[Federal Register Volume 67, Number 93 (Tuesday, May 14, 2002)]
[Notices]
[Pages 34507-34508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11951]



[[Page 34507]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45881; File No. SR-MSRB-2002-05]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Municipal Securities Rulemaking Board Relating to 
Electronic Mail Contacts

May 6, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ notice is hereby given that on April 30, 2002, 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-2002-05). 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).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Board is filing herewith a proposed rule change relating to 
electronic mail representatives. Below is the text of the proposed rule 
change. Proposed new language is italicized; proposed deletions are in 
brackets.

Rule G-40. Electronic Mail Contacts

    (a) Each broker, dealer or municipal securities dealer shall 
appoint an Electronic Mail Contact to serve as the official contact 
person for purposes of electronic mail communication between the 
broker, dealer or municipal securities dealer and the MSRB. Each 
Electronic Mail Contact shall be a registered municipal securities 
principal of the broker, dealer or municipal securities dealer.
    (b)(i) Upon completion of its Rule A-12 submissions and assignment 
of an MSRB Registration Number, each broker, dealer or municipal 
securities dealer shall submit to the MSRB by mail a completed Form G-
40 setting forth, in the prescribed format, the following information:
    (A) The name of the broker, dealer or municipal securities dealer, 
and the date.
    (B) The MSRB Registration Number of the broker, dealer or municipal 
securities dealer.
    (C) The name of the Electronic Mail Contact, and his/her electronic 
mail address, telephone number and Individual Central Registration 
Depository (CRD) Number.
    (A) The name, title, signature and telephone number of the person 
who prepared the form.
    (ii) A broker, dealer or municipal securities dealer may change the 
name of its Electronic Mail Contact or other information previously 
provided by electronically submitting to the MSRB an amended Form G-40.
    (c) Each broker, dealer or municipal securities dealer shall update 
information on its Electronic Mail Contact periodically as requested 
and prescribed by the MSRB and shall submit such information 
electronically to the MSRB.

Rule G-8. Books and Records To Be Made by Brokers, Dealers and 
Municipal Securities Dealers

    (a) Description of Books and Records to be Made. Except as 
otherwise specifically indicated in this rule, every broker, dealer and 
municipal securities dealer shall make and keep current the following 
books and records, to the extent applicable to the business of such 
broker, dealer or municipal securities dealer:
    (i)-(xxi) No change.
    (xxii) Records Concerning Electronic Mail Contacts. Records 
reflecting copies of Form G-40 and any amended forms, as required by 
Rule G-40.
    (b)-(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 the 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)(ix) through (a)[(xxi)] (xxii) shall in any event be maintained.
    (g) No change.

Rule G-9. Preservation of Records

    (a) No change.
    (b) Records to be Preserved for Three Years. Every broker, dealer 
and municipal securities dealer shall preserve the following records 
for a period of not less that three years:
    (i)-(xiii) No change.
    (xiv) the records to be maintained pursuant to rule G-8(a)(xx); 
[and]
    (xv) the records to be maintained pursuant to rule G-8(a)(xxi)[.] 
;and
    (xvi) the records to be maintained pursuant to rule G-8(a)(xxii).
    (c)-(g) No change.
* * * * *

II. Self-Regulatory Organization's Statement of the Terms of 
Substance of 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 
texts of these statements may be examined at the places specified in 
Item IV below. The MSRB 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

    (a) The events of September 11th, as well as the weeks that 
followed, emphasized the importance of, and need for, a formalized 
business continuity plan that includes an efficient and reliable means 
of official communication between regulators and the industry. 
Establishing a reliable method for electronic communication is needed 
to allow the MSRB to efficiently alert dealers to official 
communications, including time-sensitive developments, rule changes, 
notices, etc., and will facilitate dealers' internal distribution of 
such information. In addition, the MSRB has discontinued publication of 
MSRB Reports. MSRB notices now will be available exclusively on its Web 
site at www.msrb.org. To ensure that such notices and other MSRB 
communications continue to reach each broker, dealer and municipal 
securities dealer, the MSRB has adopted the proposed rule change to add 
new Rule G-40, on electronic mail contacts.
    Paragraph (a) of Rule G-40 requires that each dealer appoint an 
``Electronic Mail Contact'' to serve as its official contact person for 
purposes of communicating with the MSRB, and that such person be a 
registered municipal securities principal of the dealer. Paragraph (b) 
requires that each dealer, upon completion of its Rule A-12 submissions 
and assignment of an MSRB Registration Number,\2\ submit by

[[Page 34508]]

mail to the MSRB a completed Form G-40 setting forth the dealer's name, 
date, MSRB Registration Number, name of its E-mail Contact and his/her 
e-mail address, telephone number and Individual Central Registration 
Depository (CRD) Number, and the name, title, signature and telephone 
number of the person who prepared the Form G-40.\3\ Paragraph (b) also 
provides that the dealer may change its E-mail Contact or other 
information previously submitted by sending an amended Form G-40 to the 
MSRB by e-mail. Paragraph (c) requires each dealer to update 
information on its E-mail Contact as periodically requested and 
prescribed by the MSRB and to submit such information to the MSRB by e-
mail.
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    \2\ Rule A-12, on initial fee, requires each dealer, prior to 
effecting any transaction in or inducing or attempting to induce the 
purchase or sale of any municipal security, to pay to the MSRB an 
initial fee of $100, accompanied by a written statement setting 
forth the dealer's name, address and SEC registration number.
    Upon Commission approval of the proposed rule change, the MSRB 
will contact its current list of dealers (since these dealers will 
have previously satisfied their Rule A-12 submissions) to obtain 
completed Forms G-40. Thereafter, any new dealer will be required to 
send its initial Form G-40 by mail when the dealer completes its 
Rule A-12 submissions, as noted above.
    \3\ The MSRB will assign passwords in order to limit access to 
each dealer's Form G-40 and to maintain the integrity of the 
information contained therein. Therefore, each dealer will be 
required to submit its initial Form G-40 by mail. The MSRB will then 
issue a password to the designated E-mail Contact that will be used 
to electronically submit to the MSRB any required updates and 
amendments to the form.
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    The proposed rule change also amends Rule G-8, on books and 
records, to require that dealers maintain records reflecting copies of 
Form G-40 and any amended forms, as required by Rule G-40. The proposed 
rule change amends Rule G-9, on preservation of records, to require 
that dealers retain these records for a period of three years.
    (b) The MSRB has adopted the proposed rule change pursuant to 
Section 15B(b)(2)(I) of the Exchange Act, which authorizes the MSRB to 
adopt rules that provide for the operation and administration of the 
MSRB.

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 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

    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 self-regulatory organization consents, the Commission will:
    (A) By order approve the 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 20549-0609. 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 offices. All submissions should 
refer to File No. SR-MSRB-2002-05 and should be submitted by June 4, 
2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-11951 Filed 5-13-02; 8:45 am]
BILLING CODE 8010-01-P