Document ID: SEC-2008-0873-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Municipal Securities Rulemaking Board
Posted Date: 2008-07-01T04:00Z

[Federal Register: July 1, 2008 (Volume 73, Number 127)]
[Notices]               
[Page 37518-37519]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jy08-81]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58016, File No. SR-MSRB-2008-04]

 
Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Granting Approval of Proposed Rule Change Relating to MSRB 
Rule G-34, CUSIP Numbers and New Issue Requirements, to Require 
Underwriter Registration and Testing with Depository Trust and Clearing 
Corporation's New Issue Information Dissemination System

June 25, 2008.
    On May 9, 2008, the Municipal Securities Rulemaking Board 
(``MSRB''), filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change consisting of changes to Rule G-34, CUSIP Numbers 
and New Issue Requirements. The proposed rule change was published for 
comment in the Federal Register on May 22, 2008.\3\ The Commission 
received no comment letters about the proposed rule change. This order 
approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57830 (May 16, 
2008), 73 FR 29799 (May 22, 2008) (``Commission's Notice'').
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    The proposed rule change would require underwriters to register and 
conduct tests with the Depository Trust and Clearing Corporation's 
(``DTCC'') New Issue Information Dissemination System (``NIIDS''). The 
proposed rule change would help ensure that dealers are prepared for 
the September 30, 2008 effective date of changes to other MSRB rules to 
require underwriters to participate in NIIDS.\4\ Accordingly, the 
proposed rule change would require all brokers, dealers and municipal 
securities dealers (collectively ``dealers'') that have acted as 
underwriter \5\ in the last year on a new issue of municipal securities 
with nine months or greater effective maturity to register to use NIIDS 
with DTCC and successfully test NIIDS prior to September 15, 2008.\6\ 
On an ongoing

[[Page 37519]]

basis the proposed rule change would require dealers to register to use 
NIIDS with DTCC and successfully test NIIDS prior to acting as 
underwriter on a new issue of municipal securities with nine months or 
greater effective maturity. A full description of the proposal is 
contained in the Commission's Notice.
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    \4\ See Securities Exchange Act Release No. 57750 (May 1, 2008), 
73 FR 25815 (May 7, 2008).
    \5\ Rule G-34 defines ``underwriter'' very broadly to include a 
dealer acting as a placement agent as well as any dealer purchasing 
new issue securities from the issuer as principal. If there is an 
underwriting syndicate, the lead manager is considered to be the 
``underwriter'' for purposes of Rule G-34.
    \6\ Many underwriters have already registered with DTCC and 
initiated NIIDS testing. The proposed rule change would place a 
deadline on underwriters to register with DTCC and complete NIIDS 
testing. Underwriters that have already satisfied the requirements 
of the proposed rule change prior to SEC approval are not required 
to re-register or re-test.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to the MSRB \7\ and, in particular, the 
requirements of Section 15B(b)(2)(C) of the Act \8\ and the rules and 
regulations thereunder. Section 15B(b)(2)(C) of the Act requires, among 
other things, that the MSRB's rules 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.\9\ In particular, the 
Commission finds that the proposed rule change is consistent with the 
Act because it will allow the municipal securities industry to produce 
more accurate trade reporting and transparency.
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    \7\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition and capital formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78o-4(b)(2)(C).
    \9\ Id.
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-MSRB-2008-04), be, and it 
hereby is, approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Florence E. Harmon,
Acting Secretary.
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    \11\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-14857 Filed 6-30-08; 8:45 am]

BILLING CODE 8010-01-P