[Federal Register Volume 66, Number 170 (Friday, August 31, 2001)]
[Notices]
[Pages 46045-46047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-22016]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44735; File No. SR-MSRB-2001-06]


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

August 22, 2001.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 46046]]

(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on August 17, 2001, 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-2001-06). 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 MSRB has filed with the SEC a proposed rule change to institute 
an informational service (the ``Service'') that would provide a Daily 
Comprehensive Report. The transaction information on the Daily 
Comprehensive Report would come from reports made to the Board by 
brokers, dealers and municipal securities dealers (``dealers'') under 
its rule G-14, which governs reports of sales or purchases. This rule 
currently requires dealers to report essentially all inter-dealer and 
customer transactions in municipal securities to the Board by midnight 
of trade date.
    The proposed Daily Comprehensive Report (``Report'') would provide 
the details of municipal securities transactions effected during a 
single day. Each day's report would include the transactions effected 
two weeks previously. The proposed Report would be available by a 
subscription service. On each business day, the Report would be 
available electronically to subscribers by File Transfer Protocol (FTP) 
via the Internet. The subscription fee would be $2,000 per year.

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 Section 
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 has a long-standing policy to increase price transparency 
in the municipal securities market, with the ultimate goal of 
disseminating comprehensive and contemporaneous pricing data. Since 
1995, the Board has expanded the scope of the public transparency 
reports in several steps. Each step has provided industry participants 
and the public successfully more information about the market.\3\
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    \3\ The MSRB's Report summarizing prices for issues that are 
frequently traded on the inter-dealer market began operation in 
1995; in 1998, dealer-customer prices were added in a second summary 
report; in January 2000, a report with details of trades in 
frequently traded issues was added; and in October 2000, a 
comprehensive report, covering all transactions effected during the 
previous month, began operation. See Securities Exchange Act Release 
No. 43426 (October 10, 2000), 65 FR 61367 (October 27, 2000).
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    In May, 2001, the Board announced its plan to begin reporting 
trades in ``real time'' by mid-2003.\4\ The implementation of real-time 
trade reporting is being coordinated with the industry's schedule for 
migration to an environment of same-day settlement of securities 
transactions. To attain real-time reporting the Board intends in the 
future to file an amendment to rule G-14 to require dealers to report 
their trades within 15 minutes of the time they are effected.
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    \4\ See ``Real-Time Reporting of Municipal Securities 
Transactions,'' MSRB Reports, Vol. 21, No. 2 (July 2001) at 31-36.
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    As its next step to increase transparency, the Board is now 
proposing to disseminate a Daily Comprehensive Report. The proposed 
Report, to be made available each day, would contain details of all 
municipal securities transactions that were effected during the day two 
weeks earlier. Data about each trade on the proposed Report would be 
similar to that on the current monthly Comprehensive Transaction 
Report. For each trade, the proposed Report would show the trade date, 
the CUSIP number of the issue traded, a short issue description, the 
par value traded, the time of trade reported by the dealer, the price 
of the transaction, and the dealer-reported yield of the transaction, 
if any. Each transaction would be categorized as: a sale by a dealer to 
a customer, a purchase from a customer, or an inter-dealer trade.

Description of Proposed Service

    The proposed Service would make the Daily Comprehensive Report 
available each day to subscribers. Subscribers would access the Report 
via the Internet and would download copies from the Board's computer 
using a password-protected FTP account. The Board plans to make a 
single day's data available to prospective users without charge, so 
that they may determine whether they wish to subscribe.
    The Board is establishing a fee for an annual subscription to the 
Service of $2,000. The proposed annual fee is structured approximately 
to defray the Board's costs for production of daily data sets, 
operation of telecommunications lines, and subscription maintenance.\5\
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    \5\ The subscription fee for the current monthly report is also 
$2,000 annually. Subscribers to the monthly report who prefer the 
fresher data of the proposed Daily Comprehensive Report will have 
the option to switch subscriptions to the latter.
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2. Basis
    The Board believes the proposed rule change is consistent with 
section 15B(b)(2)(C) of the Act, which provides that the Board's rules 
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. * * *

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

    The MSRB 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 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

    Written comments were neither solicited nor received.

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:

[[Page 46047]]

    (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 
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. 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 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-2001-06 and should be 
submitted by September 21, 2001.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-22016 Filed 8-30-01; 8:45 am]
BILLING CODE 8010-01-M