[Federal Register Volume 65, Number 110 (Wednesday, June 7, 2000)]
[Notices]
[Pages 36189-36191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14248]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42830; File No. SR-MSRB-00-7]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Municipal Securities 
Rulemaking Board Consisting of Technical Amendments to Rules A-3, G-15, 
G-17, and G-18

May 25, 2000.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\

[[Page 36190]]

notice is hereby given that on May 2, 2000, the Municipal Securities 
Rulemaking Board (``Board'' or ``MSRB'') filed with the Securities and 
Exchange Commission (``SEC'' or ``Commission'') the proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by the MSRB. The Board has designated the proposed rule 
change as constituting a ``non-controversial'' rule change under 
paragraph (f)(6) of rule 19b-4 under the Act,\3\ which renders the 
proposal effective upon receipt of this filing by the Commission.\4\ 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFT 240.19b-4(f)(6).
    \4\ Pursuant to Rule 19b-4(f)(6), the Board provided the 
required five-day advance notice to the Commission of its intent to 
file the proposed rule change. In the notice, the Board represented 
that the proposed rule change: (1) Will not significantly affect the 
protection of investors; (2) will not impose any significant burden 
on competition; and (3) will not become operative for thirty days 
after the date of this filing. See letter from Ernesto A. Lanza, 
Associate General Counsel, MSRB, to Katherine A. England, Assistant 
Director, Division of Market Regulation, Commission, dated April 25, 
2000.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Board has filed with the Commission a proposed rule change 
consisting of technical amendments to Rule A-3, on Board membership; 
Rule G-15, on confirmation, clearance and settlement of customer 
transactions with customers; rule G-17, on conduct of municipal 
securities business; and Rule G-18, on execution of transactions. The 
proposed rule change would become operative on June 1, 2000.

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 MSRB 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 
text 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 proposes to adopt technical amendments to Rules A-3, G-
15, G-17, and G-18 for the purpose of making certain non-substantive 
changes. The proposed amendments to subsections (a)(i), (c)(ii) and 
(c)(iv) of Rule A-3 correct an unintended omission from the technical 
amendments (the ``1999 Technical Amendments''),\5\ filed with and 
approved by the Commission last year, with respect to the definition of 
public representatives on the Board and its Nominating Committee. The 
proposed rule change is intended to make the rule language consistent 
with Section 15B(b)(1) of the Act.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 41528 (June 15, 
1999), 64 FR 33334 (June 22, 1999).
    \6\ 15 U.S.C. 78o-4(b)(1).
---------------------------------------------------------------------------

    The proposed changes to Rule G-15(d)(ii) make subsection and 
paragraph references consistent with the Board's general usage of such 
references throughout the rules.
    The proposed amendments to Rule G-17 change certain terminology 
used in the rule from ``municipal securities business'' to ``municipal 
securities activities'' to avoid any ambiguity with the term 
``municipal securities business'' as used in Rules G-37 and G-38. The 
Board represents that the term ``municipal securities business'' as 
used in Rules G-37 and G-38 has a specific limited definition, whereas 
Rule G-17 uses that term in a manner intended to include all of the 
municipal securities activities of the dealer or its associated 
persons.\7\
---------------------------------------------------------------------------

    \7\ The proposed changes to Rule G-17 are consistent with 
similar amendments made to Rules A-14, A-15, G-3 and G-27 in the 
1999 Technical Amendments.
---------------------------------------------------------------------------

    The proposed amendment to Rule G-18 would delete a definition of 
``broker's broker'' that pre-dated the Commission's definition of that 
term under Rule 15c3-1(a)(8)(ii) of the Act.\8\ Because the language 
used to define brokers' broker differs in the two definitions, the 
Board believes that it is possible that some ambiguity may exist as to 
whether the term is intended to cover the same universe of dealers 
under the general federal securities laws and Board rules. The Board 
represents that the deletion of this definition from Rule G-18 would 
eliminate this potential ambiguity.\9\
---------------------------------------------------------------------------

    \8\ 17 CFR 240.15c3-1(a)(8)(ii).
    \9\ Rule D-1 provides that, unless the context otherwise 
specifically requires, the terms used in Board rules shall have the 
respective meanings set forth in the Act and the rules and 
regulations of the Commission thereunder. Thus, the deletion of the 
definition of brokers' broker from Rule G-18 would automatically 
result in this term having the same meaning as set forth under Rule 
15c3-1(a)(8)(ii) of the Act.
---------------------------------------------------------------------------

2. Statutory Basis
    The Board believes that the proposed rule is consistent with 
Section 15B(b)(2)(C) of the Act.\10\ The Board further believes that 
the proposed rule change will ensure that existing rule provisions are 
accurate and understandable.
---------------------------------------------------------------------------

    \10\ Section 15B(b)(2)(C) of the Act states in pertinent part 
that the rules of the Board ``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.'' 15 U.S.C. 78o-4(b)(2)(C).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Board represents that the proposed rule change will not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, because it would apply equally 
to all brokers, dealers and municipal securities dealers.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

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 
business days prior to the filing date; and (iv) does not become 
operative for 30 days after the date of its filing, the Board has 
submitted this proposed rule change, pursuant to Section 19(b)(3)(A) 
\11\ of the Act and Rule 19b-4(f)(6) \12\ thereunder, to become 
operative on June 1, 2000. 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

[[Page 36191]]

necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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, NW., Washington, DC 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 at the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
MSRB. All submissions should refer to File No. SR-MSRB-00-7 and should 
be submitted by June 28, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-14248 Filed 6-6-00; 8:45 am]
BILLING CODE 8010-01-M