Document ID: SEC-2008-0593-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Rule G-11, on New Issue Syndicate Practices, and Rule G-12, on Uniform Practice
Posted Date: 2008-04-18T04:00Z

[Federal Register: April 18, 2008 (Volume 73, Number 76)]
[Notices]               
[Page 21166-21167]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18ap08-104]                         

[[Page 21166]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57659; File No. SR-MSRB-2008-03]

 
Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing of Proposed Rule Change Relating to Rule G-11, 
on New Issue Syndicate Practices, and Rule G-12, on Uniform Practice

April 14, 2008.
    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 March 18, 2008, the Municipal Securities Rulemaking Board (``MSRB'' 
or ``Board'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been substantially prepared by the 
MSRB. The Commission is publishing this notice to solicit comments on 
the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The MSRB is filing with the Commission a proposed rule change 
consisting of amendments to Rule G-11 and Rule G-12 that (a) delete 
Rule G-12(i); (b) consolidate the remaining syndicate practice 
provisions of Rule G-12 into Rule G-11; (c) delete the syndicate-
related sections of Rule G-12; and (d) make minor technical corrections 
to Rule G-11. The text of the proposed rule change is available on the 
MSRB's Web site (http://www.msrb.org), 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
    Rule G-11, on new issue syndicate practices, sets forth basic 
requirements for dealers serving as senior managers or members of 
underwriting syndicates. Rule G-12, on uniform practice, includes 
additional settlement-related provisions in connection with syndicate 
operations. The Board has determined to consolidate the syndicate 
practice provisions into Rule G-11 by deleting the syndicate-related 
sections of Rule G-12 and inserting them into Rule G-11, as well as to 
make minor technical corrections to Rule G-11. This consolidation will 
put the Board's syndicate practice requirements into a single rule and 
thereby reduce the possibility of rule violations due to inadvertent 
failures to note the additional syndicate practice provisions that are 
currently embedded in Rule G-12 among other un-related provisions.
    In addition, the Board has also determined to delete Rule G-12(i), 
on good faith deposits, in order to clarify and modernize its rules to 
bring them into line with the realities of current market practice 
without compromising investor protection. A good faith deposit was in 
the past generally delivered to a municipal bond issuer by a firm 
competing for the underwriting business of the issuer. If the syndicate 
was not successful in purchasing the issue, Rule G-12(i) required the 
syndicate manager to return the deposit to the members of the syndicate 
within two business days following the return of the deposit from the 
issuer. Under current market practice, generally such deposits are not 
advanced either because they are not required by issuers or are treated 
as an expense of the syndicate for which syndicate managers give an 
accounting to syndicate members pursuant to MSRB rules.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
section 15B(b)(2)(C) of the Act,\3\ which provides that the MSRB's 
rules shall:
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    \3\ 15 U.S.C. 78o-4(b)(2)(C).
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    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 Board believes that the proposed rule change will facilitate 
transactions in municipal securities and protect investors and the 
public interest by creating a consolidated rule that seeks to avoid 
inadvertent rule violations and clarifies and modernizes its rules to 
bring them into line with the realities of current market practice 
without compromising investor protection.

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

    The MSRB does not believe that the proposed rule change will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act since it would apply equally to 
all brokers, dealers and municipal securities dealers.

C. Self-Regulatory Organization's Statement on 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date 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 such 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-MSRB-2008-03 on the subject line.

[[Page 21167]]

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-MSRB-2008-03. This file 
number should be included on the subject line if e-mail 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 inspection and 
copying in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the MSRB. 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-MSRB-2008-03 and should be 
submitted on or before May 9, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E8-8348 Filed 4-17-08; 8:45 am]

BILLING CODE 8010-01-P