Document ID: SEC-2020-1727-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Municipal Securities Rulemaking Board
Posted Date: 2020-10-28T04:00Z

[Federal Register Volume 85, Number 209 (Wednesday, October 28, 2020)]
[Notices]
[Pages 68395-68400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23795]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90248; File No. SR-MSRB-2020-08]

Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing of a Proposed Rule Change To Amend MSRB Form G-
32

October 22, 2020.
    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 October 13, 2020 the Municipal Securities 
Rulemaking Board (``MSRB'' or ``Board'') 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 to amend 
MSRB Form G-32 to clarify that brokers, dealers, and municipal 
securities dealers (collectively, ``dealers'' and, individually, each a 
``dealer'') acting as underwriters in the primary offering of municipal 
securities are obligated to manually complete three data fields on 
amended Form G-32 when such fields are applicable to a primary offering 
(the ``proposed rule change''). More specifically, the proposed rule 
change would clarify the method of completing amended Form G-32 for the 
following three data fields:
     Bank Qualified Flag--The proposed rule change would 
clarify that the ``yes/no'' flag on amended Form G-32 would, when 
applicable, need to be manually completed by an underwriter to indicate 
whether a bank can deduct a portion of the interest cost of the carry 
for the municipal securities, in accordance with the applicable 
provisions of the code of the Internal Revenue Service (the ``BQ Data 
Field'').
     Planned Amortization Class Bond (``PAC Bond'') Flag--The 
proposed rule change would clarify that the ``yes/no'' flag on amended 
Form G-32 would, when applicable, need to be manually completed to 
indicate whether the offering is an asset-backed bond payable with a 
fixed sinking fund schedule (the ``PAC Bond Data Field'').
     Put End Date Entry--The proposed rule change would clarify 
that data fields on Form G-32 relating to whether the offering is 
puttable would, when applicable, need to be manually completed to 
indicate when a put end date is defined at the time of issuance (the 
``Put Date Field'' and, collectively, with the BQ Data Field and the 
PAC Bond Data Field, the ``Amended Manual Fields'').
    The proposed rule change is intended to clarify File No. SR-MSRB-
2019-07,\3\ a prior rule filing that the MSRB submitted to the SEC on 
April 10, 2019 and that was subsequently approved by the SEC, as 
amended, on June 27, 2019 (the ``Primary Offering Practices 
Amendments'').\4\ Among other changes,\5\ the Primary Offering 
Practices Amendments authorized updates to Form G-32 that will add the 
BQ Data Field, the PAC Bond Data Field, the Put Date Field, as well as 
the 63 other new data fields,\6\ upon their effective date of

[[Page 68396]]

March 31, 2021 (collectively, these 66 fields are hereinafter referred 
to as the ``New Data Fields,'' and Form G-32 as modified with the New 
Data Fields is hereinafter referred to as ``Amended Form G-32'').\7\ 
Consistent with the Primary Offering Practices Amendments, the proposed 
rule change does not seek approval for the inclusion of the BQ Data 
Field, the PAC Bond Data Field, and the Put Date Field on Amended Form 
G-32, but more narrowly seeks to describe the precise method by which 
underwriters must complete these previously approved fields.\8\
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    \3\ File No. SR-MSRB-2019-07, available at http://msrb.org/~/
media/Files/SEC-Filings/2019/MSRB-2019-07-Refiled-2.ashx?.
    \4\ Exchange Act Release No. 86219 (June 27, 2019), 84 FR 31961 
(July 3, 2019) (File No. SR-MSRB-2019-07) (the ``2019 SEC Approval 
Notice''), available at http://www.msrb.org/~/media/Files/SEC-
Filings/2019/MSRB-2019-07-Fed-Reg-Approval.ashx?.
    \5\ The Primary Offering Practices Amendments not only 
authorized amendments to Form G-32, but also authorized amendments 
to the text of MSRB Rule G-11, on primary offering practices, and 
MSRB Rule G-32, on disclosures in connection with primary offerings. 
See MSRB Notice 2019-15, available at http://msrb.org/~/media/Files/
Regulatory-Notices/Announcements/2019-15.ashx??n=1.
    \6\ See, e.g., File No. SR-MSRB-2019-07, at p. 7 (``The proposed 
rule change would add 57 data fields to Form G-32 to capture data 
that an underwriter already is required to input into NIIDS, as 
applicable, for NIIDS-eligible offerings.''). The other nine of the 
New Data Fields (i.e., the Manual Fields (as hereinafter defined)) 
are unique to Form G-32 in that they cannot be populated from New 
Issue Information Dissemination Service (``NIIDS'') fields, as 
corresponding NIIDS fields do not exist. NIIDS is an automated, 
electronic system that receives comprehensive new issue information 
on a market-wide basis for the purposes of establishing depository 
eligibility and immediately re-disseminating the information to 
information vendors supplying formatted municipal securities 
information for use in automated trade processing systems.
    \7\ See File No. SR-MSRB-2020-01 (April 13, 2020), at pp. 6-7 
(extending the compliance date for Amended Form G-32 to March 31, 
2021 from the first announced compliance date of November 30, 2020), 
available at http://msrb.org/~/media/Files/SEC-Filings/2020/MSRB-
2020-01-Revised.ashx?; see also MSRB Notice 2019-21 (December 20, 
2019) (setting an initial November 30, 2020 compliance date, which 
was subsequently extended by File No. SR-MSRB-2020-01), available at 
http://msrb.org/~/media/Files/Regulatory-Notices/Announcements/2019-
21.ashx??n=1.
    \8\ This clarification would only be applicable to NIIDS-
eligible offerings that are (1) bank qualified, (2) composed of PAC 
Bonds, or (3) puttable by a certain date at the time of issuance. In 
other words, underwriters of a NIIDS-eligible primary offering would 
be required to manually complete the Amended Manual Fields on 
Amended Form G-32 if and when applicable, and underwriters of non-
NIIDS-eligible offerings would not be required to complete any of 
three Amended Manual Fields.
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    The MSRB believes that the proposed rule change is necessary and 
appropriate to more clearly define the compliance obligation of an 
underwriter when completing one of the Amended Manual Fields on Amended 
Form G-32, and, thereby, would promote greater regulatory transparency 
in the municipal securities market, as further described below. If the 
proposed rule change is approved,\9\ the MSRB intends to maintain the 
existing compliance date for the New Data Fields of March 31, 2021 (the 
``compliance date'').\10\
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    \9\ As previously stated in the Primary Offering Practices 
Amendments, the MSRB will make both Amended Form G-32, as well as 
the updated EMMA Dataport Manual for Primary Market Submissions and 
the Specifications for Primary Market Submissions Service documents 
available to underwriters in advance of the compliance date. The 
MSRB will announce the availability of Amended Form G-32 and the 
updated manual and specification document by publishing a regulatory 
notice.
    \10\ See footnote seven supra for citations and references 
related to the March 31, 2021 compliance date.
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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-Fili_ngs/2020-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
    The proposed rule change is intended to put market participants on 
notice that, when applicable, the Amended Manual Fields will not be 
auto-populated on Amended Form G-32 with information input into the 
NIIDS, and, as a result, must be manually completed.
Background
Overview of Form G-32 Information Submission
    Pursuant to Rule G-32, an ``underwriter'' \11\ in a primary 
offering of municipal securities is required to electronically submit 
certain primary offering disclosure documents and related information, 
including the data elements set forth on Form G-32.\12\ This submission 
is completed through the MSRB's Electronic Municipal Market Access 
Dataport system (``EMMA Dataport'').\13\ An underwriter's submission of 
Form G-32 in EMMA Dataport is commonly, but not always,\14\ preceded by 
the underwriter's (1) procurement of CUSIP numbers from CUSIP Global 
Services, (2) registration of the municipal securities for depository 
eligibility with the Depository Trust and Clearing Corporation 
(``DTCC''), and (3) submission of certain information about the 
characteristics of the offering to NIIDS, all generally pursuant to 
MSRB Rule G-34, on CUSIP numbers, new issue, and market information 
requirements.\15\ As described in the Primary Offering Practices 
Amendments and prior amendments approved in 2012,\16\ Form G-32 
incorporates matching data fields relating to certain of the 
information submitted to NIIDS and CUSIP Global Services and, thereby, 
facilitates the MSRB's collection of market information utilized in 
various rulemaking and transparency activities.
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    \11\ Rule G-32(b)(vi)(B) requires the underwriter of a primary 
offering of municipal securities to make certain submissions to the 
MSRB by electronic completion of Form G-32 through EMMA Dataport. 
Rule G-32(c)(xii) defines the term ``underwriter'' to mean ``a 
broker, dealer or municipal securities dealer that is an underwriter 
as defined in Securities Exchange Act Rule 15c2-12(f)(8), including 
but not limited to a broker, dealer or municipal securities dealer 
that acts as remarketing agent for a remarketing of municipal 
securities that constitutes a primary offering.'' For purposes of 
completing Form G-32, the term underwriter, as defined by reference 
to Rule 15c2-12(f)(8), encompasses certain dealers acting as agents 
in the private placements of municipal securities offerings. See 
Exchange Act Release No. 26985 (June 28, 1989) (File No. S7-20-88), 
54 FR 28799 (July 10, 1989), at 28809-28810 (discussing how the 
definition of underwriter in the final Rule 15c2-12 differed from 
the proposed definition in order to, ``. . . clarify that a broker, 
dealer, or municipal securities dealer may be acting as an 
underwriter, for purposes of [Rule 15c2-12], in connection with a 
private offering.'' (emphasis added)). Dealers acting as placement 
agents in the offering of municipal securities are reminded of their 
obligations under MSRB rules, including the completion of Form G-32 
pursuant to Rule G-32.
    \12\ See Rule G-32(b)(i)(A) (stating that, except as otherwise 
noted, ``the underwriter of a primary offering of municipal 
securities shall submit . . . Form G-32 information relating to the 
offering in a timely and accurate manner . . .''); see also Rule G-
32(b)(vi)(B) (``All submissions of information required under [Rule 
G-32] shall be made by means of Form G-32 submitted electronically 
to EMMA in such format and manner, and including such items of 
information provided at such times, as specified herein, in Form G-
32 and in the EMMA Dataport Manual.'').
    \13\ EMMA[supreg] is a registered trademark of the MSRB. EMMA 
Dataport is the information utility through which submissions of 
documents and related information are made to the MSRB and its 
market transparency programs, like the EMMA website. Specific to 
Form G-32, an underwriter or its designated agent may make 
submissions through EMMA Dataport.
    \14\ For example, certain primary offerings of municipal 
securities, such as non-NIIDS-eligible offerings, are not subject to 
the CUSIP requirements of Rule G-34. See Rule G-34(a)(i).
    \15\ See, e.g., Rule G-34(a)(ii) regarding the application for 
depository eligibility and dissemination of new issue information 
and the exclusion of certain issues as set forth in that subsection.
    \16\ In 2012, the MSRB proposed and the SEC approved amendments 
that integrated the submission of certain matching data elements to 
NIIDS with Form G-32. See MSRB Notice 2012-64 (Dec. 24, 2012) and 
related citations therein (describing how File No. SR-MSRB-2012-08 
amended Rule G-32 to provide that an underwriter's obligation to 
submit data about a new issue under that rule is fulfilled through 
submission of such data through NIIDS).
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Discussion of the Primary Offering Practices Amendments and Amended 
Form G-32
    The Primary Offering Practices Amendments described each of the New 
Data Fields as falling into one of two

[[Page 68397]]

categories: (1) Data fields that generally would be auto-populated with 
information previously entered by an underwriter in NIIDS 
(collectively, the ``Auto-Populated Fields'') \17\ and (2) data fields 
that would be unique to Amended Form G-32 and, when applicable, would 
need to be completed with manual data entry because they could not be 
auto-populated with matching NIIDS information (collectively, the 
``Manual Fields''). The filing identified 57 Auto-Populated Fields and 
nine Manual Fields.\18\
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    \17\ File No. SR-MSRB-2019-07, at p. 16 (``The [Primary Offering 
Practices Amendments] would amend Form G-32 to include 57 additional 
data fields that would be auto-populated with datapoints already 
required to be input into NIIDS, as applicable, for NIIDS-eligible 
offerings. As previously noted [therein], these data fields are 
currently available to regulators and certain other industry 
participants that have access to NIIDS. However, adding the data 
fields to Form G-32 would ensure the MSRB's continued access to 
important primary offering information, and enhance its ability to 
oversee the accuracy and distribution of the information 
provided.'').
    \18\ See File No. SR-MSRB-2019-07, at pp. 7-8 (``The [Primary 
Offering Practices Amendments] would add 57 data fields to Form G-32 
to capture data that an underwriter already is required to input 
into NIIDS, as applicable, for NIIDS-eligible offerings. . . . In 
addition to the data fields auto-populated by NIIDS submissions, the 
[Primary Offering Practices Amendments] also would add nine data 
fields to Form G-32 for manual completion by underwriters in NIIDS-
eligible offerings.'').
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    The three Amended Manual Fields that are the subject of this 
proposed rule change were originally categorized as part of the 57 
Auto-Populated Fields, because the MSRB understood, at that time, that 
there was a corresponding data field match in NIIDS that would allow 
for the PAC Bond Data Field, the BQ Data Field, and the Put Date Field, 
respectively, to be auto-populated in EMMA Dataport when applicable. 
The MSRB now understands that, although DTCC's NIIDS system may allow 
for an underwriter to input information corresponding to the Amended 
Manual Fields, presently, this information is not data DTCC 
disseminates to the MSRB's EMMA Dataport. Consequently, under the 
current design of DTCC's system, the MSRB does not receive the 
electronic inputs necessary to auto-populate these three fields on 
Amended Form G-32.
Description of Underwriter's Obligation To Verify and Complete Amended 
Form G-32
    The Primary Offering Practices Amendments did not amend the 
existing obligation of an underwriter to complete Form G-32 in a timely 
and accurate manner.\19\ The obligation is applicable to both the 
Manual Fields as well as the Auto-Populated Fields.\20\ The Primary 
Offering Practices Amendments relatedly addressed scenarios in which 
the underwriter's ability to complete the Auto-Populated Fields of 
Amended Form G-32 timely and accurately may be made more burdensome by 
the unavailability of NIIDS data, erroneous auto-population, and 
related circumstances.\21\ In this way, the Primary Offering Practices 
Amendments require an underwriter to accurately and timely complete 
each of the applicable data fields of Amended Form G-32 (including the 
Amended Manual Fields), regardless of the lack of NIIDS auto-population 
or other data auto-population errors. The proposed rule change does not 
alter this obligation, but merely seeks to highlight its application in 
light of the lack of auto-population of the Amended Manual Fields.\22\
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    \19\ See Rule G-32(b)(i)(A) and Rule G-32(b)(vi)(C).
    \20\ See, e.g., File No. SR-MSRB-2019-07, at p. 6 (``. . . the 
underwriter in primary offerings of municipal securities is 
required, pursuant to Rule G-32, to submit electronically to the 
EMMA Dataport, in a timely and accurate manner, certain primary 
offering disclosure documents and related information, including the 
data elements set forth on Form G-32.'')
    \21\ See id., at p. 7, n. 14 (``While the MSRB is currently not 
aware of any reason NIIDS would become unavailable, the inability to 
auto-populate information from NIIDS would not negate the 
requirement that information be provided pursuant to MSRB Rule G-
32.'' (emphasis added)); see also id., p. 7, n. 13 (``While NIIDS 
provides the system for submitting the information, its use does not 
obviate the requirement that information submitted pursuant to Rule 
G-34 be timely, comprehensive and accurate.'' (emphasis added) 
(internal citation omitted)), and id., at pp. 6-7 (``Information 
required to be included on Form G-32 and for which no corresponding 
data element is available through NIIDS must be submitted manually 
through the EMMA Dataport on Form G-32 (i.e., it would not be auto-
populated from NIIDS) pursuant to Rule G-32(b)(i)(A)(1)(a).'' 
(emphasis added) (internal citation omitted)).
    \22\ Although an underwriter would have an obligation to 
manually complete the Amended Manual Fields on Amended Form G-32 
consistent with these statements in the Primary Offering Practices 
Amendments regardless of this proposed rule change, the MSRB 
believes that the proposed rule change is warranted in this instance 
to provide greater regulatory transparency to the market and, 
particularly, to dealers who presently act, or may act in the 
future, as underwriters.
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Proposed Rule Change
    The SEC's approval of the Primary Offering Practices Amendments 
authorized the MSRB to include the three Amended Manual Fields (i.e., 
the PAC Bond Data Field, the BQ Data Field, and the Put Date Field) on 
Amended Form G-32.\23\ However, as previously noted, the Primary 
Offering Practices Amendments described the Amended Manual Fields as 
generally being ``auto-populated'' from the data an underwriter inputs 
into NIIDS. The MSRB is filing the proposed rule change to clarify this 
description. The MSRB anticipates that the lack of auto-population 
could cause confusion among market participants, particularly in 
instances where an underwriter has previously completed the NIIDS 
submission (either directly in NIIDS or indirectly through a third-
party interface) and may believe there is no obligation to ensure 
submission into EMMA Dataport.\24\ Consequently, the MSRB seeks to 
mitigate potential confusion in advance of the compliance date and to 
highlight the obligation of an underwriter to complete the applicable 
fields on Amended Form G-32 in an accurate and timely manner, 
regardless of whether an applicable field is properly auto-populated 
from NIIDS or not.
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    \23\ As a threshold matter, underwriters of non-NIIDS-eligible 
offerings would not be required to complete the Amended Manual 
Fields and underwriters of NIIDS-eligible offerings would only be 
required to complete the Amended Manual Fields when applicable to a 
particular primary offering of municipal securities.
    \24\ The MSRB believes this scenario is addressed by the Primary 
Offering Practices Amendments, and the filing's discussion regarding 
the unavailability of NIIDS. See supra Background--Description of 
Underwriter's Obligation to Verify and Complete Amended Form G-32 
(discussing that an underwriter's obligation to fully complete 
Amended Form G-32 would not be ``obviated'' in instances where NIIDS 
is unavailable or the Amended Form G-32 is otherwise auto-populated 
with erroneous information). The obligation to provide complete and 
accurate data remains the responsibility of a dealer even when the 
dealer directly utilizes NIIDS or indirectly utilizes some other 
vendor.
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2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
the provisions of Section 15B(b)(2)(C) of the Act,\25\ which provides 
that the MSRB's rules shall:
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    \25\ 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 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, 
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municipal entities, obligated persons, and the public interest.

    The proposed rule change's clarification that underwriters are 
obligated to manually complete the three Amended Manual Fields on 
Amended Form G-32 would (1) promote just and equitable principles of 
trade, (2) foster cooperation and coordination with persons engaged in 
regulating and processing information

[[Page 68398]]

with respect to transactions in municipal securities and municipal 
financial products, and (3) remove impediments to and perfect the 
mechanism of a free and open market in municipal securities and 
municipal financial products, by providing greater transparency and 
certainty regarding the regulatory obligations of underwriters 
completing Amended Form G-32.
    The proposed rule change would promote just and equitable 
principles of trade by resolving potential regulatory ambiguities and 
making clear that, when applicable to a primary offering, an 
underwriter is effectively required to ensure that all applicable 
fields are complete and accurate, which may require manually completing 
these three fields on Amended Form G-32. In this way, the proposed rule 
change's clarifications would broadly benefit any dealer who acts, or 
may act, as an underwriter of a primary offering of municipal 
securities.
    Similarly, the proposed rule change would also foster cooperation 
and coordination with persons engaged in regulating and processing 
information with respect to transactions in municipal securities and 
municipal financial products. The MSRB believes that the benefits of 
the proposed rule change will not only accrue to dealer firms, but also 
to regulated-entity examiners, other regulators, and data vendors by 
mitigating potential ambiguity and confusion. Just as it would be 
beneficial to dealer firms to have a uniform clarified understanding of 
the regulatory obligations associated with Amended Form G-32, the 
proposed rule change would similarly benefit these other market 
participants by ensuring that the data submitted for Amended Form G-32 
is complete and accurate regardless of whether the dealer directly 
interfaces with NIIDS or utilizes the interface of a third-party 
vendor.
    Lastly, the MSRB believes that the proposed rule change would 
remove impediments to and perfect the mechanism of a free and open 
market in municipal securities and municipal financial products by 
promoting the successful completion of Amended Form G-32 by 
underwriters, which will allow the MSRB to more reliably collect 
information through the Amended Manual Fields on Amended Form G-32. 
Specifically, and as indicated in the Primary Offering Practices 
Amendments,\26\ the need to clarify that an underwriter must manually 
complete the Amended Manual Fields will result in more accurate 
information reported to the MSRB. This collection of accurate 
information would enhance the MSRB's regulatory transparency 
initiatives and facilitate the MSRB's own usage of data, which the MSRB 
believes helps remove impediments to and promote the mechanisms of a 
free and open market.
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    \26\ See File No. SR-MSRB-2019-07, at p. 26 and related 
discussion (``Broadly speaking, the need for the two categories of 
proposed additional data fields on Form G-32 arises from the fact 
that the existing information not currently on Form G-32, but 
proposed to be included, would enhance the MSRB's regulatory 
transparency initiatives and facilitate the MSRB's own usage of 
data.'').
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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.\27\ The 
MSRB has considered the economic impact associated with the proposed 
rule change, including a comparison to reasonable alternative 
regulatory approaches, relative to the baseline.\28\ The MSRB does not 
believe that the proposed rule change would impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Exchange Act.
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    \27\ 15 U.S.C. 78o-4(b)(2)(C).
    \28\ See Policy on the Use of Economic Analysis in MSRB 
Rulemaking, available at http://msrb.org/Rules-and-Interpretations/Economic-Analysis-Policy.aspx. In evaluating whether there was a 
burden on competition, the Board was guided by its principles that 
required the Board to consider costs and benefits of a rule change, 
its impact on capital formation and the main reasonable alternative 
regulatory approach.
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    The proposed rule change would clarify that the three Amended 
Manual Fields effectively must be manually entered on Amended Form G-
32. The Primary Offering Practices Amendments required the 57 Auto-
Populated Fields that could be auto-populated from NIIDS on Form G-32 
as well as the submission of nine additional data fields not previously 
in NIIDS on Form G-32, as applicable.\29\ The MSRB stated that the 
proposed change to Rule G-32 and Form G-32 was needed to increase 
regulatory transparency in the primary offering process and secondary 
market trading, to ensure MSRB's continued access to important new 
issue information, to address possible information asymmetry that 
arises from certain market practices and to improve the overall 
efficiency of the market. The MSRB continues to believe in the 
necessity of collecting these data fields at the present.
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    \29\ These nine fields consist of: Ability for minimum 
denomination to change, additional syndicate managers, call 
schedule, legal entity identifiers for credit enhancers and 
obligated persons, name of municipal advisor, name of obligated 
person, the dollar amount of CUSIP advance refunded, restrictions on 
the issue and retail order period by CUSIP number.
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    The proposed rule change is necessary because the Amended Manual 
Fields are not being disseminated by DTCC's NIIDS service. While at the 
time of the Primary Offering Practices Amendments, the MSRB believed 
the fields were part of NIIDS, they were later verified as not being 
processed by DTCC and therefore are not available for usage at this 
time. Therefore, the proposed rule change would clarify that an 
underwriter of a NIIDS-eligible primary offering of municipal 
securities is obligated to manually complete the Amended Manual Fields 
on Amended Form G-32, but only when such fields are applicable to the 
new issue.\30\ The MSRB believes that the proposed rule change is 
necessary to ensure that the MSRB would have reliable access to 
important primary offering information. Without requiring the manual 
completion of these fields on Amended Form G-32, the MSRB could not 
fully achieve the benefits that were intended from the Primary Offering 
Practices Amendments, including enhanced regulatory transparency and 
the option to disseminate the information in the future, from being 
fully realized.
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    \30\ As described in the Primary Offering Practices Amendments, 
except for the one data field that indicates the original minimum 
denomination of the offering, an underwriter of a non-NIIDS-eligible 
offering is exempt from the requirement to manually complete the 
other 56 data fields on Amended Form G-32 that the underwriter 
already is required to input into NIIDS. See, e.g., File No, SR-
MSRB-2019-07, at p. 8 (``For non-NIIDS- eligible offerings, the 
underwriter would be required to manually complete the data field 
that indicates the original minimum denomination of the 
offering.''). In this way, the underwriter of a non-NIIDS-eligible 
offering is exempt from the requirement to complete the Amended 
Manual Fields. Nevertheless, of the nine data fields on Amended Form 
G-32 that are not already input into NIIDS, it should also be noted 
that such an underwriter of a non-NIIDS-eligible offering is 
additionally required to manually complete the data fields on 
Amended Form G-32 that indicate whether the minimum denomination for 
the issue has the ability to change and whether the primary offering 
is being made with restrictions. See id (``. . . underwriters in 
non-NIIDS-eligible offerings would be required to manually complete 
the data fields that provide a `yes/no' flag to indicate whether the 
minimum denomination for the issue has the ability to change and the 
`yes/no' flag to indicate if the primary offering is being made with 
restrictions.'').
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Benefits and Costs
    The MSRB evaluates the baseline for the benefits and costs analysis 
to be the current state with the implementation of the 2019 Primary 
Offering Practices Amendments.
    The information collected from these three fields would immediately 
enhance regulatory transparency, facilitate the

[[Page 68399]]

MSRB's own usage of data, as well as help promote a more efficient 
secondary market for municipal securities should the MSRB choose to 
disseminate some or all of the information in the future. The proposed 
rule change would clarify underwriters' responsibilities, reduce their 
confusion, and ensure that the MSRB would have reliable access to vital 
primary offering information now and in the future without depending on 
third party data providers and utilities.
    In the context of this amendment, the relevant costs for 
underwriters are those associated with manually providing information 
on Amended Form G-32 for Amended Manual Fields that cannot be auto-
populated from NIIDS, including, among other things, updating their 
policies, procedures, training, and supervisory systems to ensure the 
Amended Manual Fields are so completed, as well as the time and expense 
associated with completing these three fields when, respectively, 
applicable to a primary offering of municipal securities. The 
additional cost imposed on certain market participants to input 
information manually onto Form G-32, when available, should be limited, 
which may include, for example, additional time for data entry onto 
MSRB's portal and to review information for accuracy. It is useful to 
consider each of the below elements individually:
     BQ Data Field--The proposed rule change would clarify that 
the ``yes/no'' flag on Amended Form G-32 would, when applicable, need 
to be manually completed by an underwriter to indicate whether a bank 
can deduct a portion of the interest cost of the carry for the position 
in accordance with the applicable provisions of the code of the 
Internal Revenue Service. The MSRB believes the costs associated with 
manual completion on Amended Form G-32 would be negligible.
     PAC Bond Data Field--The proposed rule change would 
clarify that the ``yes/no'' flag on Amended Form G-32 would, when 
applicable, need to be manually completed by an underwriter to indicate 
whether the offering is an asset-backed bond payable with a fixed 
sinking fund schedule. The MSRB believes the costs associated with 
manual entry on Amended Form G-32 would be negligible.
     Put Date Field--The proposed rule change would clarify 
that data fields relating to whether the offering is puttable on Form 
G-32 would, when applicable, need to be manually completed by an 
underwriter to indicate when a put end date is defined at the time of 
issuance. Therefore, the costs associated with providing this 
information on Form G-32 primarily take the form of additional time 
needed to complete Form G-32. The MSRB believes that the time required 
to manually complete the information on Amended Form G-32 would not be 
significant.
    In addition, the MSRB believes that the costs associated with the 
proposed rule change are relatively minor, in that the three Amended 
Manual Fields will be applicable to a relatively small fraction of the 
overall number of primary offerings in the municipal securities market. 
This should limit the actual burdens on underwriting firms of 
completing the Amended Manual Fields on Amended Form G-32. Moreover, 
given that firms are already updating policies and procedures related 
to the Primary Offering Practices Amendments, the MSRB believes that 
the costs of compliance associated with the proposed rule change can be 
mitigated by incorporating such costs into existing compliance efforts 
resulting from Amended Form G-32 and its New Data Fields.
    Altogether, the MSRB believes that the benefits of the proposed 
rule change outweigh its costs, as underwriters and other market 
participants will benefit from the increased transparency and certainty 
regarding Amended Form G-32 and the MSRB regulatory efforts will 
benefit from the collection of accurate data from the Amended Manual 
Fields.\31\
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    \31\ Consistent with the Primary Offering Practices Amendments, 
the MSRB believes that the immediate increase in regulatory 
transparency and enhanced quality control, along with the potential 
long-term accrued benefits of disseminating the information, in the 
future, would outweigh the burden imposed on underwriters. See File 
No, SR-MSRB-2019-07, at p. 31.
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Effect on Competition, Efficiency, and Capital Formation
    Since the proposed rule change would apply equally to all primary 
offerings and associated underwriters, it should not impose a burden on 
competition, efficiency, or capital formation. Moreover, since the 
proposed rule change is intended to increase regulatory transparency 
regarding the obligation of underwriters to manually complete the 
Amended Manual Fields, it may increase the efficiency of underwriters 
fulfilling their obligations under Rule G-32, as underwriters would be 
on notice of the lack of auto-population for these three fields on 
Amended Form G-32 and, thereby, avoid certain costs associated with 
resolving a potentially ambiguous regulatory obligation. In this way, 
the MSRB believes that underwriters are likely to avoid the potential 
for regulatory misinterpretation and confusion, which promotes a fairer 
and more efficient municipal securities market. The MSRB believes an 
efficient market would improve capital formation.
Evaluation of Reasonable Alternatives
    The MSRB has considered one alternative to collect this information 
from a third-party data vendor other than NIIDS, to the extent one 
exists. However, this would require the MSRB to negotiate with the 
third-party data vendor to obtain the information. In addition, 
reliance on third-party vendors could limit the MSRB's flexibility and 
latitude in its usage of the data, including potentially making the 
data available to the market in the future, thus hindering the goal of 
increased regulatory transparency.
    Similarly, the MSRB considered filing alternatives to the proposed 
rule change that either eliminated the Amended Manual Fields from 
Amended Form G-32 or made the Amended Manual Fields on Amended Form G-
32 optional. The MSRB decided the proposed rule change was superior to 
these alternatives because such alternatives would eliminate the 
benefit of the MSRB receiving this data. While such proposals would 
eliminate many of the regulatory burdens associated with the proposed 
rule change, the MSRB believes that the benefits of the proposed rule 
change outweigh the costs associated with receiving accurate data from 
an underwriter on whether a primary offering is bank qualified, 
composed of PAC Bonds, or puttable by a certain date.\32\ Importantly, 
given that NIIDS cannot be relied upon by the MSRB for accurate 
information in the identification of such offerings, the MSRB believes 
that the proposed rule change provides a unique source of reliable data 
on such offerings and so is highly beneficial.
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    \32\ The MSRB believes that such filing would not eliminate all 
burdens on firms that act as underwriters, as, for example, 
underwriting firms would have to amend their policies and procedures 
in relation to such filings.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Board did not solicit nor receive written comments on the 
proposed rule change's clarification that underwriters are obligated to 
manually complete the

[[Page 68400]]

three Amended Manual Fields on amended Form G-32.\33\
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    \33\ As previously noted, the proposed rule change seeks to 
clarify amendments to Amended Form G-32, resulting from the 
authorization and approval by the SEC of the MSRB's Primary Offering 
Practices Amendments. Comments to the Primary Offering Practices 
Amendments were previously summarized by the MSRB and can be found 
in the rulemaking transcript associated with File No. SR-MSRB-2019-
07. See File No. SR-MSRB-2019-07, at p. 32; see also comment letter 
from Margaret R. Blake, Associate General Counsel, MSRB (June 6, 
2019) (summarizing and responding to comment letters to the Primary 
Offering Practices Amendments) (the ``Blake Letter''), available at 
https://www.sec.gov/comments/sr-msrb-2019-07/srmsrb201907-5639704-185629.pdf. As noted in the Blake Letter, ``[c]ommenters did not 
raise concerns regarding the proposed addition of 57 data fields on 
Form G-32 that would be auto-populated from NIIDS[,]'' but 
commenters did express, ``. . . concern regarding the proposed 
addition of the nine data fields for manual completion in NIIDS-
eligible offerings, noting that the addition of these fields would 
create an additional burden on underwriters and introduce the risk 
of error in data entry.'' Blake Letter, p. 5. In this way, the MSRB 
believes comments to the Primary Offering Practices Amendments in 
support of the inclusion of the three Amended Manual Fields on 
Amended Form G-32 are not germane to the proposed rule change, 
because, among other reasons, the proposed rule change raises novel 
issues.
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III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period of up to 90 days (i) as 
the Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 rule-comments@sec.gov. Please 
include File Number SR-MSRB-2020-08 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-2020-08. 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-2020-08 and should be submitted on 
or before November 18, 2020.

    For the Commission, pursuant to delegated authority.\34\
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    \34\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-23795 Filed 10-27-20; 8:45 am]
BILLING CODE 8011-01-P