43584 Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 

31 15 U.S.C. 78s(b)(3)(A)(iii). 

32 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

33 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Exchange does not believe that the rules 

applicable to such process is an area 

where options exchanges should 

compete, but rather, that all options 

exchanges should have consistent rules 

to the extent possible. Particularly 

where a market participant trades on 

several different exchanges and an 

erroneous trade may occur on multiple 

markets nearly simultaneously, the 

Exchange believes that a participant 

should have a consistent experience 

with respect to the nullification or 

adjustment of transactions. To that end, 

the selection and implementation of a 

TP Provider utilized by all options 

exchanges will further reduce the 

possibility that participants with 

potentially erroneous transactions that 

span multiple options exchanges are 

handled differently on such exchanges. 

Similarly, the proposed ability to 

consider quotations invalid on another 

options exchange if ultimately 

originating from a party to a potentially 

erroneous transaction on the Exchange 

represents a proposal intended to 

further foster cooperation by the options 

exchanges with respect to market 

events. The Exchange understands that 

all other options exchanges either have 

or intend to file proposals that are 

substantially similar to this proposal. 

The Exchange does not believe that 

the proposed rule change imposes a 

burden on intramarket competition 

because the proposed provisions apply 

to all market participants equally. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 31 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.32

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the 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 email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2017–101 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2017–101. This 

file number should be included on the 

subject line if email 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 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. 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– 

NYSEArca–2017–101, and should be 

submitted on or before October 10, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19710 Filed 9–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81579; File No. SR– 

NASDAQ–2017–088] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Amend Rule 4703(a) To Allow Members 

To Designate When an Order With a 

RTFY or SCAN Routing Order Attribute 

Will Be Activated 

September 12, 2017. 

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 August 

30, 2017, 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 and II 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 4703(a) to allow members to 

designate when an Order with a RTFY 

or SCAN routing Order Attribute will be 

activated. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaq.cchwallstreet.com, at 

the principal office of the Exchange, and 

at the Commission’s Public Reference 

Room. 


sradovich on DSKBBY8HB2PROD with NOTICES
Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43585 

3The term ‘‘Order’’ means an instruction to trade 

a specified number of shares in a specified System 

Security submitted to the Nasdaq Market Center by 

a Participant. An ‘‘Order Type’’ is a standardized 

set of instructions associated with an Order that 

define how it will behave with respect to pricing, 

execution, and/or posting to the Nasdaq Book when 

submitted to Nasdaq. An ‘‘Order Attribute’’ is a 

further set of variable instructions that may be 

associated with an Order to further define how it 

will behave with respect to pricing, execution, and/ 

or posting to the Nasdaq Book when submitted to 

Nasdaq. The available Order Types and Order 

Attributes, and the Order Attributes that may be 

associated with particular Order Types, are 

described in Rules 4702 and 4703. One or more 

Order Attributes may be assigned to a single Order; 

provided, however, that if the use of multiple Order 

Attributes would provide contradictory instructions 

to an Order, the System will reject the Order or 

remove non-conforming Order Attributes. See Rule 

4701(e). 

4See Rule 4758(a)(1)(A)(v)b. 

5 Id. 

6 Id. 

7See Rule 4758(a)(1)(A)(iv). 

8 Id. 

9See Rule 4703(a). 

10The term ‘‘Pre-Market Hours’’ means the period 

of time beginning at 4:00 a.m. ET and ending 

immediately prior to the commencement of Market 

Hours. The term ‘‘Market Hours’’ means the period 

of time beginning at 9:30 a.m. ET and ending at 4:00 

p.m. ET (or such earlier time as may be designated 

by Nasdaq on a day when Nasdaq closes early). The 

term ‘‘Post-Market Hours’’ means the period of time 

beginning immediately after the end of Market 

Hours and ending at 8:00 p.m. ET. The term 

‘‘System Hours’’ means the period of time 

beginning at 4:00 a.m. ET and ending at 8:00 p.m. 

ET (or such earlier time as may be designated by 

Nasdaq on a day when Nasdaq closes early). See 

Rule 4701(g). 

11 Id. 

12 Id. 

13 Id. 

14 15 U.S.C. 78f(b). 

15 15 U.S.C. 78f(b)(5). 

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 

Exchange 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 text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections 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 Exchange is proposing to amend 

Rule 4703(a) to allow members to 

designate when an Order with a RTFY 

or SCAN routing Order Attribute 3 will 

be activated. RTFY is a routing option 

available for an order that qualifies as a 

Designated Retail Order under which 

orders check the System for available 

shares only if so instructed by the 

entering firm and are thereafter routed 

to destinations on the System routing 

table.4 If shares remain unexecuted after 

routing, they are posted to the book.5

Once on the book, should the order 

subsequently be locked or crossed by 

another market center, the System will 

not route the order to the locking or 

crossing market center.6 RTFY is 

designed to allow orders to participate 

in the opening, reopening and closing 

process of the primary listing market for 

a security. SCAN is a routing option 

under which orders check the System 

for available shares and simultaneously 

route the remaining shares to 

destinations on the System routing 

table. If shares remain un-executed after 

routing, they are posted on the book.7

Once on the book, should the order 

subsequently be locked or crossed by 

another market center, the System will 

not route the order to the locking or 

crossing market center.8

Rule 4703 provides the various Order 

Attributes that may be assigned to 

Orders entered into the System. All 

Orders have a Time-in-Force,9 during 

which the Order is active. During PreMarket Hours,10 the Exchange has 

historically provided a member two 

options concerning when an Order with 

a RTFY or SCAN Order Attribute may 

become active—upon entry or at single 

designated time, which is currently 8:00 

a.m. ET. Orders with a RTFY or SCAN 

Order Attribute entered prior to 8:00 

a.m. ET that are not designated to 

activate immediately are held by the 

System until 8:00 a.m. ET, at which 

time they become active. During Market 

Hours 11 and Post-Market Hours,12

Orders with a RTFY or SCAN Order 

Attribute may only become active upon 

entry. The Exchange is proposing to 

provide members with greater control 

over their Orders with RTFY and SCAN 

Order Attributes by allowing members 

to designate when such Orders become 

active at any point during the trading 

day. Accordingly, the Exchange is 

amending Rule 4703(a) and paragraph 

(7) thereunder to make it clear that 

Orders with a RTFY or SCAN Order 

Attribute may either be active upon 

entry or at a time designated by the 

member. The Exchange is also clarifying 

under Rule 4703(a)(7) that Orders with 

a RTFY or SCAN Order Attribute may 

be designated to activate at any time 

during System Hours, which 

encompasses the full trading day on 

Nasdaq, on the same day.13 Thus, an 

Order with a RTFY or SCAN Order 

Attribute not designated to become 

active immediately may only be 

designated to activate during System 

Hours of the day on which the Order 

was entered. 

The Exchange will implement the 

proposed changes upon approval by the 

Commission. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,14 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,15

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest, by 

providing members with greater control 

over their Orders with a RTFY or SCAN 

Order Attribute and more flexibility to 

carry out their investment strategies. 

Currently, market participants are 

limited by the time at which their RTFY 

and SCAN Orders may activate—either 

upon entry or at 8:00 a.m. ET. The 

proposed rule change removes this 

limitation by allowing a member to 

designate the precise time at which it 

wishes the Order to become active. The 

Exchange notes that a member may 

currently replicate what is being 

proposed by entering an Order with a 

RTFY or SCAN Order Attribute 

precisely at the time that they wish it to 

become active during the trading day. 

The proposed change merely frees 

members from having to time their 

Order entry to achieve their investment 

goals. Currently, members may cancel 

an Order with a RTFY or SCAN Order 

Attribute at any time before it activates 

at 8 a.m. ET. Under the proposed 

change, members may cancel their 

inactive Orders with a RTFY or SCAN 

Order Attribute at any time, thus 

allowing them to react to market 

conditions that may cause them to 

violate their obligation of best execution 

to their customers should the Order 

activate and execute. Similarly, 

members may cancel their active Orders 

with RTFY or SCAN and enter new 

RTFY or SCAN Orders to activate at a 

time that the members believe will 

better satisfy their obligation of best 

execution. 

With this change, and as is currently 

the case, all Nasdaq members may use 

the SCAN Order Attribute, and all 

Nasdaq members may use the RTFY 

Order Attribute if they meet its 


sradovich on DSKBBY8HB2PROD with NOTICES
43586 Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 

16As set forth in Rule 4758(a)(1)(A), RTFY is a 

routing option available for an order that qualifies 

as a Designated Retail Order. Rule 7018 defines a 

Designated Retail Order as an agency or riskless 

principal order that meets the criteria of FINRA 

Rule 5320.03 and that originates from a natural 

person and is submitted to Nasdaq by a member 

that designates it pursuant to this rule, provided 

that no change is made to the terms of the order 

with respect to price or side of market and the order 

does not originate from a trading algorithm or any 

other computerized methodology. 

17RTFY, by definition, is entered on behalf of 

retail customers, whereas the Orders with a SCAN 

Order Attribute are entered on behalf of a wide 

array of customer, including retail customers. 

Consequently, although the proposed change will 

relieve burdens placed on members using both 

RTFY and SCAN, it will beneficially impact SCAN 

Orders more so than RTFY Orders. 

requirements.16 Thus, the proposed 

change will benefit all members that 

may use, or are eligible to use, SCAN or 

RTFY Order Attributes by removing a 

limitation, and by providing more 

choice over their market participation. 

The Exchange believes that it is 

equitable to limit the proposed change 

to RTFY or SCAN Orders because of the 

nature of the members that use these 

Order types with the current order 

activation delay. Currently, members 

that enter Orders with a RTFY or SCAN 

Order Attribute with delayed activation 

tend to represent customers on an 

agency basis—for example, individual 

retail investors.17 The Exchange has 

become aware that the proposed 

functionality would ease burdens 

associated with entering members’ 

agency Orders with these Routing Order 

Attributes. Consequently, the Exchange 

is proposing to apply the proposed 

change to Orders with a RTFY or SCAN 

Order Attribute. Should the Exchange 

become aware of other Routing Order 

Attributes that would also benefit from 

the flexibility proposed herein, it will 

consider filing a rule change to expand 

the time during which such Orders may 

be designated to become active. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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. All Nasdaq 

members may use the SCAN Order 

Attribute, and Nasdaq members may use 

the RTFY Order Attribute if they meet 

its requirements. Any member that may 

use, or is eligible to use, Orders with 

RTFY or SCAN Order Attributes may 

avail itself of the proposed change. The 

Exchange believes that the proposed 

rule change promotes competition by 

removing a restriction on the use of two 

Order Attributes, thereby making the 

process of entering Orders with RTFY 

and SCAN Order Attributes more 

efficient and less burdensome on 

members. Members may not have 

functionality that allows them to send 

large numbers of RTFY and SCAN 

Orders to the Exchange for execution at 

a designated time. As discussed above, 

such members must either enter RTFY 

and SCAN Orders for immediate 

execution or send them to the Exchange 

for execution at 8 a.m. ET, relying on 

the Exchange to queue and activate 

these Orders at this single time. The 

Exchange is proposing to allow such 

queuing and activation done by the 

Exchange to occur at any time, since the 

Exchange can better handle the large 

number of queued Orders received by 

certain members. Consequently, the 

proposed change eliminates the burden 

that affects these members, but will also 

allow any other member that currently 

queues RTFY and SCAN Orders for 

activation at a precise time to use the 

Exchange for this functionality instead. 

Should the Exchange find a similar 

burden placed on members using other 

Orders, it may extend the proposed 

activation functionality to other such 

Orders through rulemaking. The 

Exchange notes that providing members 

greater efficiency and control over their 

trading may make Nasdaq a more 

attractive venue, which may, in turn, 

cause other markets to consider similar 

changes that would remove unnecessary 

restrictions to the benefit of their 

members. For these reasons, the 

Exchange believes that the proposed 

change will not impose any burden on 

competition, but rather will reduce 

burdens, as described above. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the 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 email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2017–088 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–NASDAQ–2017–088. This 

file number should be included on the 

subject line if email 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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. 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– 

NASDAQ–2017–088 and should be 

submitted on or before October 10, 

2017. 


sradovich on DSKBBY8HB2PROD with NOTICES
Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43587 

18 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Exchange Act Release No. 19743 (May 9, 1983), 

48 FR 21690–01 (May 13, 1983) (SR–MSRB–82–11). 4Exchange Act Release No. 18959 (Aug. 13, 

1982), 47 FR 36737–03 (Aug. 23, 1982) (SR–MSRB– 

82–11). 5These eight items are contained in current Rule 

G–34(a)(i)(A)(4)(a) through (h) and were part of 

CUSIP Service Bureau’s original standards for 

issuing CUSIP numbers. These items are: 

(a) Complete name of issue and series 

designation, if any; 

(b) interest rate(s) and maturity date(s) (provided, 

however, that, if the interest rate is not established 

at the time of application, it may be provided at 

such time as it becomes available); 

(c) dated date; 

(d) type of issue (e.g., general obligation, limited 

tax or revenue); 

(e) type of revenue, if the issue is a revenue issue; 

(f) details of all redemption provisions; 

(g) the name of any company or other person in 

addition to the issuer obligated, directly or 

indirectly, with respect to the debt service on all or 

part of the issue (and, if part of the issue, an 

indication of which part); and 

(h) any distinction(s) in the security or source of 

payment of the debt service on the issue, and an 

indication of the part(s) of the issue to which such 

distinction(s) relate. 

6CUSIP Number Eligibility Standards and 

Requirements to Obtain CUSIP Numbers, MSRB 

Reports, Vol. 12, No. 2 (Jul. 1992) (emphasis in 

original). In this notice, the MSRB defined ‘‘private 

placement’’ to mean ‘‘any new issue of municipal 

securities that is ‘placed’ by a dealer, on an agency 

basis, with one or more investors.’’ 

7See Exchange Act Release No. 50773 (Dec. 1, 

2004), 69 FR 70731–02 (Dec. 7, 2004) (SR–MSRB– 

2004–08). 8 Id. See also MSRB Notice 2008–28 (Jun. 27, 

2008) (‘‘Rule G–34 defines ‘underwriter’ very 

broadly to include a dealer acting as a placement 

agent . . .’’). Note further that in MSRB Notice 

2008–23 (May 9, 2008), the MSRB filed a proposed 

rule change to amend Rule G–34 to require 

Continued 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19709 Filed 9–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81595; File No. SR–MSRB– 

2017–06] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing of a Proposed 

Rule Change To Amend MSRB Rule 

G–34, on CUSIP Numbers, New Issue, 

and Market Information Requirements 

September 13, 2017. 

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

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 notice is hereby 

given that on August 30, 2017 the 

Municipal Securities Rulemaking Board 

(the ‘‘MSRB’’ or ‘‘Board’’) filed with the 

Securities and Exchange Commission 

(the ‘‘SEC’’ or ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the MSRB. 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 filed with the Commission 

a proposed rule change to amend MSRB 

Rule G–34, on CUSIP numbers, new 

issue, and market information 

requirements, (the ‘‘proposed rule 

change’’) to more clearly express in the 

rule language the MSRB’s longstanding 

interpretation that brokers, dealers and 

municipal securities dealers 

(collectively, ‘‘dealers’’) when acting as 

a placement agent in a private 

placement of municipal securities are 

subject to the CUSIP number 

requirements under Rule G–34(a); to 

expand the application of the rule to 

cover not only dealer municipal 

advisors but also non-dealer municipal 

advisors in competitive sales of 

municipal securities; and to provide a 

limited exception from the requirements 

to apply for CUSIP numbers and to 

apply for depository eligibility. The 

MSRB requests that the proposed rule 

change be effective six months from the 

date of Commission approval. 

The text of the proposed rule change 

is available on the MSRB’s Web site at 

www.msrb.org/Rules-andInterpretations/SEC-Filings/2017- 

Filings.aspx, at the MSRB’s principal 

office, and at the Commission’s Public 

Reference Room. 

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 

MSRB 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 text of these statements 

may be examined at the places specified 

in Item IV below. The MSRB has 

prepared summaries, set forth in 

Sections 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 

Background 

CUSIP Number Requirements 

Applicable to Dealers in Private 

Placements 

In 1983, the SEC approved MSRB 

Rule G–34, on CUSIP numbers, new 

issue and market information 

requirements.3 The MSRB adopted Rule 

G–34 to improve efficiencies in the 

processing and clearance activities of 

the municipal securities industry, 

noting that ‘‘if all eligible municipal 

securities have CUSIP numbers assigned 

to and printed on them, dealers will be 

able to place greater reliance on the 

CUSIP identification of these securities 

in receiving, delivering, and 

safekeeping’’ them.4 Rule G–34(a)(i) 

requires a dealer, whether acting as 

agent or principal, that acquires an 

issuer’s securities ‘‘for the purpose of 

distributing such new issue,’’ and a 

dealer acting as a financial advisor in a 

competitive sale of a new issue, to apply 

for a CUSIP number for the new issue 

by a particular point in time in the 

transaction process. The rule requires, 

among other things, that underwriters, 

and financial advisors in competitive 

sales, make application for a CUSIP 

number based on eight specified items 

of information about the new issue.5

Rule G–34(a)(i)(A)(5) addresses the 

obligations to update application 

information that has changed, for 

example, when the structure of an 

issuance changes after the CUSIP 

number has been assigned. 

The MSRB has become aware of 

confusion over the application of Rule 

G–34(a)(i) among dealers in municipal 

securities. Some industry participants 

have questioned whether the obligation 

to apply for a CUSIP number pursuant 

to Rule G–34(a)(i) is conditioned on the 

underwriter’s intent to conduct a 

distribution of the new issue, and 

therefore, applies only to public 

offerings and not private placements. 

The MSRB has publicly stated the view, 

however, that private placements of 

municipal securities ‘‘generally are 

eligible for CUSIP numbering and thus 

are subject to the requirements of [R]ule 

G–34.’’ 6 Similarly, the MSRB has 

indicated that, unless otherwise noted, 

‘‘references to ‘underwriter’ in the 

context of Rule G–34 are meant to 

include placement agents as well as 

dealers that purchase securities from the 

issuer as principal,’’ 7 and that 

‘‘references to ‘syndicate and selling 

group members’ in this context are 

meant to include managers of syndicates 

as well as sole underwriters or 

placement agents in non-syndicated 

offerings.’’ 8


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