[Federal Register Volume 66, Number 195 (Tuesday, October 9, 2001)]
[Notices]
[Page 51485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25238]



[[Page 51485]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44894; File No. SR-MSRB-2001-06)


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

October 2, 2001.
    On August 17, 2001, the Municipal Securities Rulemaking Board 
(``MSRB'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder, \2\ a 
proposed rule change to establish an informational service relating to 
the reports of sales and purchases provided by Rule G-14. The proposed 
rule change will create a Daily Comprehensive Report from transaction 
information supplied under Rule G-14.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The proposed rule change was published for the comment in the 
Federal Register on August 31, 2001.\3\ The Commission received no 
comments on the proposal. This order approves the proposal.
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    \3\ See Release No. 34-44735 (August 22, 2001), 66 FR 46045.
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    In its current form, Rule G-14 requires dealers to report 
essentially all inter-dealer and customer transactions in municipal 
securities to the MSRB by midnight of the trade date. In May 2001, the 
MSRB announced its plan to begin reporting trades in ``real time'' by 
mid-2003.\4\ The dissemination of a Daily Comprehensive Report is the 
MSRB's next step towards an increase in market transparency.
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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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    The MSRB's proposed Daily Comprehensive Report is comprised of the 
information reported by brokers, dealers and municipal securities 
dealers, which provides a detailed report of municipal securities 
transactions effected during a single day. The trade data supplied in 
the proposed Daily Comprehensive Report shall be similar to that 
currently supplied in the monthly Comprehensive Transaction Report 
except that the information is to be available daily. For each trade, 
the proposed Daily Comprehensive Report will 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, if any, the dealer-reported yield of the 
transaction. Each transaction shall be categorized as: a sale by a 
dealer to a customer, a purchase from a customer, or an inter-dealer 
trade. Each day's report shall include the transactions effected two 
weeks previously. The proposed Daily Comprehensive Report is to be 
available through a subscription service with electronic delivery by 
File Transfer Protocol (FTP) via the Internet.
    The MSRB shall establish an annual subscription fee for access to 
the Daily Comprehensive Report in the amount of $2,000. The proposed 
annual fee is structured approximately to defray the Board's costs for 
production of daily data sets, operation of telecommunication lines, 
and subscription maintenance.\5\ Prior to formalizing a subscription, 
MSRB shall make a single day's transactional data available to 
prospective users without charge, so that they may determine whether 
they wish to subscribe.
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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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    The Commission believes the proposed rule change to Rule G-14 is 
consistent with the protection of investors and the public interest on 
account that it facilitates the MSRB's long-standing policy to increase 
price transparency in the municipal securities market. Both MSRB and 
the Commission believe the proposed Daily Comprehensive Report provides 
a mechanism to disseminate comprehensive and contemporaneous pricing 
data with the intent to promote just and equitable principles of trade 
and foster an open market in municipal securities. Additionally, the 
Commission believes that the proposed rule change will not impose any 
burden on competition, since it equally applies to all brokers, dealers 
and municipal securities dealers.
    The Commission must approve a proposed MSRB rule change if the 
Commission finds that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
govern the MSRB.\6\ The Commission finds that the proposed rule change 
meets this standard. In particular, the Commission finds that the 
proposed rule is consistent with the requirements of Section 
15B(b)(2)(C) of the Act,\7\ which requires, that the MSRB's rules 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, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national system, and, in general, to protect 
investors and the public interest.
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    \6\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78o-4(b)(2)(C).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (File No. MSRB-2001-06) be, and 
hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    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. 01-25238 Filed 10-5-01; 8:45 am]
BILLING CODE 8010-01-M