Document ID: SEC-2009-0668-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to MSRB Rule G-8 Requiring Brokers, Dealers and Municipal Securities Dealers To Maintain Certain Records Relating to Auction Rate Securities and Variable Rate Demand Obligations
Posted Date: 2009-05-14T04:00Z

[Federal Register: May 14, 2009 (Volume 74, Number 92)]
[Notices]               
[Page 22780-22782]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14my09-80]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59873; File No. SR-MSRB-2009-06]

 
Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change to MSRB Rule G-8 Requiring Brokers, Dealers and Municipal 
Securities Dealers To Maintain Certain Records Relating to Auction Rate 
Securities and Variable Rate Demand Obligations

May 6, 2009.
    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 April 28, 2009, the Municipal Securities Rulemaking Board 
(``MSRB'') 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 
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 an amendment to MSRB Rule G-8, Books and Records (the

[[Page 22781]]

``proposed rule change''). The proposed rule change would provide 
organizations responsible for inspecting and enforcing MSRB rules with 
information that would assist in the enforcement of compliance with 
Rule G-34(c), on variable rate security market information, by 
requiring brokers, dealers and municipal securities dealers to maintain 
certain records relating to auction rate securities and variable rate 
demand obligations. The MSRB proposes an effective date for the 
proposed rule change of June 1, 2009.
    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
    The MSRB operates a facility for the collection and public 
dissemination of information about securities bearing interest at 
short-term rates (the Short-term Obligation Rate Transparency System, 
or SHORT System). MSRB Rule G-34(c), on variable rate security market 
information, requires brokers, dealers and municipal securities dealers 
(collectively ``dealers'') to report, or ensure the reporting of, 
interest rate and descriptive information to the SHORT System about 
municipal Auction Rate Securities (``ARS'') and Variable Rate Demand 
Obligations (``VRDO'') following an ARS auction or VRDO interest rate 
reset.
    The proposed rule change would require those dealers for which MSRB 
Rule G-34(c) applies to retain for a period of three years records that 
would show that the requirement in Rule G-34 to submit information to 
the SHORT System applies to the dealer and that the dealer has 
submitted accurate information to the SHORT System. For ARS, dealers 
would be required to retain a record of all of the ARS for which the 
dealer acts as a Program Dealer as defined in Rule G-34(c)(i)(A), a 
record of all information submitted to and received from an Auction 
Agent as defined in Rule G-34(c)(i) with respect to an auction, and all 
information required to be submitted to the SHORT System. For VRDO, 
dealers would be required to retain a record of all of the VRDO for 
which the dealer acts as a Remarketing Agent as defined in Rule G-
34(c)(ii), and all information required to be submitted to the SHORT 
System. These records would provide organizations responsible for 
inspecting and enforcing MSRB rules with information that would assist 
in the enforcement of compliance with MSRB Rule G-34(c).
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2)(C) of the Act, which provides that the MSRB's 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, 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 MSRB believes that the proposed rule change is consistent with 
the Act because it will facilitate the inspection and enforcement of 
MSRB Rule G-34(c).

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

    The MSRB does not believe the proposed rule change will impose any 
burden on competition 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 on the 
proposed rule change.

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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose and [sic] significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 
19b-4(f)(6) thereunder.\3\
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    \3\ The Commission notes that Rule 19b-4(f)(6)(iii) requires the 
self-regulatory organization to give the Commission written notice 
of its intent to file the proposed rule change along with a brief 
description and text of 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. The 
MSRB has satisfied the pre-filing requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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.

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-2009-06 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-2009-06. 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

[[Page 22782]]

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 the filing will also 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 No. SR-MSRB-2009-06 and should be submitted on or 
before June 4, 2009.
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    \4\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\4\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11167 Filed 5-13-09; 8:45 am]

BILLING CODE 8010-01-P