[Federal Register Volume 60, Number 90 (Wednesday, May 10, 1995)]
[Notices]
[Pages 24948-24950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11517]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35674; File No. SR-MSRB-95-05]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change Modifying The Applicable Time Frames for Customer Account 
Transfers

May 4, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on march 31, 1995, the 
Municipal Securities Rulemaking Board (``MSRB'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change (File No. SR-MSRB-95-5) as described in Items I, II, and III 
below, which items have been prepared primarily by the MSRB. The 
Commission is publishing this notice to [[Page 24949]] solicit comments 
on the proposed rule change from interested persons.

    \1\15 U.S.C. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of the proposed rule is to modify MSRB Rule G-26 
regarding customer account transfers to require that a dealer carrying 
a customer account in municipal securities validate and return customer 
account transfer instructions to the dealer designated to receive the 
account within three business days and that the dealer carrying the 
account complete the transfer of the account within four business days 
after validation of the transfer instructions.
    The proposed rule change supports the movement of the securities 
industry to three-day settlement in June 1995 and parallels recent 
amendments to the customer account transfer rules of the New York Stock 
Exchange (``NYSE'')\2\ and the National Association of Securities 
Dealers (``NASD'').\3\ Recent enhancements also were made to the 
Automated Customer Account Transfer System operated by National 
Securities Clearing Corporation (``NSCC'') accelerating the time in 
which an account can be transferred.\4\ The proposed rule change is 
consistent with those enhancements. The MSRB requests that the 
Commission set the effective date for thirty days after filing.

    \2\For a description of the NYSE's amendments to its customer 
account transfer rules, refer to Securities Exchange Act Release No. 
34633 (September 2, 1994), 59 FR 46872 [File No. SR-NYSE-94-21] 
(approving proposed rule change).
    \3\For a description of the NASD's amendments to its customer 
account transfer rules, refer to Securities Exchange Act Release No. 
35031 (November 30, 1994), 59 FR 62761 [File No. SR-NASD-94-56] 
(granting partial accelerated approval of proposed rule change).
    \4\For a description of the NSCC's enhancements to its customer 
account transfer system, refer to Securities Exchange Act Release 
No. 34879 (October 21, 1994), 59 FR 54229 [File No. SR-NSCC-94-13] 
(approving proposed rule change).
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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 MSRB included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments that 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.\5\

    \5\The Commission has modified the text of the summaries 
prepared by MSRB.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In October 1993, the Commission adopted Rule 15c6-1\6\ under the 
Act which establishes three business days after the trade date 
(``T+3''), instead of five business days (``T+5''), as the standard 
settlement cycle for most securities transactions.\7\ The rule will 
become effective June 7, 1995.\8\ Although municipal securities were 
not included within the scope of Rule 15c6-1, the Commission asked the 
Board to undertake a commitment to T+3 settlement for the municipal 
securities industry.\9\

    \6\17 CFR 240.15c6-1.
    \7\Securities Exchange Act Release No. 33023 (October 6, 1993), 
58 FR 52891 (adoption of Rule 15c6-1).
    \8\Securities Exchange Act Release No. 34952 (November 9, 1994, 
59 FR 59137 (changing effective date from June 1, 1995 to June 7, 
1995).
    \9\Securities Exchange Act Release No. 33023 (October 6, 1993), 
58 FR 52891 (adoption of Rule 15c6-1).
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    On February 28, 1995, the Commission approved amendments to MSRB 
rules G-12 on uniform practice and rule G-15 on confirmation, 
clearance, and settlement of transactions with customers redefining 
regular-way settlement as three business days.\10\ In addition, the 
MSRB has been reviewing its rules to determine if there are other 
appropriate changes to its rules that need to be made to facilitate the 
movement to T+3 settlement. The current proposed amendment to rule G-26 
has been identified as such a necessary change.

    \10\Securities Exchange Act Release No. 35427 (February 28, 
1995, 60 FR 12798 [File No. SR-MSRB-94-10] (approving proposed rule 
change).
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    The proposed rule change would require that a dealer carrying a 
customer account in municipal securities validate and return customer 
account transfer instructions to the dealer designated to receive the 
account within three business days following receipt of the transfer 
instructions. The rule currently allows five business days for this to 
occur. In addition, the dealer carrying the account would be required 
to complete the transfer of the account within four business days 
following validation of the transfer instructions in lieu of five 
business days as is currently stated in the rule.
    As set forth in Section 15B(b)(2)(C)\11\ of the Act, the MSRB has 
the authority to adopt rules to foster cooperation with persons engaged 
in regulating, clearing, settling, processing information with respect 
to, and facilitating transactions in municipal securities. The MSRB 
believes the proposed rule change is consistent with Section 
15B(b)(2)(C) because the proposal promotes uniformity with the customer 
account transfer procedures of the other self-regulatory organizations 
thereby providing greater efficiency in the transfer of customer 
accounts.

    \11\15 U.S.C. 78o-4(b)(2)(C).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    The MSRB 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

    The MSRB has neither solicited nor received comments 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: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
(3) was provided to the Commission for its review at least five days 
prior to the filing date; and (4) does not become operative for thirty 
days from the date of its filing on March 31, 1995, the proposed rule 
change has become effective pursuant to Section 19(b)(3)(A) of the Act 
and Rule 19b-4(e)(6) thereunder. In particular, the Commission believes 
the proposal would qualify as a ``non-controversial filing'' in that 
the proposed standards do not significantly affect the protection of 
investors or the public interest and do not impose any significant 
burden on competition. At any time within sixty 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. Persons making written submissions 
should file six copies thereof with the [[Page 24950]] Secretary, 
Securities and Exchange Commission, 450 Fifth Street NW., Washington, 
DC 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, 450 Fifth Street 
NW., Washington, DC 20549. Copies of such filing will also be available 
for inspection and copying at the principal office of the MSRB. All 
submissions should refer to the file number SR-MSRB-95-05 and should be 
submitted by May 31, 1995.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\12\

    \12\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-11517 Filed 5-9-95; 8:45 am]
BILLING CODE 8010-01-M