Document ID: SEC-2010-0136-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Approving Proposed Rule Change Consisting of Amendments to Rule G-37 (Political Contributions and Prohibitions on Municipal Securities Business) and Rule G-8 (Books and Records To Be Made by Brokers, Dealers and Municipal Securities Dealers)
Posted Date: 2010-01-26T05:00Z

[Federal Register: January 26, 2010 (Volume 75, Number 16)]
[Notices]               
[Page 4126-4127]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26ja10-108]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61381, File No. SR-MSRB-2009-18]

 
Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Approving Proposed Rule Change Consisting of Amendments to 
Rule G-37 (Political Contributions and Prohibitions on Municipal 
Securities Business) and Rule G-8 (Books and Records To Be Made by 
Brokers, Dealers and Municipal Securities Dealers)

January 20, 2010.
    On December 4, 2009, the Municipal Securities Rulemaking Board 
(``MSRB''), filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change consisting of proposed amendments to Rule G-37 
(political contributions and prohibitions on municipal securities 
business) and Rule G-8 (books and records to be made by brokers, 
dealers and municipal securities dealers). The proposed rule change was 
published for comment in the Federal Register on December 18, 2009.\3\ 
The Commission received no comment letters. This order approves the 
proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 61155 (Dec. 11, 
2009), 74 FR 67285 (December 18, 2009) (``Commission's Notice'').
---------------------------------------------------------------------------

    The proposed amendments to Rule G-37 would require the public 
disclosure of contributions to bond ballot campaigns made by dealers, 
municipal finance professionals (``MFPs''), their political action 
committees (``PACs'') and non-MFP executive officers on MSRB Form G-37. 
Dealers would be required to report on revised Form G-37 the official 
name of each bond ballot campaign receiving contributions during such 
calendar quarter, the jurisdiction (including city/county/state or 
political subdivision) by or for which municipal securities, if 
approved, would be issued, the contribution amount made and the 
category of contributor. The proposal would provide a de minimis 
exception from the reporting of contributions on Form G-37 made by an 
MFP or non-MFP executive officer to a bond ballot campaign for a ballot 
initiative with respect to which such person is entitled to vote if all 
contributions by such person to such bond ballot campaign, in total, do 
not exceed $250 per ballot initiative. The amendments would parallel 
the existing disclosure requirements for contributions to issuer 
officials and state and local political parties. Such amendments would 
not, however, provide for a ban on municipal securities business as a 
result of contributions to bond ballot campaigns.
    The proposed amendments to Rule G-8 would require dealers to create 
and maintain records of the non-de minimis contributions to bond ballot 
campaigns that would be required to be disclosed on Form G-37 under the 
proposed amendments to Rule G-37. The MSRB requested that the proposed 
rule change become effective on, and would apply solely to 
contributions made on or after, the first business Monday at least five 
business days after Commission approval. A full description of the 
proposal is contained in the Commission's Notice.
    The Commission has carefully considered the proposed rule change 
and finds that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to the MSRB \4\ and, in particular, the requirements of

[[Page 4127]]

Section 15B(b)(2)(C) of the Act \5\ and the rules and regulations 
thereunder. Section 15B(b)(2)(C) of the 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.\6\ In particular, the 
Commission finds that the proposed rule change is consistent with the 
Act because it will protect investors and the public interest and will 
assist with preventing fraudulent and manipulative acts and practices 
by allowing the public and regulators to monitor dealer contributions 
to bond ballot campaigns, thereby further reducing the opportunity for 
pay-to-play practices in the municipal securities market.
---------------------------------------------------------------------------

    \4\ 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).
    \5\ 15 U.S.C. 78o-4(b)(2)(C).
    \6\ Id.
---------------------------------------------------------------------------

    The proposed amendments will become effective on the date requested 
by the MSRB.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-MSRB-2009-18), be, and it 
hereby is, approved.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-1431 Filed 1-25-10; 8:45 am]
BILLING CODE 8011-01-P