[Federal Register Volume 75, Number 189 (Thursday, September 30, 2010)]
[Notices]
[Pages 60488-60490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24510]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62993, File No. SR-MSRB-2010-06]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Granting Approval of Proposed Rule Change, as Modified by 
Amendment No. 1 Thereto, To Establish a Subscription To the Information 
Collected by the MSRB's Short-Term Obligation Rate Transparency 
(``SHORT'') System

September 24, 2010.

I. Introduction

    On August 10, 2010, the Municipal Securities Rulemaking Board 
(``MSRB''), filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities

[[Page 60489]]

Exchange Act of 1934 (``Exchange Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to establish a subscription to 
the information collected by the MSRB's Short-term Obligation Rate 
Transparency (``SHORT'') System. The proposed rule change was published 
for comment in the Federal Register on August 23, 2010.\3\ The 
Commission received no comment letters about the proposed rule change. 
On September 16, 2010, the MSRB filed with the Commission, pursuant to 
Section 19(b)(1) of the Exchange Act \4\ and Rule 19b-4 thereunder,\5\ 
Amendment No. 1 to the proposed rule change.\6\ This order approves the 
proposed rule change as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 62734 (August 17, 
2010), 75 FR 51864 (the ``original proposed rule change'').
    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ In Amendment No. 1, the MSRB partially amends the text of 
the original proposed rule change to correct a typographical error 
in the definition of the data element Liquidity Facility Type. In 
all other respects, the original proposed rule change remains as 
originally filed. This is a technical amendment and is not subject 
to notice and comment.
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II. Description of the Proposed Rule Change, As Modified by Amendment 
No. 1 to the Proposed Rule Change

    The SHORT System is a facility of the MSRB for the collection and 
dissemination of information about securities bearing interest at 
short-term rates. Currently, these securities consist of Auction Rate 
Securities (``ARS'') and Variable Rate Demand Obligations (``VRDOs''). 
The proposed rule change consists of a proposal to establish a 
subscription to the information collected by the SHORT System. The data 
stream subscription would be provided through a Web service and would 
be made available for an annual fee of $10,000.\7\
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    \7\ The proposed subscription price would cover a portion of the 
administrative, technical and operating costs of the SHORT 
subscription service but would not cover all costs of such 
subscription service or of the SHORT System. The MSRB has proposed 
establishing the subscription price at a commercially reasonable 
level.
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    Information disseminated from the SHORT System also is posted to 
the MSRB's Electronic Municipal Market Access (EMMA) Web portal 
pursuant to the EMMA short-term obligation rate transparency service. 
Such information would be made available to subscribers simultaneously 
with the availability of such information to the EMMA Web portal. The 
subscription service would make the information collected by the SHORT 
System available to market participants for re-dissemination and for 
use in creating value-added products and services. Such re-
dissemination and third-party use would provide market participants, 
including investors and the general public, additional avenues for 
obtaining the information collected by the SHORT System and would make 
additional tools available for making well-informed investment 
decisions.
    Data elements with respect to the SHORT subscription service that 
would be provided through the data stream would be set forth in the 
SHORT System Subscriber Manual posted on the MSRB Web site. The SHORT 
System Subscriber Manual would provide a complete, up-to-date listing 
of all data elements made available through the SHORT subscription 
service, including any additions, deletions or modifications to 
disseminated data elements, detailed definitions of each data element, 
specific data format information, and information about technical data 
elements to support transmission and data-integrity processes between 
the SHORT System and subscribers.
    Subscriptions would be provided through computer-to-computer data 
streams utilizing XML files for data. Appropriate schemas and other 
technical specifications for accessing the Web services through which 
the data stream will be provided would be set forth in the SHORT System 
Subscriber Manual posted on the MSRB Web site.
    The MSRB would make the SHORT subscription service available on an 
equal and non-discriminatory basis. Subscribers would be subject to all 
of the terms of the subscription agreement to be entered into between 
the MSRB and each subscriber, including proprietary rights of third 
parties in information provided by such third parties that is made 
available through the subscription. The MSRB would not be responsible 
for the content of the information submitted by submitters that is 
distributed to subscribers of the SHORT subscription service.
    The MSRB has requested that the proposed rule change be made 
effective on September 30, 2010.

III. Discussion and Commission Findings

    The Commission has carefully considered the proposed rule change 
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 MSRB \8\ and, in particular, the 
requirements of Section 15B(b)(2)(C) of the Exchange Act \9\ 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.\10\ In 
particular, the Commission believes that the SHORT subscription service 
would serve as an additional mechanism by which the MSRB works toward 
removing impediments to and helping to perfect the mechanisms of a free 
and open market in municipal securities. The subscription service would 
make the information collected by the SHORT System available to market 
participants for re-dissemination and for use in creating value-added 
products and services. Such re-dissemination and third-party use would 
provide market participants, including investors and the general 
public, additional avenues for obtaining the information collected by 
the SHORT System and would make additional tools available for making 
well-informed investment decisions. Broad access to the information 
collected by the SHORT System, in addition to the public access through 
the EMMA Web portal, should further assist in preventing fraudulent and 
manipulative acts and practices by improving the opportunity for public 
investors to access material information about Auction Rate Securities 
and Variable Rate Demand Obligations.
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    \8\ 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).
    \9\ 15 U.S.C. 78o 4(b)(2)(C).
    \10\ Id.
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    Furthermore, broader re-dissemination and third-party use of the 
information collected by the SHORT System should promote a more fair 
and efficient municipal securities market in which transactions are 
effected on the basis of material information available to all parties 
to such transactions, which should allow for fairer pricing of 
transactions based on a more complete understanding of the terms of the 
securities (including any changes thereto).

[[Page 60490]]

IV. 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 MSRB and, in 
particular, the requirements of Section 15B(b)(2)(C) of the Exchange 
Act \11\ and the rules and regulations thereunder. The proposal will 
become effective on September 30, 2010, as requested by the MSRB.
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    \11\ Id.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Exchange Act,\12\ that the proposed rule change (SR-MSRB-2010-06), as 
amended, be, and it hereby is, approved.
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    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-24510 Filed 9-29-10; 8:45 am]
BILLING CODE 8010-01-P