Document ID: SEC-2022-0825-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Municipal Securities Rulemaking Board
Posted Date: 2022-06-17T04:00Z

[Federal Register Volume 87, Number 117 (Friday, June 17, 2022)]
[Notices]
[Pages 36558-36560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-13041]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95094; File No. SR-MSRB-2022-04]

Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change Consisting of Amendments to Certain Administrative Rules and 
Articles of the By-Laws of the Municipal Securities Rulemaking Board 
Relating to the MSRB's Officers

June 13, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on June 7, 2022 the Municipal Securities 
Rulemaking Board (``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 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 filed with the Commission a proposed rule change 
consisting of amendments to MSRB Rules A-3, A-4, A-5, and A-8 and 
Articles 3, 4, 5, 8, 11, 12, 13, 14, 15, and 16 of the By-Laws of the 
Municipal Securities Rulemaking Board (``Bylaws'') (the ``proposed rule 
change'') relating to the MSRB's officers. The MSRB has designated the 
proposed rule change as concerned solely with the administration of the 
self regulatory organization under Section 19(b)(3)(A)(iii) of the Act 
\3\ and Rule 19b-4(f)(3) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. As described below, the 
proposed rule change would modify provisions regarding the Board's 
officers.
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    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(3).
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    The text of the proposed rule change is available on the MSRB's 
website at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2022-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
    The Bylaws relate to the Board's governance and address topics such 
as Board membership, meetings, and officers, among other things. The 
current Bylaws are organized into 16 Articles (the proposed rule change 
would organize the Bylaws into 14

[[Page 36559]]

Articles), and certain of the Articles in the Bylaws parallel MSRB 
administrative rules. MSRB Rules A-2 through A-10 are paralleled in the 
Bylaws and, when the Board amends any of these administrative rules, 
the paralleled Article in the Bylaws is amended also.\5\ The Bylaws are 
publicly available on the MSRB's website.\6\
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    \5\ The MSRB amends Articles in the Bylaws that are not 
administrative rules pursuant to current Article 16 of the Bylaws 
(the proposed rule change would move the text of Article 16 to 
Article 14).
    \6\ The Bylaws are available at https://www.msrb.org/-/media/Files/Goverance/By-Laws.ashx?
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Designation of Officers of the Board
    MSRB Rule A-5 and Article 5 of the Bylaws contain provisions 
regarding officers and employees of the Board and, among other things, 
designate the Board's required officer positions. Current MSRB Rule A-5 
and Articles 5, 12, 13 and 14 of the Bylaws designate a Chair, Vice 
Chair, President, Secretary, General Counsel, Treasurer, Assistant 
Treasurer and Assistant Secretary. The proposed rule change would 
narrow the officer positions designated in MSRB Rule A-5 and the Bylaws 
to a Chair, Vice Chair, President and Secretary. The proposed rule 
change would provide the Board with increased flexibility by 
designating only essential officer positions in MSRB Rule A-5 and the 
Bylaws and, accordingly, allowing the Board to create additional 
officer positions as the Board determines is appropriate in light of 
governance needs, without requiring the Board to amend the Bylaws. 
While providing the Board with increased flexibility, the proposed rule 
change still provides the Board with the officer positions required by 
the Virginia Nonstock Corporation Act,\7\ pursuant to which the Board 
is organized.
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    \7\ Va. Code Ann. Sec.  13.1-872.
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    The proposed rule change would also expressly reflect in MSRB Rule 
A-5(a) and Article 5(a) of the Bylaws that the Board may appoint 
additional officers as shall be stated in a resolution of the Board, as 
provided for in the Virginia Nonstock Corporation Act.\8\ The proposed 
rule change would also replace the reference to ``personnel'' in MSRB 
Rule A-5(c) and Article 5(c) of the Bylaws with ``employees'' to match 
the title of Rule A-5 and Article 5 of the Bylaws, which is ``Officers 
and Employees of the Board.''
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    \8\ Va. Code Ann. Sec.  13.1-872(A).
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    The Bylaws also include Articles which describe each officer 
position. The proposed rule change would move the Bylaw Articles which 
describe the President and Secretary positions and modify the 
descriptions of these officer positions to better reflect their 
respective responsibilities. Current Article 12 describes the President 
position. The proposed rule change would move this description to 
Article 11, which is currently titled ``Reserved,'' and add language to 
reflect the President's responsibility for advancing the Board's 
strategic goals and general supervision, management and control.
    Current Article 14(a) describes the Secretary position. The 
proposed rule change would move this description to Article 12, which 
currently describes the President position, and add language to 
expressly reflect the Secretary's responsibility for preparing minutes 
of all meetings of the Board and maintaining records of all actions 
taken by the Board without a meeting by unanimous written consent.
    The proposed rule change would delete the General Counsel, 
Treasurer, Assistant Treasurer and Assistant Secretary from MSRB Rule 
A-5 and Articles 5, 13 and 14 of the Bylaws. Specifically, the proposed 
rule change would remove the description of the General Counsel 
position in Article 13, the description of the Treasurer position in 
Article 14(b), and the descriptions of the Assistant Secretary and 
Assistant Treasurer position in Article 14(c). As a result of such 
deletions, current Article 15 relating to the Board's policies and 
procedures would move to Article 13 and current Article 16 relating to 
amendment of By-Laws provisions other than rules of the Board would 
move to Article 14.
    The proposed rule change would also remove the phrase ``of the 
Board'' and ``to the Board'' following references to the officer 
positions to improve consistency in the manner in which officer 
positions are referred to in the MSRB's administrative rules and 
Bylaws.
Addition of Vice Chair to Compensation Listing
    MSRB Rule A-3(d) and Article 3(d) of the Bylaws relate to the 
Board's compensation and expenses. The proposed rule change would add 
the Vice Chair position to the list of positions for which the Board 
may provide reasonable compensation to correct the omission of the Vice 
Chair position from this listing. The proposed rule change would 
reflect the MSRB's current policy, which is to provide reasonable 
compensation to the Vice Chair. The proposed rule change would also 
remove references to ``MSRB'' in MSRB Rule A-3(d) and Article 3(d) of 
the Bylaws to improve consistency in the MSRB's administrative rules 
and Bylaws, which both use the term ``Board'' as opposed to ``MSRB''.
Removal of Notice Period for Chair and Vice Chair Resignations
    MSRB Rule A-5(b) and Article 5(b) of the Bylaws detail matters 
relating to the election, term, and resignation of the Chair and Vice 
Chair. The proposed rule change would remove provisions in MSRB Rule A-
5(b) and Article 5(b) of the Bylaws specifying a minimum and maximum 
notice period for resignations of the Chair and Vice Chair. The removal 
of a notice period would better reflect the resignation process for 
officers under the Virginia Nonstock Corporation Act which provides 
that an officer may resign at any time.\9\ The removal of a notice 
period also would protect the public interest by permitting the Chair 
or Vice Chair to resign if circumstances arise that call for a notice 
period shorter than ten days, or no notice period at all.\10\
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    \9\ See Va. Code Ann. Sec.  13.1-874(A).
    \10\ MSRB rules provide for disqualification and removal from 
the Board under certain circumstances. See MSRB Rule A-3(c)(ii) 
(providing that a Board member's change in employment or other 
circumstances that results in a conflict with Board composition 
requirements disqualifies the member from serving on the Board as of 
the date of the change); MSRB Rule A-3(c)(iii) (providing that the 
Board may remove a member if it finds that the member has willfully 
violated any provision of the Act, any rule or regulation of the 
Commission thereunder, or any rule of the Board or has abused his or 
her authority or has otherwise acted, or failed to act, so as to 
affect adversely the public interest or the best interests of the 
Board). Circumstances could arise, however, in which the public 
interest may be better served by an accelerated departure from the 
Board through an immediate resignation.
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Election of Chair and Vice Chair and Appointment of Other Officers
    The proposed rule change would revise MSRB Rule A-5(b) and Article 
5 of the Bylaws to make explicit that the provisions regarding 
election, terms, resignation and vacancy therein relate solely to the 
Chair and Vice Chair positions and not to other officer positions. The 
proposed rule change would also explicitly state that persons serving 
as President \11\ and Secretary shall be appointed by resolution of the 
Board.
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    \11\ Pursuant to current Article 12 of the Bylaws (which the 
proposed rule change would move to Article 11), the person employed 
as the Chief Executive Officer shall hold the office of President.
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2. Statutory Basis
    The MSRB has adopted the proposed rule change pursuant to Sections 
15B(b)(2)(I) and 15B(b)(2)(C) of the Exchange Act.\12\ Section 
15B(b)(2)(I) of the Exchange Act provides that the MSRB's rules shall 
provide for the

[[Page 36560]]

operation and administration of the Board, including the selection of a 
Chairman from among the members of the Board, the compensation of the 
members of the Board, and the appointment and compensation of such 
employees, attorneys, and consultants as may be necessary or 
appropriate to carry out the Board's functions under this section.\13\ 
Section 15B(b)(2)(C) of the Exchange Act provides that the MSRB's rules 
be designed to protect investors, municipal entities, obligated 
persons, and the public interest.\14\
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    \12\ 15 U.S.C. 78o-4(b)(2)(I), 78o-4(b)(2)(C).
    \13\ 15 U.S.C. 78o-4(b)(2)(I).
    \14\ 15 U.S.C. 78o-4(b)(2)(C).
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    The proposed rule change is consistent with Section 15B(b)(2)(I) of 
the Exchange Act \15\ because the amendments relating to the 
designation of officers of the Board, the addition of the Vice Chair to 
the compensation listing, the removal of the notice provision for the 
Chair and Vice Chair positions, and the election of the Chair and Vice 
Chair and appointment of other officers all deal with matters relating 
to the operation and administration of the Board.
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    \15\ 15 U.S.C. 78o-4(b)(2)(I).
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    The proposed rule change is also consistent with Section 
15B(b)(2)(C) of the Exchange Act \16\ because it would protect the 
public interest by eliminating the notice period for resignations of 
the Chair and Vice Chair so that the Chair or Vice Chair could resign 
on shorter than ten days' notice, or no notice at all, if the 
circumstances would be better addressed by an accelerated departure 
from the Board.
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    \16\ 15 U.S.C. 78o-4(b)(2)(C).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Section 15B(b)(2)(C) of the Exchange Act requires that MSRB rules 
not be designed to impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Exchange Act.\17\ The 
proposed rule change relates only to the administration of the Board 
and would not impose requirements on dealers, municipal advisors or 
others. Accordingly, the MSRB does not believe that the proposed rule 
change would result in any burden on competition.
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    \17\ Id.
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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 on the 
proposed rule change.

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

    The foregoing proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \18\ and paragraph (f) of Rule 19b-4 
thereunder.\19\ 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.
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f).
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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 email to [email protected]. Please include 
File Number SR-MSRB-2022-04 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MSRB-2022-04. 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 website (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 website 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 MSRB. All comments received 
will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-MSRB-2022-04 and should be submitted on 
or before July 8, 2022.

    For the Commission, pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-13041 Filed 6-16-22; 8:45 am]
BILLING CODE 8011-01-P