[Federal Register Volume 63, Number 14 (Thursday, January 22, 1998)]
[Notices]
[Pages 3367-3368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1423]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39546; File No. SR-MSRB-97-17]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Municipal Securities
Rulemaking Board Relating to Underwriting and Transaction Assessments
January 13, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on December
23, 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-
97-17). 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.
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 A-13 on
Underwriting and Transaction Assessments. The proposed rule change to
rule A-13 would clarify that the fee currently assessed for inter-
dealer transactions reported to the Board will not automatically apply
to customer transactions once they are reported under Board rule G-14.
The text of the proposed rule change is below. Additions are in
italics. Rule A-13 + Underwriting and Transaction Assessments for
Brokers, Dealers and Municipal Securities Dealers.
(a)-(b) No change.
(c) Transaction Assessments. Each broker, dealer and municipal
securities dealer shall pay to the Board a fee equal to .0005% ($.005
per $1,000) of the total par value of inter-dealer municipal securities
sales that it reports to the Board under rule G-14(b). For those
transactions reported to the Board by a broker, dealer or municipal
securities dealer on behalf of another broker, dealer or municipal
securities dealer, the transaction fee shall be paid by the broker,
dealer or municipal securities dealer that reported the transaction to
the Board. Such broker, dealer or municipal securities dealer may then
collect the transaction fee from the broker, dealer or municipal
securities dealer on whose behalf the transaction was reported.
(d)-(f) No change.
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
1. Purpose
The Board currently assesses dealers a fee equal to .0005% of par
value of the dealers' inter-dealer sales transactions in municipal
securities, as reported to the Board under rule G-14(b). As indicated
in Board rule filings and notices concerning the fee, this fee was
intended to apply exclusively to inter-dealer transactions.\1\ Since
the language of rule A-13 was written when inter-dealer transactions
were the only transactions that were being reported to the Board, rule
A-13(c) now simply states that the transaction assessment will apply to
``municipal securities sales that [the dealer] reports to the Board
under rule G-14.'' In its rule filings and notices on rule A-13(c), the
Board stated its intent to add customer transactions to those reported
under rule G-14(b). The Board also noted that, once customer
transactions are reported to the Board under rule G-14, the Board would
review the use of customer transaction activity as a means of assessing
fees. The Board, however, did not intend that the fee set for inter-
dealer transactions would apply automatically to customer transactions
that are reported under rule G-14.
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\1\ See, e.g., SR-MSRB-95-13 and Commission Order of Approval,
Securities Exchange Act Release No. 37197 (May 10, 1996).
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The Board is in the process of implementing the customer
transaction phase of the Transaction Reporting Program. This will
result in dealer-customer transactions, as well as inter-dealer
transactions, being reported to the Board under rule G-14(b), beginning
in March 1998. To clarify that the current language of rule A-13(c)
applies only to inter-dealer transactions, the proposed rule change
simply adds the word ``inter-dealer'' to modify ``municipal securities
sales.'' The Board continues to intend to review customer transaction
activity, once it becomes available in the Transaction Reporting
Program, as a means to more equitably assess fees.
2. Basis
The Board believes the proposed rule change is consistent with
Section 15B(b)(2)(J) of the Act, which provides that the Board's rules
shall:
provide that each municipal securities broker and municipal
securities dealer shall pay to the Board such reasonable fees and
charges as may be necessary or appropriate to defray the costs and
expenses of operating and administering the Board. Such rules shall
specify the amount of such fees and charges.
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 since it would apply equally to
all brokers, dealers and municipal securities dealers and is simply a
technical change in rule language not affecting the effect or
application of the rule.
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 proposed rule change is merely a technical correction
of rule language, the Board has designated this proposed rule change as
constituting a stated policy, practice, or interpretation with respect
to the meaning, administration, or enforcement of an existing Board
rule under Section
[[Page 3368]]
19(b)(3)(A) of the Act, which renders the proposed rule change
effective upon receipt of this filing by the Commission. 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 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-97-17 and should be
submitted by February 12, 1998.
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. 98-1423 Filed 1-21-98; 8:45 am]
BILLING CODE 8010-01-M