Document ID: SEC-2011-0261-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Municipal Securities Rulemaking Board
Posted Date: 2011-03-02T05:00Z

[Federal Register Volume 76, Number 41 (Wednesday, March 2, 2011)]
[Notices]
[Pages 11545-11547]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-4692]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63962; File No. SR-MSRB-2011-05]

Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of Amendments to 
Rule A-15, on Notification To Board of Termination of Municipal 
Securities Activities and Change of Name or Address

February 24, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on February 14, 2011, the Municipal Securities Rulemaking Board 
(``Board'' or ``MSRB'') filed with the Securities and Exchange 
Commission (``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 MSRB has filed the proposal as a ``non-controversial'' 
rule change pursuant to Section 19(b)(3)(A)(iii) of the Act,\3\ and 
Rule 19b-4(f)(6) 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)(iii).
    \4\ 17 CFR 240.19b4-(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The MSRB is filing a proposed rule change relating to the 
notification requirements in the event of a change in status of a 
broker, dealer, municipal securities dealer, or municipal advisor, 
consisting of amendments to Rule A-15, on Notification to Board of 
Termination of Municipal Securities Activities and Change of Name or 
Address.
    The text of the proposed rule change is available on the MSRB's 
website at http://www.msrb.org/Rules-and-Interpretations/SEC-Filings/2011-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 Board 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 purposes of the proposed rule change are: (i) To extend the 
provisions of Rule A-15 to municipal advisors; and (ii) to expand the 
circumstances under which the MSRB must be notified to include: (A) a 
bar or suspension from engaging in municipal securities activities or 
municipal advisory activities by the appropriate regulatory agency, 
judicial authority, or otherwise; and (B) in the case of a broker, 
dealer, or municipal securities dealer, expulsion or suspension from 
membership or participation in a national securities exchange or 
registered securities association. Although existing Rule A-15 
establishes a procedure for notification of a change in status with 
respect to brokers, dealers and municipal securities dealers, it does 
not apply to municipal advisors. Further, existing Rule A-15 does not 
provide for notification to the Board in the event of disbarment or 
suspension by regulatory agencies or judicial authorities or otherwise, 
or, with respect to brokers, dealers and municipal securities dealers, 
expulsion or suspension from membership or participation in a national 
securities exchange or registered securities association. The proposed 
rule change (i) adds municipal advisors to the entities subject to the 
rule; (ii) requires notification if (A) a broker, dealer, municipal 
securities dealer, or municipal advisor has been barred or suspended 
from engaging in municipal securities activities or municipal advisory 
activities by the appropriate regulatory agency, judicial authority or 
otherwise; and (B) if a broker, dealer or municipal securities dealer 
has been expelled or suspended from membership or participation in a 
national securities exchange or registered securities association.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2) of the Act, which provides that:

    The Board shall propose and adopt rules to effect the purposes 
of this title with respect

[[Page 11546]]

to transactions in municipal securities effected by brokers, 
dealers, and municipal securities dealers and advice provided to or 
on behalf of municipal entities or obligated persons by brokers, 
dealers, municipal securities dealers, and municipal advisors with 
respect to municipal financial products, the issuance of municipal 
securities, and solicitations of municipal entities or obligated 
persons undertaken by brokers, dealers, municipal securities 
dealers, and municipal advisors;

and, in particular, Section 15B(b)(2)(C) of the Act, which provides, in 
pertinent part, that MSRB rules shall:

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 and 
municipal financial products, to remove impediments to and perfect 
the mechanism of a free and open market in municipal securities and 
municipal financial products, and, in general, to protect investors, 
municipal entities, obligated persons, and the public interest * * 
*.

    The proposed rule change is consistent with Section 15B(b)(2) and 
Section 15B(b)(2)(C) of the Act because it will assist the Board in 
monitoring which brokers, dealers, municipal securities dealers, and 
municipal advisors should no longer be listed as MSRB registrants and, 
accordingly, will aid investors, municipal entities, obligated persons, 
and the public in their choice of brokers, dealers, municipal 
securities dealers, and municipal advisors.
    Section 15B(2)(L)(iv) of the Act requires that rules adopted by the 
Board

not impose a regulatory burden on small municipal advisors that is 
not necessary or appropriate in the public interest and for the 
protection of investors, municipal entities, and obligated persons, 
provided that there is robust protection of investors against fraud.

    The proposed rule change does not impose a regulatory burden on 
small municipal advisors that is not necessary or appropriate in the 
public interest and for the protection of investors, municipal 
entities, and obligated persons and for the robust protection of 
investors against fraud. Rule A-15, as amended by the proposed rule 
change, requires that municipal advisors submit a notice indicating 
their change in status. The MSRB expects that municipal advisors will 
need no more than 30 minutes to complete the notification required by 
the proposed rule change, and such notice may be submitted by email or 
fax, as well as by regular mail or overnight delivery service. The MSRB 
will have staff ready to assist municipal advisors should they have any 
questions. The proposed rule change does not impose any additional fee 
on municipal advisors but only requires payment of any amounts 
otherwise due and owing under other rules of the Board. Any burden on 
municipal advisors is de minimis. The proposed rule change is necessary 
to aid the Board in monitoring which brokers, dealers, municipal 
securities dealers, and municipal advisors should no longer be listed 
as MSRB registrants and, accordingly, will aid investors, municipal 
entities, obligated persons, and the public by providing information to 
inform their choice of broker, dealer, municipal securities dealer, or 
municipal advisor.

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 not necessary or appropriate in furtherance 
of the purposes of the Act, since it would apply equally to all 
brokers, dealers, municipal securities dealers and municipal advisors.

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

    Written comments were neither solicited nor received on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The MSRB represented that the proposed rule change qualifies for 
immediate effectiveness pursuant to Section 19(b)(3)(A)(iii) of the Act 
\5\ thereunder, because it: (i) Does not significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) does not become 
operative for 30 days after filing or such shorter time as the 
Commission may designate consistent with the protection of investors 
and the public interest.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ In addition, Rule 19b-4(f)(6)(iii) requires a self-
regulatory organization to give the Commission written notice of its 
intent to file 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.
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    The MSRB provided the required written notice of its intention to 
file the proposed rule change to the Commission on February 3, 2011, 
and the proposed rule change will become operative on March 17, 2011, 
which is more than 30 days after the filing of the proposed rule 
change.
    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 necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.\7\
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    \7\ See Section 19(b)(3)(C) of the Act, 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-2011-05 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MSRB-2011-05. 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 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 a.m. and 3 
p.m. Copies of such filing also will be available for inspection and 
copying at the MSRB's offices. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You

[[Page 11547]]

should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-MSRB-2011-05 
and should be submitted on or before March 23, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Cathy H. Ahn,
Deputy Secretary.
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    \8\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2011-4692 Filed 3-1-11; 8:45 am]
BILLING CODE 8011-01-P