[Federal Register Volume 65, Number 151 (Friday, August 4, 2000)]
[Notices]
[Pages 48036-48037]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19771]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43090; File No. SR-MSRB-00-9]


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 G-8 and G-
15

July 31, 2000.
    On July 14, 2000, the Municipal Securities Rulemaking Board 
(``Board'' or ``MSRB'') filed with the Securities and Exchange 
Commission (``Commission'') a proposed rule change pursuant to Section 
19(b)(1) of the Securities Exchange Act of 1934 (``Exchange Act'') \1\ 
and Rule 19b-4 thereunder.\2\ 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. 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 has filed with the Commission a proposed rule change 
consisting of technical amendments to MSRB Rules G-8, on books and 
records to be made by brokers, dealers and municipal securities 
dealers, and G-15, on confirmation, clearance and settlement of 
transactions with customers. The proposed rule change will become 
operative on September 19, 2000. The text of the proposed rule change 
is set forth below. Additions are italicized; deletions are 
[bracketed].

Rule G-8. Books and Records to be Made by Brokers, Dealers and 
Municipal Securities Dealers

    (a)-(e) No change.
    (f) Compliance with Rule 17a-3. Brokers, dealers and municipal 
securities dealers other than bank dealers which are in compliance 
with rule 17a-3 of the Commission will be deemed to be in compliance 
with the requirements of this rule, provided that the information 
required by subparagraph (a)(iv)(D) of this rule as it relates to 
uncompleted transactions involving customers; paragraph (a)(viii); 
and paragraphs (a)(xi) [; paragraph (a)(xii), paragraph (a)(xiii); 
paragraph (a)(xiv); paragraph (a)(xv); paragraph (a)(xvi); paragraph 
(a)(xvii); paragraph (a)(xviii); and paragraph (a)(xix)] through 
(a)(xx) shall in any event be maintained.

Rule G-15. Confirmation, Clearance and Settlement of Transactions with 
Customers

    (a)-(c) No change.
    (d) Delivery/Receipt vs. Payment Transactions.
    (i) No change.
    (ii) Requirement for Confirmation/Acknowledgment.
    (A) No change.
    (B) Definitions for Rule G-15(d)(ii).
    (1) No change.
    (2) ``Qualified Vendor'' shall mean a vendor of electronic 
confirmation and acknowledgement services that:
    (a)-(c) No change.
    (d) Notifies the Commission staff immediately in writing of any 
material change to its confirmation/affirmation systems. (For 
purposes of this subparagraph (d)[(D)] ``material change'' means any 
changes to the vendor's systems that significantly affect or have 
the potential to significantly affect its electronic trade 
confirmation/acknowledgment systems, including: (i) Affect or 
potentially affect the capacity or security of its electronic trade 
confirmation/acknowledgement system; (ii) rely on new or 
substantially different technology; (iii) provide a new service as 
part of the Qualified Vendor's electronic trade confirmation/
acknowledgment system; or (iv) affect or have the potential to 
adversely affect the vendor's confirmation/acknowledgment system's 
interface with a Clearing Agency.);
    (e)-(g) No change.
    (3) No change.
    (C) No change.
    (iii) No change.
    (e) No change.

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 
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, 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Board is proposing technical amendments to MSRB Rules G-8 and 
G-15 for the purpose of making the following non-substantive changes:
    First, on March 16, 2000, the Commission approved amendments to 
MSRB Rule G-8, on books and records, MSRB Rule G-27, on supervision, 
and MSRB Rule G-9, on preservation of records (the ``Supervision 
Amendments''), relating to supervisory procedures for reviewing

[[Page 48037]]

correspondence with the public.\3\ The Supervision Amendments become 
effective on September 19, 2000. Among other things, they provide for 
maintaining records of written supervisory procedures and 
correspondence relating to a municipal securities representative's 
municipal securities activities.
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    \3\ See Securities Exchange Act Release. No. 42538, 65 FR 15675 
(March 23, 2000).
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    Under current MSRB Rule G-8(f), a non-bank dealer is deemed to be 
in compliance with its recordkeeping obligations under MSRB Rule G-8 if 
it is in compliance with the SEC's recordkeeping rule,\4\ provided that 
the dealer must still maintain certain types of records identified in 
MSRB Rule G-8 that are specifically required under Board rules and are 
unique to the municipal securities market. The technical amendment to 
MSRB Rule G-8(f) set forth in this filing requires a non-bank dealer 
relying on Exchange Act Rule 17a-3 for the maintenance of its books and 
records to nonetheless maintain the records of supervisory procedures 
and correspondence required by the recent amendments.
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    \4\ Exchange Act Rule 17a-3, 17 CFR 240.17a-3.
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    Second, the amendment proposed to MSRB Rule G-15(d)(ii)(B)(2)(d) 
makes a paragraph reference consistent with the Board's general usage 
of such references throughout the rules.
2. Basis
    The Board believes the proposed rule change is consistent with 
15B(b)(3)(C) \5\ of the Exchange Act, which requires, in pertinent 
part, that the Board's rules:
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    \5\ 15 U.S.C. 780-4(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 
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the public interest.

    The Board believes that the proposed rule change is consistent with 
the Exchange Act because it ensures that existing rule provisions are 
accurate, understandable and consistent.

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 Exchange Act because it would apply 
equally to all brokers, dealers and municipal securities dealers.

C. Self-Regulatory Organization's Statement of 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 
business days prior to the filing date; and (iv) does not become 
operative until September 19, 2000,\6\ which is more than thirty days 
after the date of its filing, the Board has submitted this proposed 
rule change to become effective pursuant to Section 19(b)(3)(A) \7\ of 
the Exchange Act and Rule 19b-4(e)(6) \8\ thereunder. In particular, 
the Board believes the proposed rule change qualifies as a ``non-
controversial filing'' because the proposed rule change does not 
significantly affect the protection of investors or the public interest 
and does not impose any significant burden on competition.
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    \6\ This date coincides with the effective date of the 
Supervision Amendments.
    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(e)(6).
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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 offices. 
All submissions should refer to File No. SR-MSRB-00-9 and should be 
submitted by August 25, 2000.

    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. 00-19771 Filed 8-3-00; 8:45 am]
BILLING CODE 8010-01-M