[Federal Register Volume 67, Number 114 (Thursday, June 13, 2002)]
[Notices]
[Pages 40762-40763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14947]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46043; File No. SR-MSRB-2002-05]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Granting Approval to the Proposed Rule Change Relating to 
Electronic Mail Contacts

June 6, 2002.
    On April 30, 2002, pursuant to section 19(b)(1) of the Securities 
Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ 
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 relating to electronic mail contacts.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The Commission published the proposed rule change for comment in 
the Federal Register on May 6, 2002.\3\ The Commission did not receive 
comment letters relating to the forgoing proposed rule change. This 
order approves the Board's proposal.
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    \3\ See Release No. 34-45881 (May 14, 2002), 67 FR 34507.
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I. Description of the Proposed Rule Change

    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. The Board's 
establishment of a reliable method for electronic communication will 
allow it to efficiently alert dealers to official communications, 
including time-sensitive developments, rule changes, notices, etc., and 
will facilitate dealers' internal distribution of such information. To 
ensure that all MSRB communications continue to reach each broker, 
dealer and municipal securities dealer, the MSRB proposed the creation 
of Rule G-40, on Electronic Mail Contacts, and amendments to Rule G-8, 
on Books and Records to be Made by Brokers, Dealers and Municipal 
Securities Dealers, and Rule G-9, on Preservation of Records.
    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,\4\ submit by 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.\5\ 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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    \4\ 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.
    \5\ 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.

II. Summary of Comments

    The Commission did not receive comment letters relating to this 
proposal.

III. Discussion

    The Commission must approve a proposed MSRB rule change if the 
Commission finds that the proposal is consistent with the requirements 
set forth under the Exchange Act and the rules and regulations 
thereunder, which govern the MSRB.\6\ The language of section 
15B(b)(2)(C) of the Exchange Act requires that the MSRB's rules be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principals 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,

[[Page 40763]]

to protect investors and the public interest.\7\
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    \6\ Additionally, in approving this rule, 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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    After careful review, the Commission finds that the Board's 
proposed rule change consisting of the creation of Rule G-40, on 
Electronic Mail Contacts, and amendments to Rule G-8, on Books and 
Records to be Made by Brokers, Dealers and Municipal Securities 
Dealers, and Rule G-9, on Preservation of Records, meets the requisite 
statutory standard. The Commission believes that this proposed rule 
change is consistent with the requirements of the Act, and the rules 
and regulations thereunder. In addition, the Commission finds that the 
proposed rule is consistent with the requirements of section 
15B(b)(2)(C) of the Act, as set forth above.

IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\8\ that the proposed rule change (File No. MSRB-2002-05) be and 
hereby is, approved.
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    \8\ 15 U.S.C. 78o-4(b)(2)(C).

    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. 02-14947 Filed 6-12-02; 8:45 am]
BILLING CODE 8010-01-P