealers if the proposal is 

adopted; expressed liability concerns 

regarding the use of a URL in municipal 

securities offering documents and 

EMMA submissions during the 

underwriting period of a primary 

offering; and suggested a limit on the 

use of the URL during the underwriting 

period of a primary offering.124

The MSRB noted that issuers and 

obligated persons would be able to make 

appropriate changes to the URLs posted 

through EMMA.125 The hyperlinks 

would be posted in a manner designed 

to segregate access to the URL from 

postings of official statements for new 

issues.126 The MSRB intends to provide 

flexibility to issuers and obligated 

persons regarding the posting of 

appropriate links, including multiple 

links, and would provide the ability to 

correct or withdraw URLs to ensure that 

links are accurate.127

The Commission believes that a URL 

provided by an issuer or obligated 

person would provide investors, brokerdealers, analysts and others with an 

important additional means to obtain 

further financial operating or other 

investment-related information about 

such issuer or obligated person. 

Elimination of Proposed GFOA–CAFR 

Certificate 

The original proposed rule change 

would have amended the EMMA 

continuing disclosure service to permit 

issuers to submit the Certificate of 

Achievement for Excellence in 

Financial Reporting awarded by GFOA 

in connection with the preparation of its 

CAFR. 

In Amendment No. 1, the MSRB 

stated that it determined not to proceed 

with this element of the proposal. The 

MSRB noted that CAFRs already are 

frequently submitted to EMMA by 

issuers as the audited financial 

statements element of their annual 

financial information filings, and in 

most cases the issuers include the 

GFOA certificate in the submitted 

CAFR.128 The MSRB stated that as part 

of its routine EMMA update and 

maintenance process, it expected to 

modify the input process for all 

continuing disclosure submissions to 

permit issuers and obligated persons to 

input specific document titles and/or 

subcategories, which would permit 

submitters of CAFRs to indicate that 

their submitted audited financial 

statements are CAFRs.129 According to 

the MSRB, this document title/ 

subcategory would be displayed on the 

EMMA Web portal.130

GFOA, in commenting on the 

Amendment No. 1 Notice, 

recommended that this voluntary field 

be included within EMMA, noting that 

such a field is useful to investors as it 

tells them which governments have 

exceptional reporting standards.131 In 

Amendment No. 2, the MSRB stated that 

the current channels for disseminating 

CAFRs and the related GFOA certificate 

are adequate but that it may consider 

further action in this area in the 

future.132 The Commission believes that 

the MSRB’s decision to eliminate the 

GFOA certificate field is reasonable 

given that GFOA certificates are 

typically submitted to EMMA with 

CAFRs. 

Other General Comments 

One commenter recommended that 

the Commission defer action on the 

MSRB’s proposal to add additional 

voluntary submissions by issuers until 

after the proposed Rule 15c2–12 

amendments are considered and 

adopted in order to accommodate an 

orderly integration of revised Rule 

15c2–12 submissions and EMMA 

voluntary submissions.133 The 

Commission notes that the amendments 

to Rule 15c2–12 are being adopted at the 

same time that it approves the instant 

proposed rule change.134

One commenter on the Amendment 

No. 1 Notice provided a series of 

comments and suggestions relating to 

various elements of the proposal.135

These included a suggested edit in the 

facility language for the EMMA primary 

market disclosure service regarding 

issuers being able to designate an agent 

for purposes of making primary market 

submissions; support for voluntary 

submission of information on swaps, 

swaptions and variable rate debt; and 

encouragement for the MSRB to pursue 

submission of ratings from rating 

agencies. In Amendment No. 2, the 

MSRB indicated that, with regard to the 

suggestion regarding facility language, 

the proposed EMMA revisions 

contained in Amendment No. 1 

appropriately ensure that an issuer can 

designate an agent and remarked that 

the filing indicates that the term 

‘‘designating underwriter’’ has been 

changed to ‘‘designating party’’ 

specifically to permit an issuer to make 

such designation.136 In addition, in 

Amendment No. 2 the MSRB noted that 

it currently is in the early stages of 

developing a process to receive 

electronic feeds of municipal securities 

credit rating information from 

Nationally Recognized Statistical Rating 

Organizations for purposes of displaying 

on the EMMA portal.137

Another commenter recommended 

that the Commission maintain close 

oversight of EMMA and revisit this 

matter in two to three years to 

determine whether the MSRB system is 

meeting expectations and whether the 

needs of all market participants are 

being addressed.138 The Commission 

notes that, because the MSRB is a selfregulatory organization (‘‘SRO’’), the 

Commission has, and exercises, 

oversight authority over the MSRB. The 

MSRB must file proposed rule changes 

with the Commission under Section 

19(b) of the Exchange Act, including 

any changes to the EMMA system and 

any fees relating to the EMMA system. 

In addition, the MSRB is subject to the 

recordkeeping requirements of 17(a) of 

the Exchange Act 139 and is subject to 

the Commission’s examination authority 

under Section 17(b) of the Exchange 

Act.140 Through the Commission’s 

recordkeeping requirements and 

examination and rule filing processes, 

the Commission oversees the MSRB and 

will be able to ascertain whether the 

MSRB is implementing EMMA 

appropriately and meeting EMMA’s 

stated objectives, as well as whether it 

is complying with its legal obligations 

under the Exchange Act. 

With regard to all other issues raised 

by the commenters, the Commission 

believes that the MSRB has adequately 

addressed the commenters’ concerns. 

IV. Order Granting Accelerated 

Approval of Proposed Rule Change 

Pursuant to Section 19(b)(2) of the 

Act,141 the Commission may not 

approve any proposed rule change, or 

amendment thereto, prior to the 30th 

day after the date of publication of 

notice of the filing thereof, unless the 

Commission finds good cause for so 

doing and publishes its reasons for so 


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30886 Federal Register / Vol. 75, No. 105 / Wednesday, June 2, 2010 / Notices 

142See Release No. 34–60315, supra note 3. 

143See Release No. 34–61237, supra note 7. 

144 15 U.S.C. 78s(b)(2). 

145 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition 

and capital formation. 15 U.S.C. 78c(f). 

146 15 U.S.C. 78o–4(b)(2)(C). 

147 15 U.S.C. 78s(b)(2). 148 17 CFR 200.30–3(a)(12). 

finding. The Commission hereby finds 

good cause for approving the proposed 

rule change, as modified by Amendment 

Nos. 1 and 2, before the 30th day after 

the date of publication of notice of filing 

thereof in the Federal Register. The 

Commission notes that the original 

proposed rule change and Amendment 

No. 1 were published in the Federal 

Register on July 15, 2009 142 and 

January 5, 2010,143 respectively. The 

Commission does not believe that 

Amendment No. 2 significantly alters 

the proposal. In Amendment No. 2, the 

MSRB requested an additional three 

months to develop, test, and implement 

the proposal and clarified that, 

consistent with statements in 

Amendment No. 1, the voluntary 

undertakings to be submitted to the 

MSRB’s EMMA continuing disclosure 

service must be entered into as 

contractual undertakings for the benefit 

of bondholders. The Commission 

believes that these revisions are 

consistent with the proposal’s purpose 

and raise no new significant issues. 

Accordingly, pursuant to Section 

19(b)(2) of the Act,144 the Commission 

finds good cause to approve the 

proposed rule change, as amended, on 

an accelerated basis. 

V. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as amended, is consistent with 

the Exchange 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–MSRB–2009–10 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–MSRB–2009–10. 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 Web site 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 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

MSRB. 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–MSRB–2009–10 and should 

be submitted on or before June 23, 2010. 

VII. Conclusion 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change, as amended, is consistent 

with the Exchange Act and the rules and 

regulations thereunder applicable to the 

MSRB145 and, in particular, the 

requirements of Section 15B(b)(2)(C) of 

the Exchange Act 146 and the rules and 

regulations thereunder. The proposal 

will become effective on a date to be 

announced by the MSRB in a notice 

published on the MSRB Web site, which 

date shall be no later than one year after 

Commission approval of the proposed 

rule change and shall be announced no 

later than sixty (60) days prior to the 

effective date. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,147

that the proposed rule change (SR– 

MSRB–2009–10), as amended, be, and it 

hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.148

Florence E. Harmon, 

Deputy Secretary. 

Exhibit A 

Key to Comment Letters Cited in Approval 

Order Relating to Additional Voluntary 

Submissions by Issuers to the MSRB’s 

Electronic Municipal Market Access System 

(EMMA®) 

File No. SR–MSRB–2009–10 

Comments Relating to Original Proposed 

Rule Change 

1. Ernesto A. Lanza, General Counsel, 

MSRB, dated August 6, 2009 (‘‘MSRB 

Letter’’). 

2. Robert J. Kleine, Michigan State 

Treasurer, dated August 10, 2009 (‘‘Michigan 

Letter’’). 

3. Memorandum from the Office of the 

Chairman regarding a meeting with 

representatives of Division of Investment 

Management, Division of Trading and 

Markets, and the Government Finance 

Officers Association, dated August 11, 2009 

(‘‘August 11th Memorandum’’). 

4. Robert Donovan, Executive Director, 

Rhode Island Health and Educational 

Building Corporation, Chair, National 

Association of Health and Educational 

Facilities Finance Authorities (‘‘NAHEFFA’’) 

Advocacy Committee, dated August 12, 2009 

(‘‘NAHEFFA Letter’’). 

5. Jan I. Sylvis, Chief of Accounts, State of 

Tennessee, dated August 12, 2009 

(‘‘Tennessee Letter’’). 

6. Leon J. Bijou, Managing Director and 

Associate General Counsel, Securities 

Industry and Financial Markets Association 

(‘‘SIFMA’’), dated August 12, 2009 (‘‘SIFMA 

Letter’’). 

7. Susan Gaffney, Director, Federal Liaison 

Center, Government Finance Officers 

Association (‘‘GFOA’’), dated August 12, 2009 

(‘‘GFOA Letter I’’). 

8. John Wallingford, Executive Board 

Member, Virginia Government Finance 

Officers Association (‘‘Virginia GFOA’’), 

dated August 12, 2009 (‘‘Virginia GFOA 

Letter I’’). 

9. William A. Holby, President, The 

National Association of Bond Lawyers 

(‘‘NABL’’), dated August 13, 2009 (‘‘NABL 

Letter’’). 

10. Marycarol C. White, CPA, CPFO, 

President, Virginia Government Finance 

Officers’ Association (‘‘Virginia GFOA’’), 

dated August 14, 2009 (‘‘Virginia GFOA 

Letter II’’). 

11. Jeffrey L. Esser, Executive Director and 

CEO, The Government Finance Officers 

Association (‘‘GFOA’’), dated August 17, 2009 

(‘‘GFOA Letter II’’). 

12. Dean Martin, Chief Financial Officer, 

Inland Empire Utilities Agency, dated August 

18, 2009 (‘‘Inland Letter’’). 

13. Lisa Nolen, CPA, CGFM, Rutherford 

County Finance Director, Murfreesboro, 

Tennessee, dated August 19, 2009 

(‘‘Rutherford Letter’’). 


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1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 

14. Kathryn Kasza, CMTW, ClerkTreasurer, Village of Greendale, Greendale, 

Wisconsin, dated August 19, 2009 

(‘‘Greendale Letter’’). 

15. Denise L. Nappier, Connecticut State 

Treasurer, dated August 20, 2009 

(‘‘Connecticut Letter I’’). 

16. Heather Traeger, Associate Counsel, 

Investment Company Institute (‘‘ICI’’), dated 

August 21, 2009 (‘‘ICI Letter’’). 

17. David Muir, President, Utah 

Government Finance Officers Association 

(‘‘Utah GFOA’’), Finance Director, 

Cottonwood Heights City, dated August 25, 

2009 (‘‘Utah GFOA Letter’’). 

18. Robert Scott, CPA, CPFO, Director of 

Finance, City of Brookfield, Wisconsin, dated 

August 30, 2009 (‘‘Brookfield Letter’’). 

19. Kenneth L. Rust, Chief Administrative 

Officer, and Eric H. Johansen, Debt Manager, 

City of Portland, Oregon, dated September 1, 

2009 (‘‘Portland Letter’’). 

20. Bernice Bagnall, President, Oregon 

Municipal Finance Officers Association 

(‘‘OMFOA’’), Tualatin Valley Water District, 

dated September 2, 2009 (‘‘OMFOA Letter’’). 

21. Gerry Fink, Village of Hinsdale, 

Illinois, dated September 3, 2009 (‘‘Hinsdale 

Letter’’). 

22. Beth Kellar, International City/County 

Management Association; Steve Traylor, 

National Association of Counties; Cornelia 

Chebinou, National Association of State 

Auditors, Comptrollers and Treasurers; Lars 

Etzkorn, National League of Cities; Larry 

Jones, U.S. Conference of Mayors; Amy Hille, 

American Public Power Association; and 

Rick Farrell, Council on Infrastructure 

Financing Authorities; dated September 3, 

2009 (‘‘Consortium Letter’’). 

23. Richard C. Kristof, Director of Financial 

Services, City of Rio Rancho, Rio Rancho, 

New Mexico, dated September 3, 2009 (‘‘Rio 

Rancho Letter’’). 

24. Eileen Bradley, Assistant Director of 

Finance, Township of Lower Merion, dated 

September 4, 2009 (‘‘Lower Merion Letter’’). 

25. R.T. McNamar, President, E-Certus, 

Inc., dated September 8, 2009 (‘‘E-Certus 

Letter’’). 

26. David B. Vehaun, Assistant City 

Manager, City of Rock Hill, South Carolina, 

dated September 23, 2009 (‘‘Rock Hill 

Letter’’). 

27. Jeb Spaulding, President, National 

Association of State Treasurers (‘‘NAST’’), 

Treasurer, State of Vermont, dated September 

25, 2009 (‘‘NAST Letter’’). 

Comments Relating to Amendment No. 1 

1. Jeffrey L. Esser, Executive Director and 

CEO, Government Finance Officers 

Association, dated January 25, 2010 (‘‘GFOA 

Letter III’’). 

2. Denise L. Nappier, Connecticut State 

Treasurer, dated January 27, 2010 

(‘‘Connecticut Letter II’’). 

3. Steven Apfelbacher, President, National 

Association of Independent Public Finance 

Advisors (‘‘NAIPFA’’), dated February 5, 2010 

(‘‘NAIPFA Letter’’). 

[FR Doc. 2010–13155 Filed 6–1–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62176; File No. SR– 

NASDAQ–2010–063] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Routing Fees 

May 26, 2010. 

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 May 26, 

2010, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or ‘‘Exchange’’) 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 Exchange. 

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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to modify 

Rule 7050 governing pricing for 

NASDAQ members using the NASDAQ 

Options Market (‘‘NOM’’), NASDAQ’s 

facility for executing and routing 

standardized equity and index options. 

Specifically, NOM proposes to expand 

the list of options that will be assessed 

routing fees of $0.30 per contract for 

customer orders and $0.55 per contract 

for Firm and Market Maker orders that 

are routed from NOM to NASDAQ OMX 

PHLX, Inc. (‘‘Phlx’’). 

While changes to the Fee Schedule 

pursuant to this proposal are effective 

upon filing, the Exchange has 

designated these changes to be operative 

for transactions on June 1, 2010. 

The text of the proposed rule change 

is set forth below. Proposed new text is 

in italics and deleted text is in brackets. 

* * * * * 

7050. NASDAQ Options Market 

The following charges shall apply to 

the use of the order execution and 

routing services of the NASDAQ 

Options Market by members for all 

securities. 

(1)–(3) No Change. 

(4) Fees for routing contracts to 

markets other than the NASDAQ 

Options Market shall be assessed as 

provided below. The current fees and a 

historical record of applicable fees 

related to orders routed to other 

exchanges shall be posted on the 

NasdaqTrader.com Web site. 

Exchange Customer Firm MM 

BATS .................................................................................................................................................................... 0.36 0.55 0.55 

BOX ..................................................................................................................................................................... 0.06 0.55 0.55 

CBOE ................................................................................................................................................................... 0.06 0.55 0.55 

ISE ....................................................................................................................................................................... 0.06 0.55 0.55 

NYSE Arca Penny Pilot ....................................................................................................................................... 0.50 0.55 0.55 

NYSE Arca Non Penny Pilot ............................................................................................................................... 0.06 0.55 0.55 

NYSE AMEX ........................................................................................................................................................ 0.06 0.55 0.55 

PHLX (for all options other than the below listed options) ................................................................................. 0.06 0.55 0.55 

PHLX (for the following options only): AA, AAPL, ABK, ABX, AIG, ALL, AMD, AMR, AMZN, ARIA, AXP, 

BAC, BRCD, C, CAT, CIEN, CIGX, CSCO, DELL, DIA, DNDN, DRYS, EBAY, EK, F, FAS, FAZ, GDX, 

GE, GLD, GLW, GS, HAL, IBM, INTC, IWM, IYR, JPM, LVS, MGM, MOT, MSFT, MU, NEM, NOK, 

NVDA, ONNN, ORCL, PALM, PFE, POT, QCOM, QID, QQQQ, RIG, RIMM, RMBS, SBUX, SDS, SIRI, 

SKF, SLV, SMH, SNDK, SPY, T, TBT, TZA, UAUA, UNG, USO, UYG, V, VALE, VZ, WYNN, X, XHB, 

XLF, XRX and YHOO ...................................................................................................................................... 0.30 0.55 0.55 

* * * * * The text of the proposed rule change 

is available on the Exchange’s Web site 

at http:// 

www.nasdaqomx.cchwallstreet.com, at 


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