[Federal Register Volume 62, Number 108 (Thursday, June 5, 1997)]
[Notices]
[Pages 30919-30920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14620]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38694; File No. SR-MSRB-97-3]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Municipal Securities 
Rulemaking Board Relating to Fee for Backlog Document Collection of its 
Official Statement/Advance Refunding Document Subsystem of the 
Municipal Securities Information Library

May 29, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 20, 1997, 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-97-3). 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 
establishing or changing a due, fee or other charge under Section 
19(b)(3)(A) of the Act,\2\ which renders the proposed rule change 
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.
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    \1\ 15 U.S.C. 78s(b)(1) (1988).
    \2\ 15 U.S.C. 78s(b)(3)(A).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The MSRB is filing herewith a proposed rule change to establish a 
fee relating to the operation of its Official Statement/Advance 
Refunding Document (``OS/ARD'') subsystem of the Municipal Securities 
Information Library (``MSIL'') system.\3\ The 
Board is establishing a price of $7,000 (plus delivery or postage 
charges) for its 1996 document collection of official statements and 
refunding documents, sold as a ``backlog'' collection.
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    \3\ 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), 56 FR 28194 (June 19, 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 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 
texts of these statements may be examined at the places specified in 
Item IV below. The Board has prepared summaries, set forth in Section 
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

    The OS/ARD subsystem, which was activated on April 20, 1992, is a 
central electronic facility through which information that is collected 
and stored pursuant to MSRB rule G-36 is made available electronically 
and in paper form to market participants and information vendors.\4\ 
The annual subscription fee for daily tapes of images of current year 
documents from the OS/ARD system currently is $14,000.\5\ The fees for 
backlog collections are substantially less than fees for an annual 
subscription because an annual subscription requires the Board to send 
a computer tape to the subscriber each business day, but a backlog day, 
but a backlog collection requires fewer tapes.\6\ The Board is 
establishing a price of $7,000 (plus delivery or postage charges) for 
the 1996 backlog collection.
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    \4\ Rule G-36 requires underwriters to provide copies of final 
official statements and advance refunding documents within certain 
specified time frames for most new issues issued since January 1, 
1990.
    \5\ This fee was filed with the Commission. Securities Exchange 
Act Release No. 37361 (June 25, 1996), 61 FR 34463 (July 2, 1996).
    \6\ Currently, several business day's worth of documents are on 
each tape in an annual collection. The backlog fee plus delivery 
costs for 1995 is $9,000; 1994 is $7,000; 1993 is $9,000; 1992 is 
$7,000; 1991 is $8,000; 1990 is $6,000. These fees were filed with 
the Commission. Securities Exchange Act Release No. 37361 (June 25, 
1996), 61 FR 34463 (July 2, 1996) (1996 and 1995 fees); Securities 
Exchange Act Release No. 35848 (June 14, 1995), 60 FR 32187 (June 
20, 1995) (1994 fee); Securities Exchange Act Release No. 32482 
(June 16, 1993), 58 FR 34115 (June 23, 1993) (1992 and 1990 fees); 
Securities Exchange Act Release No. 34602 (Aug. 25, 1994), 59 FR 
45319 (Sept. 1, 1994) (1993 and 1991 fees). The fees for the backlog 
collections vary based on the number of documents received and 
processed in any given year.
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    In its prior filings with the Commission, the Board stated that it 
intends to use its general revenues to help fund collecting, indexing 
and storing the OS/ARD subsystem's

[[Page 30920]]

documents. However, the Board stated its intention that the costs of 
producing and disseminating magnetic tapes (and paper copies) would be 
completely covered by user fees.\7\ The Board is establishing the 1996 
backlog collection fee to defray its cost of disseminating the 
collection tapes. This is consistent with the Commission's policy that 
self-regulatory organizations' fees be based on expenses incurred in 
providing information to the public.
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    \7\ Securities Exchange Act Release No. 28197 (July 12, 1990), 
55 FR 29436 (July 19, 1990).
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    The Board believes the proposed rule change is consistent with 
Section 15B(b)(2)(C) of the Act, which requires, in pertinent part, 
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 Board believes that employing cost-based prices is in the pubic 
interest since it will ensure that a complete collection of vital 
information will be available, at fair and reasonable prices, for the 
life of the municipal securities. 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 believes that the 1996 backlog 
fee is fair and reasonable in light of the costs associated with 
disseminating the information, and that the services provided by the 
MSIL system are available on reasonable and nondiscriminatory terms to 
any interested person.

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 designated this proposed rule change as establishing 
or changing a dues, fee or other charge under Section 19(b)(3)(A) of 
the Act,\8\ which renders the proposed rule change effective on May 20, 
1997, the date of receipt of this filing by the Commission.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
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    At any time within sixty days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change it if 
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., 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 Board's principal offices. 
All submissions should refer to File No. SR-MSRB-97-3 and should be 
submitted by June 26, 1997.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-14620 Filed 6-5-97; 8:45 am]
BILLING CODE 8010-01-M