[Federal Register Volume 64, Number 215 (Monday, November 8, 1999)]
[Notices]
[Pages 60865-60869]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29156]


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SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42090; File No. SR-MSRB-99-8]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Municipal Securities Rulemaking Board Relating to Reports 
of Sales and Purchases, Pursuant to Rule G-14

November 2, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 7, 1999, the Municipal Securities Rulemaking Board 
(``Board'' or ``MSRB'') filed with the Securities and Exchange 
Commission (``Commission'' or ``SEC'') a proposed rule change. The 
proposed rule change is described in Items, I, II, and 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. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Board is filing this proposed rule change to institute a 
service (the ``Service'') to produce a daily public report containing 
information on individual transactions in frequently rated municipal 
securities (the ``Daily Transaction Report'' or ``Report''). The 
transaction information in the Report would come from dealer reports 
made to the Board pursuant to MSRB Rule G-14, which governs reports of 
sales or purchases. Rule G-14 currently requires dealers to report 
essentially all inter-dealer and customer transactions in municipal 
securities to the Board by midnight of the date of the trade.
    The proposed Report would be the third product offered by the Board 
to increase the amount of price transparency in the municipal 
securities market. Like the Board's current Combined and Inter-Dealer 
Daily Reports, the proposed Daily Transaction Report would provide 
information on ``frequently traded'' issues (i.e., issues on which at 
least four transaction reports were received for a given trade date). 
Also like the current Daily Reports, the proposed Report would be 
produced and made available electronically by approximately 7:00 a.m. 
on the business day following the trade date. Electronic Reports will 
be produced in the same three formats--printable, comma-delimited, and 
fixed record length--as the current Daily Reports.\3\ However, unlike 
the current Daily Reports, the proposed Daily Transaction Report has 
been designed to provide transaction detail on each reported trade in a 
frequently traded issue, rather than merely providing the daily high, 
low and average prices.\4\
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    \3\ The ``printable'' format can be printed with little or no 
change by an end-user. The ``comma-delimited'' and ``fixed record 
length'' files can easily be sorted or converted by an end-user's 
spreadsheet or other application program (e.g., Microsoft Excel).
    \4\ The Board also will continue to use all the transaction 
information reported by dealers to maintain a market surveillance 
database. The surveillance database is available to the Commission, 
the National Association of Securities Dealers (``NASD'') and the 
bank regulatory agencies responsible for the enforcement of Board 
rules.
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    The proposed Daily Transaction Report would be available by 
subscription. To obtain a subscription it will be necessary to sign a 
subscription agreement, however, there will be no fee charged for the 
new Daily Transaction Report.

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 an 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 section 
A,B, and C below, of the most significant aspects of such statements.

[[Page 60866]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    A long-standing goal of the Board is to provide market participants 
with information about the value of municipal securities.\5\ Over the 
past five years, with the advent of the Transaction Reporting Program, 
the Board has been working toward making transaction price information 
``transparent'' in the marketplace and seeking ways to make that 
information more comprehensive and contemporaneous.\6\ The new Daily 
Transaction Report represents the next step in that continuing process.
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    \5\ See e.g., ``From the Chairman,'' MSRB Reports, Vol. 8, No. 5 
(December 1998) at 2.
    \6\ See, e.g., ``Board to Proceed with the Pilot Program to 
Disseminate Inter-Dealer Transaction Information,'' MSRB Reports, 
Vol. 14, No. 1 (January 1994) at 13; Vol. 14, No. 5 (December 1994) 
as 3-6; and ``Transaction Reporting Program for Municipal 
Securities,'' MSRB Reports, Vol. 15, No. 1 (April 1995) at 11-15.
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    The Daily Transaction Report builds upon two earlier phases of 
transparency--the Board's Inter-Dealer Daily Report \7\ and the 
Combined Daily Report.\8\ Whereas the Inter-Dealer and Combined Daily 
Reports provide daily high, low and average prices for frequently 
traded issues of municipal securities, the proposed Daily Transaction 
Reports will provide individual information for each reported 
transaction in frequently traded issues. The Board believes that the 
individual transaction data on the new report, which will include par 
value and time of trade for each transaction as well as price, will 
provide a more complete picture of the market than the currently 
available Daily Reports.
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    \7\ See Securities Exchange Act Release No. 34955 (November 9, 
1994), 59 FR 59810 (November 18, 1994).
    \8\ See Securities Exchange Act Release No. 40337 (August 19, 
1998), 63 FR 45544 (August 26, 1998).
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    As with the Inter-Dealer and Combined Daily Reports, ``frequently 
traded'' issues will be defined as those issues trading at least four 
or more times on the business day for which the prices are reported, 
and the Daily Transaction Report will be made available on the morning 
of the next business day after trade date. As part of its effort to 
make more comprehensive data available, the Board intends to monitor 
the impact of the new report in the market. After the new report has 
been operational for a period of time, the Board will review its 
operation and will consider whether to lower the ``frequently traded'' 
threshold. Doing so would have the effect of listing more issues and 
more prices in each day's report and would make the report even more 
comprehensive in its representation of market activity.
    The Board also is reviewing various options for collecting and 
disseminating transaction information on a more contemporaneous basis. 
As part of this effort, the Board has created a web site that simulates 
the kind of information that a ``real-time'' system might provide and 
how it might be presented to investors.\9\ This demonstration system is 
available at the Board's web site at www.msrb.org. The Board welcomes 
comments from market participants on the demonstration system.
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    \9\ See File No. SR-MSRB-99-9 (September 7, 1999).
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    Background Information on Board Transparency Initiatives. The Board 
began disseminating price and volume information on municipal 
securities in 1995 after adopting an amendment to MSRB Rule G-14 that 
requires essentially all inter-dealer transactions to be reported to 
the Board via the automated comparison system operated by National 
Securities Clearing Corporation.\10\ This transaction reporting 
requirement dovetailed with existing automated clearance requirements 
in MSRB Rule G-12(f) and allowed dealers to begin transaction reporting 
with relatively few changes to their own trade processing systems.
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    \10\ See ``Reporting Inter-Dealer Transactions to the Board; 
Rule G-14, MSRB Reports, Vol. 14, No. 1 (January 1994), at 13.
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    Each business day since its inauguration in January 1995, the 
Inter-Dealer Daily Report has provided statistics on total inter-dealer 
market activity reported for the previous day and information about 
price and volume for each issue that was frequently traded on that day. 
The report includes the total par value traded in each frequently 
traded issue, and the high, low and average \11\ prices for the trading 
day.
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    \11\ Unlike the reported high and low prices, the average price 
in the Inter-Dealer Daily Report is computed including only those 
trades having a par value between $100,000 and $1 million. Since the 
prices of smaller, ``odd lot'' transactions and large position 
movements over $1,000,000 may be affected by the very size of the 
transaction, the Board decided to omit these transactions from the 
``average price'' computation.
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    The design of the Inter-Dealer Daily Report was based upon aspects 
of the municipal securities market that distinguish it from the 
exchange-listed and Nasdaq markets. A primary distinguishing 
characteristic of the municipal securities market is the large number 
of outstanding issues. There are approximately 1.3 million municipal 
securities that are distinct, non-fungible entities for purposes of 
trading and reporting, compared to a much smaller number of equity 
issues. The frequency of trading also differs substantially from 
patterns in the exchange and Nasdaq markets. While, on any given day, a 
certain number of municipal securities are traded frequently, the list 
of these frequently traded issues is continually changing over time. 
When frequent trading does occur in an issue, it generally occurs in 
connection with issuance and then subsides as ``buy and hold'' 
investors obtain the securities and offerings in the issue disappear 
completely.
    In designing the Inter-Dealer Daily Report, the Board adopted a 
threshold of four trades a day as the definition of ``frequently 
traded.'' Only on issues for which there are four or more transaction 
reports on a given day are prices given on the Daily Report. The Board 
constructed the Daily Report in this manner because of the concern that 
an isolated transaction may not necessarily provide a reliable 
indicator of ``market price'' and might be misleading to an observer 
not familiar with the market. At the same time, the Board made a 
commitment to review the use of the Inter-Dealer Daily Report as 
experience was obtained and eventually move to a more contemporaneous 
and comprehensive price transparency report.\12\
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    \12\ See, e.g., ``Board to Proceed with Pilot Program to 
Disseminate Inter-Dealer Transaction Information,'' MSRB Reports, 
Vol. 14, No. 1 (January 1994). In its approval order for the Inter-
Dealer Daily Report, the Commission noted that the Board, in 
proceeding to subsequent levels of transparency, ``should continue 
to work toward publicly disseminating the maximum level of useful 
information to the public while ensuring that the information and 
manner in which it is presented is not misleading.'' See Securities 
Exchange Act Release No. 34955 (November 9, 1994), 59 FR 59810 
(November 18, 1994).
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    In August 1998, after adopting amendments to MSRB Rule G-14 to 
require dealers to report their customer transactions to the Board each 
night, production of a Combined Daily Report began.\13\ This report 
incorporates both inter-dealer and customer transaction information. 
Like the Inter-Dealer Daily Report, the format of high, low and average 
prices was used and only issues that are reported as having traded four 
or more times on a given trade date are included. However, since both 
customer and inter-dealer transactions are taken into account, the 
number of issues meeting the ``frequently traded'' threshold each day 
went from approximately 200 appearing each day

[[Page 60867]]

on the Inter-Dealer Report to approximately 1,000 on the Combined Daily 
Report.\14\
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    \13\ See Securities Exchange Act Release No. 40337 (August 19, 
1998), 63 FR 45544 (August 26, 1998), ``Availability of Information 
on Transactions in Municipal Securities: Rule G-14,'' MSRB Reports, 
Vol. 19, No. 1 (February 1999) at 23.
    \14\ In determining whether a reported customer transaction will 
be included for purposes of any transparency report, reported 
transactions are checked for errors and certain transactions are 
eliminated from consideration if they contain what appear to be 
obvious errors (e.g., invalid or unknown CUSIP number, missing 
dollar price). The Board monitors the data it receives for errors 
and informs the dealer or its agent of each error that would 
eliminate a transaction from the Daily Report. The Board is working 
with dealers and enforcement agencies such as the NASD to improve 
the quality of reported data and to increase dealer compliance with 
Rule G-14 reporting requirements.
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    Description of Proposed Report. The proposed Daily Transaction 
Report will provide information on individual transactions in 
frequently traded municipal securities. It will display, for each 
transaction in such a security, the CUSIP number, a short description 
of the issue, the par value traded, the time of trade reported by the 
dealer, and the price of the transaction.\15\ Transactions will be 
categorized as one of three transaction ``types'': (i) sales by dealers 
to customers, (ii) purchases by dealers from customers, and (iii) 
inter-dealer trades. Reports will be organized by issue, with the most 
frequently traded issues listed first. Within an issue, trades will be 
listed in order of time of trade, from the earliest reported time of 
trade to the latest.\16\ Although the size of each day's report will 
depend on market activity, it is expected that the proposed Daily 
Transaction Report on average will provide information on approximately 
9,000 individual transactions in approximately 1,000 frequently-traded 
issues each day. Sample copies showing the appearance of the proposed 
Daily Transaction Report can be obtained at the Board's web site at 
www.msrb.org.
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    \15\ A dollar price is given for each transaction listed on the 
report. If the dealer submits a yield with the transaction report, 
the yield is included with the dollar price. There are instances, 
however, when a yield is not reported. For example, yields are not 
submitted by dealers for secondary market inter-dealer transactions 
because the automated comparison system used to report inter-dealer 
trades cannot accept yield information on those transactions. In 
addition, dealers cannot report a yield for customer transactions 
done on a dollar price basis that involve defaulted or variable rate 
securities. Transactions including either customers or dealers in 
new issues without a determined settlement date may be effected and 
reported by dealers either with a dollar price or a yield. The MSRB 
Transaction Reporting System will calculate a dollar price from 
yields submitted for these transactions, using an assumed settlement 
date if necessary. There must be, however, sufficient securities 
data available to make this calculation (e.g., coupon, dated date, 
maturity date, first interest payment date, etc.). For additional 
information, see ``Public Reporting of Transactions in Municipal 
Securities: Rule G-14,'' MSRB Reports, Vol. 18, No. 2 (August 1998) 
at 25-27.
    \16\ Where trades are submitted by dealers with an invalid time 
or no time of trade, the report shows the time of trade as ``0.''
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    Subscriptions to the Proposed Report. The proposed Daily 
Transaction Report will be available by subscription. To obtain a 
subscription, it will be necessary to sign a subscription agreement, 
but there will be no fee. In addition, recent Daily Transaction Reports 
will be available for examination, also free of charge, in the Board's 
Public Access Facility in Alexandria, Virginia. The Board expects to 
disseminate the Daily Transaction Report to subscribers mainly via the 
Internet.\17\ Details on how to subscribe, how to obtain a subscription 
agreement, and the method for accessing files via the Internet will be 
made available before operation begins.\18\ The Board expects that the 
proposed Service to provide the Daily Transaction Report will be made 
operational by December 1999.\19\
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    \17\ Current subscribers to the Inter-Dealer and Combined Daily 
Reports now download their files from the Board's electronic 
bulletin board system. The Board plans eventually to phase out the 
electronic bulletin board system and rely exclusively on the 
Internet delivery mechanism. However, the Board plans to continue to 
offer the existing Daily Reports and the proposed new Daily 
Transaction Report via the electronic bulletin board to current 
subscribers until sufficient time has been given for them to make 
the conversion to the internet delivery mechanism. Access to 
electronic copies of the new Daily Transaction Report will be made 
available each day at the same time to all subscribers regardless of 
whether the means of access of the specific subscriber is via the 
internet or the electronic bulletin board.
    \18\ The Board expects to use an internet-based File Transport 
Protocol (FTP) method to download files to subscribers. After 
signing and sending to the Board the subscription agreement, a 
subscriber will be assigned a log-in name and password for this 
purpose.
    \19\ Persons interested in being notified by e-mail of this and 
other Board announcements may obtain this service by visiting the 
Board's web site and clicking on ``Subscribe to E-mail.''
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2. Basis
    The Board believes the proposed rule change is consistent with 
Section 15B(b)(2)(C) \20\ of the Act, which provides that the Board's 
rules shall:
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    \20\ 15 U.S.C. 78o-4(b)(2)(C).

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 because it applies equally to all 
dealers in municipal securities.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    During 1999, the Board began to consider how to improve upon the 
Combined Daily Report and decided to release individual transaction 
data on frequently traded issues. On April 29, 1999, the Board made 
five sample Daily Transaction Reports available for public comment at 
its web site and in printed form at Board offices. As discussed below, 
the sample reports were formatted essentially the same as the proposed 
Daily Transaction Report now being filed with the Commission, except 
that transactions were divided into two, rather than three, ``types.''
    Responses to the request for comment on the sample Daily 
Transaction Reports were received from the following commentators.

Raymond James and Associates (``Raymond James'') \21\
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    \21\ Electronic mail from Mark Magee, Raymond James and 
Associates, to Bryan Johnson, MSRB, dated May 4, 1999.
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Mark A. Condic (``Condic'') (two letters) \22\
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    \22\ Letters from Mark A, Condic to the Municipal Securities 
Rulemaking Board dated June 15, 1999 (``June 15 letter'') and June 
22, 1999 (``June 22 letter'').
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A.G. Edwards & Sons, Inc. (``A.G. Edwards'') \23\
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    \23\ Letter from Clayton Erickson, A.G. Edwards and Sons, Inc., 
to Diane Klinke, MSRB, dated June 28, 1999.
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The Bond Market Association (``TBMA'') \24\
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    \24\ Letter from Sarah M. Starkweather, TBMA, to Diane Klinke, 
MSRB, dated July 6, 1999.
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Lebenthal & Co., Inc. (``Lebenthal'') \25\

    \25\ Letter from James A. Lebenthal, Lebenthal & Co., Inc., to 
Diane Klinke, MSRB, dated July 21, 1999.
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    General Comments. Four commentators (Raymond James, A.G. Edwards, 
TBMA, and Lebenthal) supported the proposed Daily Transaction Report 
and believe it will be useful to market participants.\26\ The fifth 
commentator (Condic) supported the new Report in his first letter to 
the

[[Page 60868]]

Board but expressed doubt about its usefulness in his second letter.
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    \26\ TBMA's support for this proposed rule change was further 
clarified in a telephone call between Harold Johnson, MSRB, and Paul 
Saltzman, TBMA, on October 5, 1999. Telephone call between Larry 
Lawrence, MSRB, and Kelly Riley, Division of Market Regulation, SEC, 
on October 7, 1999.
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    Further Enhancements to the Report. One commentator (Condic) 
suggests adding a summary table to the Report keyed to bond ratings, 
which would show yields and the changes in yield that occur each day. 
The Board determined not to add such a summary table. Ratings of 
municipal securities assigned by private bond rating organizations are 
not currently part of dealer reports to the Board. The Board recognizes 
that various types of end-users of transaction data may need 
enhancements and additions to the data a (calculated yields, ratings, 
extended securities descriptions, etc.) and different means to access 
and use the data (such as automated search mechanisms and historical 
records). The Board's long-standing position has been that its primary 
role is to make available the basic transaction information that is 
reported to it by dealers. AT the same time, the Board has encouraged 
other organizations to re-disseminate the data, and to ``add value'' to 
the data to target the needs of specific end users.\27\
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    \27\ See, e.g., ``Board to Proceed with Pilot Program to 
Disseminate Inter-Dealer Transaction Information,'' MSRB Reports, 
Vol. 14, No. 1 (January 1994) at 14.
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    With respect to bond ratings, the Board notes that TBMA currently 
makes a web site available that includes data from existing Daily 
Reports and that this site includes ratings as well as search features 
and other enhancements designed to make the information particularly 
useful to investors. The Board also notes that TBMA, in its comment 
letter on the proposed report indicates that it will continue to 
provide this kind of service, using the data that will be included in 
the proposed Daily Transaction Report. The Board believes that 
organizations such as TBMA are well positioned to meet specific end-
user needs and that the Board's role should continue to be as provider 
of basic transaction data unless it becomes clear that a critical need 
for enhanced information in the market is not being met.
    Adding Yield-To-Call Information. One commentator (A.G. Edwards) 
suggests that where the displayed yield on the Daily Transaction Report 
is a ``yield to call,'' the transaction record should include the date 
and price of the call feature used for the price-yield calculation. The 
proposed Daily Transaction Report shows a yield for a transaction only 
if the dealer reported a yield. When reporting yields to the Board, 
dealers do not report the call features used for yield calculation, so 
the information requested by the commentator is not available for 
inclusion on the Daily Transaction Report. While it would be possible 
for the Board to calculate yields from dollar prices for most 
transactions, and to show whether the yield was calculated to a call 
date and call price or to maturity, the Board has chosen not to add 
this enhancement to the report. In this regard, the Board notes that 
TBMA's web site currently does include calculated yields for the dollar 
prices shown.
    Distinguising Inter-Dealer Transactions from Purchases from 
Customers. In the format released for comment, the Daily Transaction 
Report identified a transaction as one of two types: (1) a sale to a 
customer, or (ii) ``other,'' (i.e., a purchase by a dealer). Purchases 
by dealers either are purchases from customers or purchases on the 
inter-market, but these two types of dealer purchases were not 
separately identified in the initial draft version of the Daily 
Transaction Report. One commentator (A.G. Edwards) suggests that the 
Daily Transaction Report should segregate the two types of purchases by 
dealers, nothing that it may be relevant to some market analyses 
whether securities were bought on the inter-dealer market or bought 
from a customer. Another commentator (Lebenthal) also believes the 
Report should present inter-dealer prices and retail customer prices 
separately, in order to avoid misleading customers.
    The Board agrees that it would be useful to distinguish between 
dealers' purchases from customers and from other dealers. Thus, in the 
proposed report, there are separate columns showing the prices for: (i) 
sales to customers, (ii) purchases from customers, and (iii) inter-
dealer transactions.
    Addition of Dealer Identification to the Daily Transaction Report. 
One commentator (Condic) states that, since the proposed report shows 
the prices of actively traced municipal securities, it should also show 
the name and telephone number or any dealer selling the securities. The 
Board notes that the existence of transaction information reported by a 
dealer does not indicate whether the dealer has additional securities 
of that issue to sell. The Board believes that this kind of proposal 
would be more appropriate to a quotation system rather than a 
transaction transparency system and therefore has declined to adopt 
this suggestion.
    Voiding Customer Transactions Where Spread is Over 25 Basis Points. 
One commentator (Condic) suggests that the Board adopt a rule that a 
transaction is voidable by a customer if the ``spread'' is more than 25 
basis points. This view may be based upon the concern that a customer 
may buy a security from a dealer and on the next day find that the 
transaction was not effected at a fair market price.
    Board Rule G-30 already addresses the issue of mis-priced 
securities transactions with customers. The rule states that prices to 
customers must be fair and reasonable, taking into account all relevant 
factors about the transaction. The Board historically has allowed the 
enforcement agencies charged with enforcing Board rules make 
determinations on whether particular transaction price is fair and 
reasonable because the enforcement agency is in the best position to 
determine the facts and circumstances of individual transactions. The 
Board notes that the surveillance data from the Transaction Reporting 
Program now provides to the enforcement agencies comprehensive, 
searchable information on transactions and transaction prices occurring 
in the market. This should enhance the ability of the enforcement 
agencies to enforce MSRB Rule G-30. Consequently, the Board is not 
undertaking further rulemaking with respect to the commentator's 
suggestion.
    Continued Production of Combined Daily Report. In its comment 
letter, TBMA requests that the Board continue to produce the Combined 
Daily Report because that report's summary information could serve as 
the ``gateway'' to the detailed information of the Daily Transaction 
Report. TBMA notes that, if the Board does not continue production of 
the Combined Daily Report, the TBMA might create a similar summary 
report for its web site. This would be possible since the Daily 
Transaction Report includes all of the information necessary to produce 
a Combined Daily Report.
    The Board intends to continue, at least initially, production of 
both the Combined Daily Report and the Inter-Dealer Daily Report after 
the new report goes into operation. However, the number of 
subscriptions to these older Daily Reports may diminish in the future 
as subscribers to the existing reports program their systems to use the 
more detailed information in the new report. After some time, if 
subscribership to the older Daily Reports diminishes markedly, the 
Board may file a proposed rule change with the Commission to 
discontinue production of the older Reports.
    Fees for new Daily Transaction Report. The Inter-Dealer and 
Combined Daily Reports are each available by

[[Page 60869]]

subscription for $15,000 annually. One commentator (Condic) states that 
the proposed Daily Transaction Report should be made available free of 
charge. Another commentator (TBMA) urges the Board to make transaction 
information available, electronically and without charge, to dealers 
for their internal use in market analysis and in their compliance 
efforts. As noted above, the Board has decided to make subscriptions to 
the proposed report free. Subscribers, however, will need to sign a 
subscription agreement that outlines the Board's disclaimer of 
liability, the proprietary nature of and usage restrictions on the 
CUSIP numbers and CUSIP descriptions contained in the report, and 
certain other matters.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the MSRB consents, the Commission will:
    (A) by order approve such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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-
0609. 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 office. 
All submissions should refer to File No. SR-MSRB-99-8 and should be 
submitted by November 29, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\28\
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    \28\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-29156 Filed 11-5-99; 8:45 am]
BILLING CODE 8010-01-M