Document ID: SEC-2020-1550-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Municipal Securities Rulemaking Board
Posted Date: 2020-09-30T04:00Z

[Federal Register Volume 85, Number 190 (Wednesday, September 30, 2020)]
[Notices]
[Pages 61780-61781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21556]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89994; File No. SR-MSRB-2020-06]

Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change Consisting of Amendments to the MSRB's Amended and Restated 
Articles of Incorporation

September 24, 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 September 15, 2020 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 its Amended and Restated Articles of 
Incorporation (``Articles of Incorporation'') to conform the Articles 
of Incorporation to recently-amended MSRB Rule A-3, on Board membership 
(``Rule A-3'') (the ``proposed rule change''). 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) 
\3\ of the Act and Rule 19b-4(f)(3) \4\ thereunder, which renders the 
proposal effective upon filing with the Commission.
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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/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
    On August 5, 2020, the Commission approved a proposed rule change 
that included amendments to Rule A-3.\5\ Among other things, the 
amendments reduced the Board's size from 21 to 15 members through a 
transition plan,\6\ modified the Board's class structure to reflect the 
reduction in Board size, and permitted a Board member filling a vacancy 
to serve for any part of an unexpired term, rather than requiring such 
a Board member to serve for the entire unexpired portion.
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    \5\ Exchange Act Release No. 89484 (Aug. 5, 2020), 85 FR 48579 
(Aug. 11, 2020) (File No. SR-MSRB-2020-04).
    \6\ Pursuant to the transition plan, the Board will include 17 
members during fiscal year 2021 and 15 members thereafter.
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    The Articles of Incorporation include provisions relating to Board 
size, class structure, and Board terms, which the proposed rule change 
would amend to conform to amended Rule A-3. To reflect the reduced 
Board size and modified class structure, the proposed rule change would 
amend the Articles

[[Page 61781]]

of Incorporation to refer to the By-Laws of the MSRB (``Bylaws''), 
which restate Rule A-3,\7\ for the specific number of directors on the 
Board and details regarding the Board's class structure. The Virginia 
Nonstock Corporation Act,\8\ pursuant to which the MSRB is organized 
under Virginia law, does not require the specific number of directors 
to be set forth in the Articles of Incorporation \9\ and the reference 
to the Bylaws for the specific number of directors and details 
regarding the Board's class structure would ensure consistency between 
the Articles of Incorporation and the Bylaws throughout the transition 
period and thereafter.
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    \7\ Specifically, Article 3 of the By-Laws restates Rule A-3.
    \8\ Va. Code Ann. Sec. Sec.  13.1-801 et seq. (2016).
    \9\ Va. Code Ann. Sec.  13.1-855(A) (2016) (``A board of 
directors shall consist of one or more individuals, with the number 
specified in or fixed in accordance with the bylaws, or if not 
specified in or fixed in accordance with the bylaws, with the number 
specified in or fixed in accordance with the articles of 
incorporation.'').
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    To incorporate amended Rule A-3's provision permitting a Board 
member filling a vacancy to serve for any part of an unexpired term, 
the proposed rule change would amend the Articles of Incorporation to 
incorporate the relevant language from amended Rule A-3.
    The proposed rule change will become operative on October 1, 2020, 
at the same time as the recently approved amendments to Rule A-3.\10\ 
The MSRB will file the Articles of Incorporation with the Commonwealth 
of Virginia in accordance with Virginia law.
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    \10\ Separately, the MSRB is also filing a proposed rule change 
consisting of additional amendments to Rule A-3 and amendments to 
MSRB Rule A-4 relating to Board quorum, meeting and voting 
requirements which would also become operative on October 1, 2020.
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Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2)(I) of the Exchange Act,\11\ which provides that the 
MSRB's rules shall:
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    \11\ 15 U.S.C. 78o-4(b)(2)(I).

provide for the 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.

    The proposed rule change is consistent with Section 15B(b)(2)(I) of 
the Exchange Act \12\ because it provides for the operation and 
administration of the Board in that it ensures that applicable 
provisions of Rule A-3 are properly reflected in the Articles of 
Incorporation. Specifically, the amendments to the Articles of 
Incorporation relating to the Board's size, the structure of the 
Board's classes, and vacancy terms are consistent with Section 
15B(b)(2)(I) of the Exchange Act \13\ because such amendments conform 
the Articles of Incorporation to amended Rule A-3, providing for 
operational and administrative consistency between the Articles of 
Incorporation and amended Rule A-3.
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    \12\ Id.
    \13\ Id.
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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.\14\ 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 that is not necessary 
or appropriate in furtherance of the purposes of the Exchange Act.
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    \14\ 15 U.S.C. 78o-4(b)(2)(C).
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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 \15\ and paragraph (f) of Rule 19b-4 
thereunder.\16\ 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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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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 rule-comments@sec.gov. Please 
include File Number SR-MSRB-2020-06 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-2020-06. 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-2020-06 and should be submitted on 
or before October 21, 2020.

    For the Commission, pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-21556 Filed 9-29-20; 8:45 am]
BILLING CODE 8011-01-P