[Federal Register Volume 60, Number 51 (Thursday, March 16, 1995)]
[Notices]
[Pages 14313-14314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6444]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35467; File No. SR-MSRB-95-1]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the Municipal 
Securities Rulemaking Board Relating to an Extension of the CDI Pilot 
System from April 6, 1995 Through December 31, 1995

March 10, 1995.
    On March 7, 1995, the Municipal Securities Rulemaking Board 
(``Board'' or ``MSRB'') filed with the Securities and Exchange 
Commission (``Commission'' or ``SEC'') a proposed rule change (File No. 
SR-MSRB-95-1), pursuant to Section 19(b)(1) of the Securities Exchange 
Act of 1934 (``Act''), 15 U.S.C. 78s(b)(1), and Rule 19b-4 thereunder. 
The proposed rule change is described in Items I, II, and III below, 
which Items have been prepared by the Board. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested people. The Board has requested accelerated approval of 
the proposed rule change in order to permit the Pilot system to 
continue to operate without interruption.

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Board is filing herewith a proposed rule change to request an 
extension, from April 6, 1995, through December 31, 1995, of its 
Continuing Disclosure Information (``CDI'') Pilot system of the 
Municipal Securities Information Library (MSIL) system.\1\

    \1\The MUNICIPAL SECURITIES INFORMATION LIBRARY system and the 
MSIL system are trademarks of the Board. The MSIL system, which was 
approved in Securities Exchange Act Release No. 29298 (June 13, 
1991) 56 FR 28194, is a central facility through which information 
about municipal securities is collected, stored and disseminated.
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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 Board 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 Board 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

    (a) On April 6, 1992, the SEC approved the CDI Pilot system for an 
18-month period.\2\ The CDI Pilot system began operating on January 23, 
1993, and functions as part of the Board's MSIL system. The CDI Pilot 
system accepts and disseminates voluntary submissions of official 
disclosure notices relating to outstanding issues of municipal 
securities, i.e., continuing disclosure information. During its first 
phase of operation, the system accepted disclosure notices only from 
trustees. On May 17, 1993, the Pilot system also began accepting 
notices from issuers.\3\ On September 1, 1993, the Commission approved 
an 18-month extension of the Pilot system, which extension will expire 
on April 6, 1995.\4\

    \2\Securities Exchange Act Release No. 30556 (April 6, 1992), 57 
FR 12534. A complete description of the CDI system is contained in 
File No. SR-MSRB-90-4, Amendment No. 1.
    \3\On May 17, 1993, the Board reported to the Commission on the 
initial phase of operation of the CDI system regarding technical, 
policy and cost issues and proposed enhancements to the system.
    \4\Securities Exchange Act Release No. 32825 (September 1, 
1993), 58 FR 47306.
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    On November 10, 1994, the Commission approved amendments to its 
Rule 15c2-12 which prohibit a dealer from underwriting a new issue of 
municipal securities unless the issuer commits, among other things, to 
provide material events notices to the Board's CDI Pilot system or to 
all Nationally Recognized Municipal Securities Information Repositories 
(``NRMSIRs'') and to the applicable state information depository.\5\ In 
addition, the Rule prohibits a dealer from recommending the purchase or 
sale of a municipal security unless the dealer has in place procedures 
that provide reasonable assurance that it will receive prompt notice of 
material events.\6\ The Board is considering certain changes to the CDI 
Pilot system consistent with the new Commission requirements, including 
reconsideration of certain issuer and trustee enrollment procedures and 
page limits on submissions.

    \5\Securities Exchange Act Release No. 34961 (November 10, 
1994), 59 FR 59590. This provision of the Rule will become effective 
on July 3, 1995.
    \6\The effective date of this provision of the Rule is January 
1, 1996.
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    The Board believes that an extension of the operation of the CDI 
Pilot system will give it sufficient time to determine the system 
changes needed, in consultation with the Commission as well as 
potential users of the system, including NRMSIRs. We anticipate filing 
system changes well before the December 31, 1995, extension date. At 
that time, the Board also plans to ask the Commission for permanent 
approval of the revised CDI system.
    (b) The Board believes the proposed rule change is consistent with 
Section 15B(b)(2)(C) of the Act, which provides that the Board'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 MSIL system is designed to increase the integrity and 
efficiency of the municipal securities market by, among other things, 
helping to ensure that the price charged for an issue in the secondary 
market reflects all available official information about that issue. 
The Board will continue to operate the output of the CDI Pilot system 
to ensure that the information is available to any party who wishes to 
subscribe to the service. As with all MSIL system services, this 
service is available, on equal terms, to any party requesting the 
service.

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

    The Board does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.

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.

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

    The Board has requested that the Commission find good cause, 
pursuant to Section 19(b)(2) of the Act, for approving the proposed 
rule change prior to the thirtieth day after [[Page 14314]] publication 
of the notice of filing in the Federal Register. The Board believes 
that such accelerated approval would permit the Pilot system to 
continue to operate without interruption. The Board further believes 
that the CDI Pilot system will increase the integrity and efficiency of 
the municipal securities market by helping to ensure that the price 
charged for an issue in the secondary market reflects all available 
official information about that issue.

IV. Solicitation of Comments

    Interested people are invited to submit written data, views, and 
arguments concerning the foregoing. People making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
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 the 
Commission's Public Reference Room. Copies of the filing will also be 
available for inspection and copying at the Board's principal offices. 
All submissions should refer to File No. SR-MSRB-95-1 and should be 
submitted by April 6, 1995.

V. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    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 Board, and, in particular, the 
requirements of Section 15B and the rules and regulations thereunder.
    The Commission finds good cause for approving the proposed rule 
change prior to the thirtieth day after the date of publication of the 
notice of filing in the Federal Register, in that accelerated approval 
is appropriate to provide for uninterrupted operation of the CDI 
system.
    It Is Therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change be, and hereby is, approved for 
an additional 8-month period ending on December 31, 1995.

    \7\15 U.S.C. 78s(b)(2).
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    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\

    \8\17 U.S.C. 200.30-3(a)(12)
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-6444 Filed 3-15-95; 8:45 am]
BILLING CODE 8010-01-M