[Federal Register Volume 61, Number 196 (Tuesday, October 8, 1996)]
[Notices]
[Pages 52819-52820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25761]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37771; File No. SR-MSRB-96-9]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Municipal Securities 
Rulemaking Board Relating to an Extension of the Continuing Disclosure 
Information (``CDI'') System From September 30, 1996, Through December 
31, 1996

October 1, 1996.
    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 August 21, 1996, 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-96-9). The proposed rule change is described in Items 
I, II, and III below, which Items have been prepared by the Board. The 
Board has designated this proposal as concerned solely with the 
administration of the Board under Section 19(b)(3)(A) of the Act, which 
renders the rule effective upon the Commission's receipt of this 
filing. 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 MSRB is filing a proposed rule change to request an extension, 
from September 30, 1996, through December 31, 1996, of its interim 
Continuing Disclosure Information (``CDI'') system of the Municipal 
Securities Information Library (MSIL) system.\1\ 
The Board requests that the Commission set the effective date for 30 
days after filing.
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    \1\ The Municipal Securities Information Library and MSIL are 
registered trademarks of the Board. The MSIL system, which 
was approved in Securities Exchange Act Release No. 29298 (June 13, 
1991), 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 Terms of Substance 
of 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 
texts 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 6, 1992, the Commission approved the CDI system for an 18-
month period.\2\ The CDI system began operating on January 23, 1993, 
and functions as part of the Board's MSIL system. The CDI 
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 system also began accepting disclosure 
notices from issuers.\3\
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    \2\ Sec. Exch. Act Rel. No. 30556 (April 6, 1992).
    \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.
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    On November 10, 1994, the Commission approved an amendment to its 
Rule 15c2-12 which prohibits dealers from underwriting issues of 
municipal securities unless the issuer commits, among other things, to 
provide material events notices to the Board's CDI system or to all 
Nationally Recognized Municipal Securities Information Repositories 
(``NRMSIRs'') and to the applicable state information depository.\4\ In 
addition, the Rule prohibits dealers from recommending municipal 
securities without having a system in place to receive material events 
notices. To conform to the new Commission requirements, the Board 
revised the CDI system and implemented an interim system designed to 
accept material event notices while a larger permanent system is being 
designed.\5\ The interim system increased the capacity of the system to 
process 200 documents per day and increased the page limit per document 
from three to 10. The Commission has approved operation of the interim 
system through September 30, 1996.\6\
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    \4\ Sec. Exch. Act Rel. No. 34961 (Nov. 10, 1994).
    \5\ The Board also terminated the pilot phase of the CDI System 
and filed its Report on the Conclusion of the CDI Pilot of the 
Municipal Securities Information Library System with the 
Commission on August 25, 1995.
    \6\ Sec. Exch. Act Rel. No. 35911 (June 28, 1995); Sec. Exch. 
Act Rel. No. 36610 (Dec. 20, 1995).
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    The Board is requesting an extension for the interim system to 
operate through December 31, 1996, to allow sufficient time for 
completion and testing of the permanent system. After consulting with 
users of the system, including NRMSIRs, the Board is in the final 
stages of developing the permanent CDI system and has begun testing the 
system design. The Board believes that an extension of the operation of 
the interim CDI system through December 31, 1996, will give it 
sufficient time to complete the system implementation. Prior to that 
time, and after system tests are complete, the Board will file a plan 
with the Commission for the permanent CDI system.
    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

[[Page 52820]]

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 side of the CDI 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

    Because the foregoing proposed rule change: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
(iii) was provided to the Commission for its review at least five days 
prior to the filing date; and (iv) does not become operative for thirty 
days from the date of its filing on August 21, 1996, 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 proposed rule change qualifies 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 Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
Copies of the submissions, 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-96-9 and should be 
submitted by October 29, 1996.

    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. 96-25761 Filed 10-7-96; 8:45 am]
BILLING CODE 8010-01-M