[Federal Register Volume 60, Number 124 (Wednesday, June 28, 1995)]
[Notices]
[Pages 33447-33448]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-15809]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35879; File No. SR-MSRB-95-11]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Municipal Securities 
Rulemaking Board Relating to Interpretation of Rule G-37 on Political 
Contributions and Prohibitions on Municipal Securities Business

June 21, 1995.
    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, notice is 
hereby given that on June 16, 1995, the Municipal Securities Rulemaking 
Board (``Board'' or ``MSRB'') filed with the Securities and Exchange 
Commission (``Commission'' or ``SEC'') a proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the Board. The purpose of the proposed rule change is to provide 
interpretative guidance concerning rule G-37 on political contributions 
and prohibitions on municipal securities business. The Board has 
designated this proposal as constituting a stated policy, practice, or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule of the Board under Section 19(b)(3)(A) 
of the Act, which renders the proposal effective upon receipt of this 
filing by the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.

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

    The Board is filing the proposed rule change to provide 
interpretative guidance concerning rule G-37 on political contributions 
and prohibitions on municipal securities business.\1\

    \1\ The Board plans to publish the interpretations in MSRB 
Reports Vol. 15, no. 2, at 3 (July 1995). The interpretations also 
are available for inspection and copying at the Commission's public 
reference room and at the Board.
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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

    On April 7, 1994, the Commission approved Board rule G-37, 
concerning political contributions and prohibitions on municipal 
securities business.\2\ Since that time, the Board has received 
numerous inquiries concerning the application of the rule. In order to 
assist the municipal securities industry and, in particular, brokers, 
dealers and municipal securities dealers in understanding and complying 
with the provisions of the rule, the Board published four prior notices 
of interpretation which set forth, in question-and-answer format, 
general guidance on rule G-37.\3\ In prior filings with the Commission, 
the Board stated that it will continue to monitor the application of 
rule G-37, and, from time to time, will publish additional notices of 
interpretations, as necessary.\4\ In light of questions recently 
received from market participants concerning the applicability of the 
rule to contributions to issuer officials seeking election to the U.S. 
Presidency, as well as the operation of the exemption provision set 
forth in section (i) of rule G-37, the Board has determined that it is 
necessary to provide further guidance to the municipal industry. 
Accordingly, the Board is publishing this fifth set of questions and 
answers.

    \2\ Securities Exchange Act Release No. 33868 (April 7, 1994), 
59 FR 17621 (April 13, 1994). The rule applies to contributions made 
on and after April 25, 1994.
    \3\ See Securities Exchange Act Release No. 34161 (June 6, 
1994), 59 FR 30379 (June 14, 1994); Securities Exchange Act Release 
No. 34603 (Aug. 25, 1994), 59 FR 45049 (Aug. 31, 1994); Securities 
Exchange Act Release No. 35128 (Dec. 20, 1994), 59 FR 66989 (Dec. 
28, 1994) and Securities Exchange Act Release No. 35544 (Mar. 28, 
1995), 60 FR 16896 (Apr. 3, 1995). See also MSRB Reports Vol. 14, 
No. 3 at 11-16 (June 1994); Vol. 14, No. 4 at 31-32 (August 1994); 
Vol. 14, No. 5 at 8 (December 1994) and Vol. 15, No. 1 (April 1995) 
at 21; MSRB Manual, General Rules, Rule G-37 (CCH) para. 3681.
    \4\ File Nos. SR-MSRB-94-6, SR-MSRB-94-15, SR-MSRB-94-16 and SR-
MSRB-95-02.
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    The Board believes that 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 
manicipal securities, and, in general, to protect investors and the 
public interest.

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

    Because the proposed rule change would apply equally to all 
brokers, dealers and municipal securities dealers, 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 foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(i) of the Act and subparagraph (e) of Rule 19b-4 
thereunder because the rule change constitutes a stated policy, 
practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule of the Board.
    At any time within 60 days of the filing of a rule change pursuant 
to Section 19(b)(3)(A) of the Act, the Commission may summarily 
abrogate the 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 Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., [[Page 33448]] 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. Copies of the filing 
will also be available for inspection and copying at the principal 
office of the Board. All submissions should refer to File No. SR-MSRB-
95-11 and should be submitted by July 19, 1995.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-15809 Filed 6-27-95; 8:45 am]
BILLING CODE 8010-01-M