[Federal Register Volume 61, Number 128 (Tuesday, July 2, 1996)]
[Notices]
[Pages 34463-34464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16773]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37361; File No. SR-MSRB-96-4]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Municipal Securities 
Rulemaking Board Relating to Fees for Annual Subscription and Backlog 
Document Collections of Its Official Statement/Advance Refunding 
Document Subsystem of the Municipal Securities Information Library

June 25, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on May 28, 
1996, 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-96-4). The proposed 
rule change is described in Items, I, II, and III below, which Items 
have been prepared by the Board. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Board is filing herewith a proposed rule change to change 
certain fees relating to the operation of its Official Statement/
Advance Refunding Document (``OS/ARD'') subsystem of the Municipal 
Securities Information Library <SUP>TM (``MSIL <SUP>TM '') system.\1\ 
The Board is changing from $12,000 to $14,000 (plus postage or delivery 
charges) the annual subscription fee for magnetic tapes of images of 
official statements and advance refunding documents. In addition, the 
Board is establishing a price of $9,000 (plus delivery or postage 
charges) for its 1995 document collection of official statements and 
refunding documents, sold as a ``backlog'' collection.
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    \1\ MUNICIPAL SECURITIES INFORMATION LIBRARY and MSIL are 
registered trademarks of the Board. The MSIL system, which was 
approved in Securities Exchange Act Release No. 29298 (June 13, 
1991) 56 FR 28194, is a central facility through which information 
about municipal securities is collected, stored and disseminated.

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[[Page 34464]]

II. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    In its filing with the Commission, the Board included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
texts of these statements may be examined at the places specified in 
item IV below. The Board has prepared summaries, set forth in 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

1. Purpose
    The OS/ARD subsystem, which was activated on April 20, 1992, is a 
central electronic facility through which information collected and 
stored pursuant to MSRB rule G-36 is made available electronically and 
in paper form to market participants and information vendors.\2\ Since 
1992, the annual subscription fee for daily tapes of images of current 
year documents from the OS/ARD system has been $12,000.\3\ The Board 
proposes to increase the annual subscription fee to $14,000 because of 
the rise in the cost of operation of the system since the subscription 
fee was first instituted.
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    \2\ Rule G-36 requires underwriters to provide copies of final 
official statements and advance refunding documents within certain 
specified time frames for most new issues issued since January 1, 
1990.
    \3\ This fee was filed with the Commission. See Securities 
Exchange Act Release No. 30306 (Jan. 30, 1992) 57 FR 4657.
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    The fees for backlog document collections are substantially less 
than fees for an annual subscription because an annual subscription 
requires the Board to send a computer tape to the subscriber each 
business day, but a backlog collection requires fewer tapes.\4\ The 
Board is establishing a price of $9,000 (plus delivery or postage 
charges) for the 1995 backlog collection.
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    \4\ Currently, several business day's worth of documents are on 
each tape in an annual collection. The backlog fee plus delivery 
costs for 1994 is $7,000; 1993 is $9,000; 1992 is $7,000; 1991 is 
$8,000; 1990 is $6,000. These fees were filed with the Commission. 
See Securities Exchange Act Release Nos. 35848 (June 14, 1995) 60 FR 
32817 (1994 fee); 32482 (June 16, 1993) 58 FR 34115 (1992 and 1990 
fees); 34602 (Aug. 25, 1994) 59 FR 45319 (1993 and 1991 fees). The 
fees for the backlog collections vary based on the number of 
documents received and processed in any given year.
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    The daily tape subscription service currently has eight 
subscribers. The $14,000 yearly subscription fee for the daily tape of 
images will not cover the complete costs of operation of the OS/ARD 
system. In its prior filings with the Commission, the Board stated that 
it intends to use its general revenues to help fund collecting, 
indexing and storing the OS/ARD subsystem's documents. However, the 
Board states its intention that the costs of producing and 
disseminating magnetic tapes (and paper copies) would be completely 
covered by user fees.\5\ The Board is increasing the annual 
subscription fee and establishing the 1995 backlog fee to defray its 
costs of disseminating the collection tapes. This is consistent with 
the Commission's policy that self-regulatory organizations' fees be 
based on expenses incurred in providing information to the public. The 
Board believes that employing cost-based prices is in the public 
interest since it will ensure that a complete collection of vital 
information will be available, at fair and reasonable prices, for the 
life of the municipal securities.
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    \5\ See Securities Exchange Act Release No. 28197 (July 12, 
1990) 55 FR 29436.
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2. Statutory Basis
    The Board believes the proposed rule change is consistent with 
Section 15B(b)(2)(C) of the Act, which requires, in pertinent part, 
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 MSIL 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 believes that the annual subscription fee and the 1995 
backlog fee are fair and reasonable in light of the costs associated 
with disseminating the information, and that the services provided by 
the MSIL system are available on reasonable and nondiscriminatory terms 
to any interested person.

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

    The rule change is effective upon filing pursuant to Section 
19(b)(3)(A) of the Act, because the proposal is ``establishing or 
changing a due, fee or other charge.'' At any time within sixty days of 
filing of the proposed rule change, the Commission may summarily 
abrogate such rule change if it appears to the Commission that such 
action is necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
Copies of the 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 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-96-4 and should be 
submitted by July 23, 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. 96-16773 Filed 7-1-96; 8:45 am]
BILLING CODE 8010-01-M