[Federal Register Volume 60, Number 249 (Thursday, December 28, 1995)]
[Notices]
[Pages 67145-67146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31354]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36610; File No. SR-MSRB-95-19]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Municipal Securities 
Rulemaking Board Relating to an Extension of the Continuing Disclosure 
Information (``CDI'') System From December 31, 1995 Through September 
30, 1996

December 20, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. 78s(b)(1), and Rule 19b-4 thereunder, notice is 
hereby given that on November 28, 1995, the Municipal Securities 
Rulemaking Board (``Board'' or ``MSRB'') filed with the Securities and 
Exchange Commission (``Commission''' or ``SEC'') a proposed rule change 
(File No. SR-MSRB-95-19). The proposed rule change is described in 
Items I, II, and III below, which Items have been prepared by the 
Board. The MSRB has designated this proposal as concerned solely with 
the administration of the Board under Section 19(b)(3)(A) of the Act, 
which renders the rule effective upon the Commission's receipt of this 
filing. 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 a proposed rule change to request an extension, 
from December 31, 1995, through September 30, 1996, of its interim 
Continuing Disclosure Information (``CDI'') system of the Municipal 
Securities Information Library<Register> (MSIL<SUP>TM) system. The 
Board requests that the Commission set the effective date for 30 days 
after filing.

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 Board included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments is received on the proposed rule change. The 
texts of these statements may be examined at the places specified in 
Item IV below. The Board has prepared summaries, set forth in Section 
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

    On April 6, 1992, the Commission approved the CDI system for an 18-
month period.\1\ The CDI system began operating on January 23, 1993, 
and functions as part of the Board's MSIL<SUP>TM system. The CDI system 
accepts and disseminates voluntary submissions of official disclosure 
notices relating to outstanding issues of municipal securities, i.e., 
continuing disclosure information. During its first phase of operation, 
the system accepted disclosure notices only from trustees. On May 17, 
1993, the system also began accepting disclosure notices from 
issuers.\2\

    \1\ Securities Exchange Act Release No. 30556 (April 6, 1992), 
57 FR 12534.
    \2\ On May 17, 1993, the Board reported to the Commission on the 
initial phase of operation of the CDI system regarding technical, 
policy and cost issues and proposed enhancements to the system.
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    On November 10, 1994, the Commission approved an amendment to its 
Rule 15c2-12 which prohibits dealers from underwriting issues of 

[[Page 67146]]
municipal securities unless the issuer commits, among other things, to 
provide material events notices to the Board's CDI system or to all 
Nationally Recognized Municipal Securities Information Repositories 
(``NRMSIRs'') and to the applicable state information depository.\3\ In 
addition, the Rule prohibits dealers from recommending municipal 
securities without having a system in place to receive material events 
notices.\4\ To conform to the new Commission requirements, the Board 
revised the CDI system and implemented an interim system designed to 
accept material event notices while a larger permanent system is being 
designed.\5\ The Commission approved operation of the interim system 
through December 31, 1995.\6\

    \3\ Securities Exchange Act Release No. 34961 (November 10, 
1994), 59 FR 59590. This provision of the Rule became effective on 
July 3, 1995. See Securities Exchange Act Release No. 35911.
    \4\ The effective date of this provision of the Rule is January 
1, 1996.
    \5\ The Board also terminated the pilot phase of the CDI System 
and filed its Report on the Conclusion of the CDI Pilot of the 
Municipal Securities Information Library<SUP>TM System with the 
Commission on August 25, 1995.
    \6\ Securities Exchange Act Release No. 35911 (June 28, 1995), 
60 FR 35248.
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    The Board is requesting an extension for the interim system through 
September 30, 1996, to gain additional experience with the new 
disclosure scheme of SEC Rule 15c2-12 while the permanent system is 
being designed. The amendments to SEC Rule 15c2-12 regarding material 
event notices were effective in July 1995, and will not be fully 
effective until January 1, 1996. Issuers and their agents are still in 
the process of adjusting to the amendments. The current volume of 
material event notices has been within the capacity of the interim 
system. Additional experience will allow the Board to design the 
permanent system to more efficiently accommodate the expected volume of 
material event notices. In addition, the permanent system is being 
designed to accommodate longer documents.
    The Board believes that an extension of the operation of the 
interim CDI system through September 30, 1996, will give it sufficient 
time to determine the system changes needed, in consultation with the 
Commission as well as potential users of the system, including NRMSIRs. 
Prior to that time, the Board plans to ask the Commission for approval 
of the permanent CDI system, which will be described in a filing with 
the Commission.
    The Board believes the proposed rule change is consistent with 
Section 15B(b)(2)(C) of the Act, which provides that the Board'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.

    The MSIL<SUP>TM system is designed to increase the integrity and 
efficiency of the municipal securities market by, among other things, 
helping to ensure that the price charged for an issue in the secondary 
market reflects all available official information about that issue. 
The Board will continue to operate the output side of the CDI system to 
ensure that the information is available to any party who wishes to 
subscribe to the service. As with all MSIL<SUP>TM system services, this 
service is available, on equal terms, to any party requesting the 
service.

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

    The Board does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement of Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
(iii) was provided to the Commission for its review at least five days 
prior to the filing date; and (iv) does not become operative for thirty 
days from the date of its filing on November 28, 1995, the proposed 
rule change has become effective pursuant to Section 19(b)(3)(A) of the 
Act and Rule 19b-4(e)(6) thereunder. In particular, the Commission 
believes the proposed rule change qualifies as a ``non-controversial 
filing'' in that the proposed standards do not significantly affect the 
protection of investors or the public interest and do not impose any 
significant burden on competition. At any time within sixty days of the 
filing of the proposed rule change, the Commission may summarily 
abrogate such rule change if it appears to the Commission that such 
action is necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street NW., Washington, DC 20549. Copies 
of the submission, all subsequent amendments, all written statements 
with respect to the proposed rule change that are filed with the 
Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for inspection and copying in the 
Commission's Public Reference Room. Copies of the filing will also be 
available for inspection and copying at the Board's principal offices. 
All submissions should refer to File No. SR-MSRB-95-19 and should be 
submitted by January 18, 1996.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-31354 Filed 12-27-95; 8:45 am]
BILLING CODE 8010-01-M