[Federal Register Volume 62, Number 205 (Thursday, October 23, 1997)]
[Notices]
[Pages 55294-55295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28123]
[[Page 55294]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39251; File No. SR-MSRB-97-06]
October 16, 1997.
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Municipal Securities
Rulemaking Board Relating to Political Contributions and Prohibitions
on Municipal Securities Business, Consultants, and Recordkeeping
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on September 30, 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-97-6). 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 persons.
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\1\ 15 U.S.C. Sec. 78s(b)(1).
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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 rule G-37, on
political contributions and prohibitions on municipal securities
business, rule G-38, on consultants, and rule G-8, on recordkeeping
(hereafter referred to as the ``proposed rule change''). The proposed
rule change addresses the definitions of municipal finance professional
and executive officer, and when Form G-37/G-38 is due to be filed with
the Board.
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
During the past year, the Board has received questions regarding
certain technical aspects of rules G-37, G-38 and G-8. Specifically,
these questions have been concerned with the definitions of municipal
finance professional and executive officer, and when Form G-37/G-38 is
due to be filed with the Board. The proposed rule change addresses
these areas within the rules.
Definitions of Municipal Finance Professional and Executive Officer
The Board believes that some dealers are improperly classifying,
for rule G-37 purposes, certain individuals within their firms as
executive officers when these individuals actually meet the definition
of municipal finance professionals and should be classified as such.
Contributions by executive officers must be recorded and reported but,
unlike certain contributions by municipal finance professionals, would
not cause a prohibition on municipal securities business. The
definition of executive officer makes clear that municipal finance
professionals cannot also be executive officers. To further underscore
this point, the proposed rule change revises the name of the category
of individuals currently referred to as ``executive officers'' to
``non-MFP executive officers.'' This change in name should help dealers
avoid any misunderstandings that a person who functions as a municipal
finance professional cannot be classified, for purposes of rule G-37,
as an executive officer.
Due Date for Form G-37/G-38 to be Filed With the Board
Rules G-37 and G-38 state that Form G-37/G-38 must be submitted to
the Board ``within thirty (30) calendar days after the end of each
calendar quarter (these dates correspond to January 31, April 30, July
31 and October 31).'' Because of the inconsistency in the language for
those months with 31 days, the proposed rule change revises the rule
language to require that the forms be sent ``by the last day of the
month following the end of each calendar quarter.'' The forms do not
have to be received by the Board by the last day of the month following
the end of each calendar quarter, but the proposed rule change requires
that dealers must have the forms on their way to the Board by the last
day of the month following the end of each calendar quarter in order to
be in compliance with the delivery requirements of the rules.
The proposed rule change also contains non-substantive, technical
rule language changes to make similar requirements consistent
throughout the rules.
The Board believes the proposed rule change is consistent with
Section 15B(b)(2)(C) \2\ of the Act, which provides that the Board's
rules shall:
\2\ 15 U.S.C. Sec. 78o-4(b)(2)(C).
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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.
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
(30) days from the date of its filing on September 30, 1997, 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, and because it
makes technical clarifying changes to existing Board rule. 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
[[Page 55295]]
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 persons, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. Sec. 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-97-6 and
should be submitted by November 13, 1997.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\3\
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\3\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-28123 Filed 10-22-97; 8:45 am]
BILLING CODE 8010-01-M