Document ID: SEC-2007-1321-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Municipal Securities Rulemaking Board
Posted Date: 2007-09-26T04:00Z

[Federal Register: September 26, 2007 (Volume 72, Number 186)]
[Notices]               
[Page 54702-54704]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26se07-122]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56478; File No. SR-MSRB-2007-03]

 
Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Delay the Implementation of Amendments to Rule G-27 on 
Supervision

September 20, 2007.
    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 September 14, 2007, 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 prepared by the MSRB. 
The MSRB has filed the proposal pursuant to section 19(b)(3)(A) of the 
Act,\3\ and Rule 19b-4(f)(1) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The MSRB is proposing to delay, until February 29, 2008, 
implementation of the amendments to Rule G-27, on supervision, approved 
in File Number SR-MSRB-2006-10, and which are scheduled to be 
implemented on November 26, 2007. There are no new changes to the text 
of Rule G-27 as amended. The text of the proposed rule change is 
available on the MSRB's Web site (http://www.msrb.org), at the MSRB, 

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

[[Page 54703]]

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
    On May 22, 2007, the Commission approved File Number SR-MSRB-2006-
10, which incorporated into Rule G-27 most of the requirements of NASD 
Rules 3010 (Supervision) and 3012 (Supervisory Control System), to help 
ensure a coordinated regulatory approach in the area of supervision and 
to facilitate inspection and enforcement. The Commission also granted 
the MSRB's request for a delayed effective date of November 26, 2007.
    Shortly after approval of the amendments, MSRB staff began 
receiving inquiries from industry members indicating some confusion 
over which type of principal is required based on the activities 
conducted at branch offices and offices of supervisory jurisdiction. 
The MSRB is currently reviewing the amendments to Rule G-27 in light of 
these inquiries and anticipates publishing a notice in the near future 
addressing the questions and concerns raised. Pending the completion of 
such review and anticipated publication of further guidance in this 
area, the MSRB has filed the proposed rule change for immediate 
effectiveness to immediately delay, until February 29, 2008, the 
implementation date of the recently approved amendments to Rule G-27, 
which otherwise would be implemented on November 26, 2007.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
section 15B(b)(2)(C) of the Act,\5\ which provides that the MSRB's 
rules shall:
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    \5\ 15 U.S.C. 78o-4(b)(2)(C).

    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 
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the public interest.

    The MSRB believes that delaying the implementation date of the 
recently approved amendments to Rule G-27 will give brokers, dealers 
and municipal securities dealers the time needed to determine which, if 
any, of their personnel must be registered as a principal (either a 
municipal securities principal (Series 53) or a municipal fund 
securities limited principal (Series 51)) based on the activities 
undertaken at a branch office and/or office of supervisory 
jurisdiction.

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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The MSRB has received two letters requesting guidance on Rule G-27, 
as amended, from the College Savings Foundation and from Sutherland 
Asbill & Brennan, LLP. These commentators raised certain substantive 
questions regarding the application of the amendments. The MSRB is 
currently reviewing the amendments to Rule G-27 in light of these 
inquiries and anticipates publishing a notice in the near future 
addressing the questions and concerns raised.\6\ The commentators also 
requested that the MSRB delay the effective date of the amendments. The 
MSRB believes that it would be appropriate to delay the implementation 
of the amendments until February 29, 2008, in light of its pending 
review of questions on the amendments, anticipated publication of 
further guidance in this area, and desire to prevent firms from 
expending unnecessary time and expense in registering as principals 
certain people who may not need to be so registered.
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    \6\ The MSRB believes that a notice should fully address such 
questions and concerns. If, however, the MSRB concludes that a 
notice is insufficient and that further rulemaking is necessary, the 
MSRB will file a separate rule change with the Commission.
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III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The MSRB has designated this proposed rule change as constituting a 
stated policy, practice or interpretation with respect to the meaning, 
administration or enforcement of an existing MSRB rule under Section 
19(b)(3)(A)(i) of the Act,\7\ and Rule 19b-4(f)(1) thereunder,\8\ which 
renders the proposed rule change effective upon filing with the 
Commission.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(i).
    \8\ 17 CFR 240.19b-4(f)(1).
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    At any time within 60 days of this filing, the Commission may 
summarily abrogate this proposal 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.\9\
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    \9\ See 15 U.S.C. 78s(b)(3)(C).
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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-2007-03 on the subject line.

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-2007-03. 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

[[Page 54704]]

information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-MSRB-2007-03 and should be submitted on or before 
October 17, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-18957 Filed 9-25-07; 8:45 am]

BILLING CODE 8010-01-P