13496 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Notices

3 15 U.S.C. 78s(b)(3)(A) (1988).

4 17 CFR 240.19b–4(e) (1994).

5 17 CFR 200.30(a)(12) (1994).

1On November 9, 1994, the MSRB filed

Amendment No. 1 with the Commission.

Amendment No. 1 withdraws from the filing the

proposed amendment to rule G–37(g)(iv)(A). The

MSRB had proposed to amend the definition of

‘‘municipal finance professional’’ contained in rule

G–37(g)(iv)(A) to exempt retail sales persons from

being deemed ‘‘municipal finance professionals.’’

2 15 U.S.C. § 78s(b)(1).

3 17 CFR 240.19b–4.

4The Board published the text of the proposed

rule change in the August 1994 MSRB Reports, Vol.

14, No. 4, at 27–32.

5Letter from Mark D. Schwartz, Esq. (‘‘Schwartz’’)

to Arthur Levitt, Chairman, Commission, dated

September 18, 1994 (‘‘Schwartz Letter’’); Letter from

Heather L. Ruth, President, Public Securities

Association (‘‘PSA’’) to Jonathan G. Katz, Secretary,

Commission, dated September 18, 1994 (‘‘PSA

Letter’’); Letter from Patrick J. Manning, President,

Chemical Securities Inc. (‘‘Chemical’’) to Jonathan

G. Katz, Secretary, Commission, dated September

30, 1994 (‘‘Chemical Letter’’); Letter from Rhonda

G. Kirschner, Senior Attorney and Corporate Vice

President, Paine Webber Inc. (‘‘Paine Webber’’) to

Jonathan G. Katz, Secretary, Commission, dated

September 30, 1994 (‘‘Paine Webber Letter’’); Letter

from Robin L. Wiessmann, Principal, Artemis

Capital Group, Inc. (‘‘Artemis’’) to Jonathan G. Katz,

Secretary, Commission, dated September 29, 1994

(‘‘Artemis Letter’’); Letter from W. Robb Hough, Jr.,

President, William R. Hough & Co. (‘‘Hough’’) to

Jonathan G. Katz, Secretary, Commission, dated

September 29, 1994 (‘‘Hough Letter’’); Letter from

Robert K. Dalton, Vice Chairman and William H.

Coughlin, President, George K. Baum & Co.

(‘‘Baum’’) to Jonathan G. Katz, Secretary,

Commission, dated September 28, 1994 (‘‘Baum

Letter’’); Letter from Brian C. Underwood, Vice

President—Director of Compliance, A.G. Edwards &

Sons, Inc. (‘‘Edwards’’) to Jonathan G. Katz,

Secretary, Commission, dated September 29, 1994

(‘‘Edwards Letter’’); Letter from Samuel J. Winer,

Esq., Arter & Hadden to Jonathan G. Katz, Secretary,

Commission, dated October 20, 1994 (‘‘Arter &

Hadden Letter’’); Letter from A. George Saks,

Executive Vice President, Secretary and General

Counsel, Smith Barney Inc. (‘‘Smith Barney’’) to

Jonathan G. Katz, Secretary, Commission, dated

September 29, 1994 (‘‘Smith Barney Letter’’); Letter

from Steven D. Vander Clay, Vice President, NBD

Bank, N.A. (‘‘NBD’’) to Jill C. Finder, Assistant

General Counsel, MSRB, dated October 20, 1994

(‘‘NBD Letter’’).

6Securities Exchange Act Release No. 33868

(April 7, 1994), 59 FR 17621 (April 13, 1994)

(‘‘Approval Order’’). The rule applies to

contributions made on and after April 25, 1994.

7See Securities Exchange Act Release No. 34161

(June 6, 1994), 59 FR 30379 (June 13, 1994). The

interpretations were published in the June 1994

MSRB Reports.

8Securities Exchange Act Release No. 34160

(June 3, 1994); 59 FR 30376 (June 13, 1994).

9See Securities Exchange Act Release No. 35128

(December 20, 1994), 59 FR 66989 (December 28,

1994); Securities Exchange Act Release No. 34603

(August 25, 1994), 59 FR 45049 (August 31, 1994).

See also MSRB Reports, Vol. 14, No. 5, at 8

(December 1994); Vol. 14, No. 4, at 27–32 (August

1994). The interpretations also are available for

inspection and copying at the Commission’s public

reference room and at the Board.

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

Comments were neither solicited nor

received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to Section

19(b)(3)(A) 3 of the Act and Rule 19b–

4(e) 4 thereunder in that it establishes or

changes a due, fee, or other charge

imposed by MSTC. At any time within

sixty days of the filing of such rule

change, the Commission summarily may

abrogate such rule change if it appears

to the Commission that such act is

necessary or appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purposes of the Act.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.

Washington D.C. 20549. Copies of the

submissions, 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 at

the Commission’s Public Reference

Section, 450 Fifth Street, NW.,

Washington DC 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of MSTV. All submissions should

refer to File No. SR–MSTC–95–03 and

should be submitted by April 3, 1995.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–6087 Filed 3–10–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35446; File No. SR–MSRB–

94–14]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change by

the Municipal Securities Rulemaking

Board Relating to Rule G–37 on

Political Contributions and

Prohibitions on Municipal Securities

Business, and Rule G–8 on

Recordkeeping

March 6, 1995.

On August 18, 1994, the Municipal

Securities Rulemaking Board (‘‘Board’’

or ‘‘MSRB’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’ 1 a proposed rule change

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

Securities Exchange Act of 1934

(‘‘Act’’),2 and Rule 19b–4 thereunder.3

The proposed rule change amends rule

G–37 on political contributions and

prohibitions on municipal securities

business, and rule G–8 concerning

recordkeeping.4

Notice of the proposed rule change,

together with the substance of the

proposal, was provided by issuance of a

Commission release (Securities

Exchange Act Release No. 34630,

September 1, 1994) and by publication

in the Federal Register (59 FR 46682,

September 9, 1994). Eleven comment

letters were received.5 This order

approves the proposed rule change.

I. Introduction

On April 7, 1994, the Commission

approved Board rule G–37, concerning

political contributions and prohibitions

on municipal securities business.6 In

response to numerous inquiries received

by the Board concerning the application

of the rule, on May 24, 1994, the Board

filed with the Commission a Question

and Answer (‘‘Q&A’’) interpretation of

the rule.7 On June 3, 1994, the

Commission approved amendments to

the rule which (i) provide a procedure

whereby dealers may seek relief from

the rule’s prohibition on business, in

limited circumstances, and (ii) clarify

certain definitions in the rule.8 The

Board has filed with the Commission

subsequent Q&A interpretations of the

rule.9 The rule change approved herein

also is intended to address concern over

certain aspects of rule G–37.

II. Amendments to Rule G–37 and Rule

G–8

The rule change approved today

amends rule G–37 and rule G–8 by: (i)

amending the definition of municipal

finance professional by designating as a

municipal finance professional any

associated person who is both (a) a

municipal securities principal or a

municipal securities sales principal and

(b) a supervisor of any person primarily

engaged in municipal securities

representative activities or who solicits

municipal securities business; (ii)

amending the definition of municipal

finance professional so that any person

designated as a municipal finance
Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Notices 13497

10See Letter from Heather L. Ruth, President, PSA

to Diane G. Klinke, General Counsel, MSRB (July

25, 1994) (‘‘July PSA Letter’’), supra n. 6.

11However, rule G–37 does not require a firm to

monitor and record the activities of a municipal

finance professional that it no longer employs.

professional will keep that designation

for two years after the last activity

which would trigger that designation;

(iii) requiring brokers, dealers and

municipal securities dealers to disclose

all payments made to political parties,

even if the payments do not constitute

contributions as defined in the rule; and

(iv) amending the definition of ‘‘issuer’’

to exclude all issuers of separate

securities, as defined in Rule 3b–5

under the Act.

A. Supervisors of Municipal Finance

Professionals

Rule G–37(g)(iv) provides that the

term ‘‘municipal finance professional’’

means:

(A) any associated person primarily

engaged in municipal securities

representative activities, as defined in rule

G–3(a)(i);

(B) any associated person who solicits

municipal securities business, as defined in

paragraph (vii);

(C) any associated person who is a direct

supervisor of such persons up through and

including, in the case of a broker, dealer or

municipal securities dealer other than a bank

dealer, the Chief Executive Officer or

similarly situated official and, in the case of

a bank dealer, the officer or officers

designated by the board of directors of the

bank as responsible for the day-to-day

conduct of the bank’s municipal securities

dealer activities, as required pursuant to rule

G–1(a); or

(D) any associated person who is a member

of the broker, dealer or municipal securities

dealer (or, in the case of a bank dealer, the

separately identifiable department or

division of the bank, as defined in rule G–

1) executive or management committee or

similarly situated officials, if any.

Each person listed by the broker, dealer or

municipal securities dealer as a municipal

finance professional pursuant to rule G–

8(a)(xvi) is deemed to be a municipal finance

professional.

A municipal finance professional is

defined to include any direct supervisor

of a municipal finance professional up

through including, in the case of a

broker, dealer or municipal securities

dealer other than a bank dealer, the

Chief Executive Officer or similarly

situated official and, in the case of a

bank dealer, the officer or officers

designated by the board of directors of

the bank as responsible for the day-today conduct of the bank’s municipal

securities dealer activities, as required

pursuant to rule G–1(a).

For example, a person from the

corporate department will be deemed a

municipal finance professional if that

person assist the municipal department

in soliciting municipal securities

business and all direct corporate

department supervisors of that person

also will be deemed municipal finance

professionals under rule G–37,

regardless of whether that person’s

municipal securities activities are

subject to the supervision of a principal

in the municipal securities department.

Concern has been expressed that this

part of the definition unnecessarily

covers persons whose duties and

activities do not provide them with an

opportunity or incentive to make

political contributions for the purpose

of influencing the awarding of

municipal securities business by issuer

officials.

The MSRB noted in its initial filing of

rule G–37 that the definition of

municipal finance professional includes

those individuals who have a pecuniary

interest in soliciting municipal

securities business on behalf of a dealer.

It is those persons who may be in a

position to make political contributions

for the purpose of influencing the

awarding of such business by issuer

officials. Such persons could include

those in the public finance department,

as well as underwriters, traders and

institutional and retail sales persons

primarily engaged in municipal

securities representative activities.

However, a corporate department

supervisor typically does not have a

pecuniary interest in soliciting

municipal securities business, and

typically does not acquire such an

interest solely because a person

supervised by that supervisor assists the

municipal department by soliciting

work from a municipal issuer.

The MSRB believes that amending the

definition of municipal finance

professional to designate as a municipal

finance professional only a supervisor of

any person primarily engaged in

municipal securities representative

activities or who solicits municipal

securities business who also is a

municipal securities principal or a

municipal securities sales principal will

facilitate compliance with rule G–37.

Thus, in the example given above, the

corporate department supervisors would

not be included in the definition of

municipal finance professional.

The MSRB continues to believe that if

a retail sales person becomes a

municipal finance professional by virtue

of soliciting municipal securities

business, then the municipal securities

principal responsible for supervising

that person’s municipal securities

activities should be designated a

municipal finance professional. In most

cases, this would include the sales

person’s branch manager (a municipal

securities sales principal). Such

supervisory personnel continue to be

included within the definition of

municipal finance professional because

the MSRB is concerned that retail sales

persons may solicit municipal securities

business at the request of, or at least

with the knowledge of, their

supervisors. Thus, the amendment is

intended to ensure that, if retail sales

persons are soliciting municipal

securities business, the supervisors of

such persons also are deemed to be

municipal finance professionals.

Finally, the definition of municipal

finance professional has been amended

to clarify that the supervisors of the

municipal securities principals and

municipal securities sales principals

included within the definition also are

deemed to be municipal finance

professionals.

B. Designation as a Municipal Finance

Professional

The MSRB has been asked whether a

dealer can establish its own standards

under which someone who solicits

municipal securities business could

relinquish municipal finance

professional status upon completing the

solicitation activity.10 The rule change

approved today amends rule G–37(g)(iv)

to provide that each person designated

by a dealer as a municipal finance

professional shall retain this designation

for two years after the last activity or

position which gave rise to the

designation. For instance, if an

associated person is designated a

municipal finance professional due to

that person’s solicitation activities, then

that designation shall extend for two

years from the date of the particular

solicitation. Moreover, if this person

continues to solicit municipal business,

then each such solicitation triggers a

new two-year period. Thus, if a

municipal finance professional wants to

divest himself of this designation, he

must forego all soliciting of municipal

business for two years (as well as avoid

the other situations, set forth in rule G–

37(g)(iv), giving rise to the designation

of municipal finance professional). So

too, if an institutional sales person

primarily engaged in municipal

securities representative activities is

transferred to the corporate department,

such person’s contributions to officials

of issuers and payments to political

parties must be recorded for two years

after such transfer.11 The amendment is

intended to ensure that contributions

and payments by municipal finance

professionals are not being made to

influence the awarding of municipal
13498 Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Notices

12Pursuant to rule G–37, a contribution is defined

as ‘‘any gift, subscription, loan advance, or deposit

of money or anything of value made: (A) for the

purpose of influencing any election for federal, state

or local office; (B) for payment of debt incurred in

connection with any such election; or (C) for

transition or inaugural expenses incurred by the

successful candidate for state or local office.’’ Thus,

by definition, any funds given to corporate issuers

would not constitute a ‘‘contribution’’, since such

corporations are not the issuers or issuer officials

contemplated by the rule.

securities business. The amendment

also will allow dealers, after this twoyear period, to remove these persons

from their list of municipal finance

professionals.

C. Contributions and Other Payments

Made to Political Parties

Contributions to political parties do

not trigger rule G–37’s prohibition on

business. Such contributions, however,

are subject to the rule’s recordkeeping

and reporting provisions, as set forth in

rule G–8(a)(xvi). These disclosure

requirements are intended to help

ensure that dealers do not circumvent

the prohibition on business in the rule

by indirect contributions to issuer

officials through contributions to state

or local political parties. For example, if

a contribution to a political party is

earmarked or known to be provided to

an official or officials of a particular

issuer, then the dealer would violate the

rule’s proscription against indirect

violations, thereby triggering the twoyear prohibition on business with that

issuer.

Certain dealers and other industry

participants have notified the MSRB

that certain political parties currently

are engaging in fundraising practices

which, according to these political

parties, do not invoke application of

rule G–37. For example, some of these

entities currently are urging dealers to

make payments to political parties

earmarked for expenses other than

political contributions (such as

administrative expenses or voter

registration drives). Since these

payments would not constitute

‘‘contributions’’ under the rule, the

recordkeeping and reporting provisions

would not apply. The MSRB is

concerned, based upon this information,

that the same pay-to-play pressures that

motivated the Board to adopt rule G–37

may be emerging in connection with the

fundraising practices of certain political

parties described above.

The purpose of those disclosure

requirements in rule G–37 pertaining to

political parties is to ensure that funds

contributed to political parties by

dealers, Political Action Committees

(‘‘PACs’’), municipal finance

professionals and executive officers do

not represent attempts to make indirect

contributions to issuer officials, in

contravention of rule G–37. The rule

change approved today amends the

recordkeeping and reporting provisions

of rule G–37 (as set forth in rule G–

8(a)(xvi)) to require dealers to record

and disclose all payments made to

political parties. The term ‘‘payment’’ is

defined as any gift, subscription, loan,

advance or deposit of money or

anything of value. This definition is

derived from the definition of

‘‘contribution’’ in rule G–37(g)(i), but

does not include the limits on the

purposes for which such money is

given, as currently set forth in the

definition of contribution.

Thus, the amendment will require

dealers to record and report any

payments to political parties by dealers,

PACs, municipal finance professionals

and executive officers, regardless of

whether those payments constitute

contributions. These disclosure

requirements are intended to assist in

severing any connection between

payments to political parties and the

awarding of municipal securities

business. The amendment is not

intended to restrict the personal

volunteer work of municipal finance

professionals for political parties.

D. Definition of Issuer

Under rule G–37, the term ‘‘issuer’’ is

defined as any governmental issuer

specified in Section 3(a)(29) of the Act

(i.e., a state or any political subdivision

thereof, or any agency or

instrumentality of a state or any

political subdivision thereof, or any

municipal corporate instrumentality of

one or more states) and the issuer of any

separate security, including a separate

security as defined in Rule 3b–5 under

the Act. In most instances, the issuers of

separate securities are corporate obligors

of industrial revenue bonds and bank

issuers of letters of credit.

As noted above, rule G–37 was

adopted in order to cleanse the

municipal securities market of pay-toplay pressures. However, pay-to-play

pressures do not exist when the issuer

of a separate security is a corporate

obligor of industrial revenue bonds or a

bank issuer of a letter of credit. The

Board itself recognized this when it

noted in its May 1994 Q & A that, when

filing Form G–37, dealers do not have to

include corporate issuers in industrial

development bond issues because no

contributions (as defined in rule G–37)

would be made to such corporations.12

Therefore, the rule change amends the

rule G–37 definition of issuer by

omitting issuers of separate securities

from the definition of issuer.

III. Comment Letters

A. Supervisors of Municipal Finance

Professionals

Chemical and Artemis express

unqualified support for designating as

municipal finance professionals only

those supervisors of municipal finance

professionals who are also municipal

securities principals or municipal

securities sales principals. The PSA

Letter also expresses general support for

this amendment. The Edwards Letter

expresses support for the views

expressed in the PSA Letter; therefore,

Edwards generally supports this

amendment.

Schwartz opposes this amendment.

The Schwartz Letter asserts that the

amendment would ‘‘open a loophole

further’’ because political fundraising

has been happening across departments.

The Commission notes that the

amendment does not purport to exclude

all supervisors of municipal finance

professionals. Furthermore, the MSRB

stated that the amendment was designed

to cover situations in which retail sales

persons are soliciting municipal

securities business at the request of, or

at least with the knowledge of, their

supervisors.

The Arter & Hadden Letter also

expresses opposition to this

amendment. The Arter & Hadden Letter

reasons that the supervisor of a retail

sales person involved in municipal

securities solicitation activity may not

be involved in supervising that person’s

solicitation activity. The Arter &

Hadden Letter argues that the MSRB

was correct to amend rule G–37 so that

a supervisor of persons primarily

engaged in municipal securities

representative activities or who solicit

municipal securities business is deemed

a municipal securities professional only

if that supervisor is also a municipal

securities principal or a municipal

securities sales principal. However, the

Arter & Hadden Letter criticizes the

proposed amendment because, it

asserts, the MSRB states that it would

deem a branch manager and a branch

manager’s supervisor to be municipal

finance professionals if a retail sales

person in that branch office was

soliciting municipal securities business.

Arter & Hadden asserts that a branch

manager does not have the background

or expertise to supervise the solicitation

activities of a retail sales representative;

therefore, a branch manager should not

be restricted in the same manner as a

person who does have the background

and expertise to supervise the

solicitation activities of a retail sales

representative.12
Federal Register / Vol. 60, No. 48 / Monday, March 13, 1995 / Notices 13499

13The Commission notes that the amendment

does not add any compliance burden that is not

imposed under the current version of rule G–37. 14 15 U.S.C. § 78o–4.

Smith Barney also opposes this

amendment. The Smith Barney Letter

objects to the MSRB deeming a branch

manager and a branch manager’s

supervisor to be municipal finance

professionals if a retail sales person in

that branch office was soliciting

municipal securities business. It notes

that the MSRB is concerned about

situations in which retail sales persons

are soliciting municipal securities

business at the request of, or at least

with the knowledge of, their

supervisors; Smith Barney does not

consider those reasons sufficient to

justify the apparent breadth of the

amendment. Smith Barney states that a

simpler approach would be to interpret

solicitation as asking others to solicit,

and that the MSRB should not be

concerned about supervisors who

simply know that their sales persons are

soliciting municipal securities business.

The Commission believes that, while

Smith Barney may be correct in theory,

as a practical matter, Smith Barney’s

solution will make enforcement of the

rule much more difficult. It believes that

the practical difficulties of enforcing the

rule if it were amended as Smith Barney

suggests outweigh any compliance

burdens imposed by the amendment.

The Commission thus believes that the

need for a prophylactic provision also

outweighs the concerns expressed by

Arter & Hadden concerning the burden

imposed upon branch managers.13

B. Designation as a Municipal Finance

Professional

Chemical and Artemis also express

support for requiring each person

designated by a dealer as a municipal

finance professional to retain this

designation for two years after the last

activity or position which gave rise to

the designation. The Chemical Letter

states that the two year designation

period matches the two year

disqualification length contained in rule

G–37(b) and provides clarity.

NBD opposes this amendment. NBD

states that this amendment will create

an undue reporting burden and would

be unworkable from a supervisory

standpoint. The NBD Letter reasons that

if the designated municipal finance

professional left the firm at which the

professional engaged in the activity that

gave rise to the designation, then that

firm no longer would maintain any

supervisory control over that individual,

and therefore, any political activities of

the individual would no longer benefit

that firm and would be impossible to

monitor. The NBD Letter also argues

that if an employee is transferred to

another department, then supervisory

authority is severed. NBD regards it as

‘‘unlikely’’ that an employee would be

transferred to another department in

order to circumvent rule G–37.

With respect to the issue of

monitoring municipal finance

professionals who have left a firm, the

Commission notes that rule G–37 does

not require a firm to monitor the

activities of a municipal finance

professional that it no longer employs.

With respect to the issue of whether a

firm receives any continuing benefits

from a municipal finance professional

no longer employed by that firm, the

Commission believes that whether or

not a firm benefits from the political

activities of an individual that occur

after the individual leaves the firm, or

is transferred, a firm may continue to

enjoy the benefits that flow from that

employee’s activities even after that

employee left the firm or was

transferred. Rule G–37 reflects a

reasoned judgment that certain activities

may corrupt the awarding of municipal

securities business, not only at the time

of the activity, but for a certain period

of time thereafter.

C. Miscellaneous Comments

Chemical and Artemis expressed

support for the remainder of the rule

change.

The PSA believes that the MSRB

should further amend rule G–37 to:

• establish a threshold percentage of

commissions below which a registered

representative would not be considered

a municipal finance professional;

• establish guidelines concerning

how frequently they must review their

records to identify registered

representatives as municipal finance

professionals;

• clarify that the MSRB will not

retroactively apply the municipal

finance professional designation to

persons who were not initially

identified by the broker, dealer or

municipal securities dealer as a

registered representative, but

subsequently engage in activities that

would trigger application.

• codify procedures for brokers,

dealers and municipal securities dealers

to follow to ensure that municipal

finance professionals are being

identified.

The Commission believes that the

MSRB may address these comments in

the context of a separate proposed rule

change filed with the Commission. It

does not believe that these comments

must be addressed in the context of this

rule change.

IV. Discussion and Findings

The Commission finds that the rule

change is consistent with the provisions

of Section 15B(b)(2)(C) 14 of the Act,

which provides that the Board’s rules

shall be designed to prevent fraudulent

and manipulative acts and practices, to

promote just and equitable principles of

trade, to foster cooperation and

coordination with persons engaged in

regulating, clearing, settling, processing

information with respect to, and

facilitating transactions in municipal

securities, 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 Commission

believes that the rule change is in the

public interest and removes

impediments to and perfects the

mechanism of a free and open market in

municipal securities in that the

amendments: (i) tailor the application of

rule G–37 to those persons who may be

in a position to make political

contributions for the purpose of

influencing the awarding of municipal

securities business by issuer officials;

(ii) require disclosure of certain

payments which may have the effect of

influencing the awarding of municipal

securities business; and (iii) eliminate

the restrictions imposed by rule G–37

with respect to certain transactions and

practices which are not likely to

influence the awarding of municipal

securities business by issuer officials.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act, that File No.

SR–MSRB–94–14 be, and hereby is,

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority, 17 CFR 200.30–3(a)(12).

Jonathan G. Katz,

Secretary.

[FR Doc. 95–6029 Filed 3–10–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–20941; No. 812–9232]

Security Benefit Life Insurance

Company, et al.

March 6, 1995.

AGENCY: Securities and Exchange

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

ACTION: Notice of Application for an

Order under the Investment Company

Act of 1940 (the ‘‘1940 Act’’).

APPLICANTS: Security Benefit Life

Insurance Company (‘‘SBL’’), T. Rowe

Price Variable Annuity Account (‘‘SBL

Separate Account’’), Pioneer National