[Federal Register Volume 67, Number 137 (Wednesday, July 17, 2002)]
[Notices]
[Pages 47012-47013]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17972]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46180; File No. SR-MSRB-2002-07]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Municipal Securities Rulemaking Board Relating to Rule G-
14, on Reports of Sales or Purchases

July 10, 2002.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``the Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 3, 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-2002-07) as described in Items I, II, and III below, which 
Items have been prepared by the MSRB. 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 Commission a proposed rule change with 
regard to Rule G-14, on reports of sales or purchases, to increase 
transparency in the municipal securities market. The proposed rule 
change would not change the wording of Rule G-14.

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 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

1. Purpose
    The MSRB 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 MSRB has expanded the scope of the public transparency 
reports in several steps. Each step has provided industry participants 
and the public successively 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; in October 2000, a monthly 
comprehensive report, covering all transactions effected during the 
previous month, began operation; and in November 2001, a daily 
comprehensive report was begun, with trades effected two weeks 
earlier.
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    In May, 2001, the MSRB announced its plan to begin reporting trades 
in ``real time'' on a schedule coordinated with the industry's 
timetable for migration to an environment of next-day settlement of 
securities transactions.\4\ To attain real-time reporting, the MSRB 
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. The planned implementation date for real-time reporting is 
now set for mid-2004.
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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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    Prior to the implementation of real-time transaction reporting, the 
MSRB intends to continue to increase transparency in the market using 
the currently available data. As its next step, the MSRB is now 
proposing to disseminate the Daily Comprehensive Report with a one-week 
delay. The proposed Report would contain details of all municipal 
securities transactions that were effected during the trading day one 
week earlier. Data about each trade on the proposed Report would be the 
same as that on the current Daily Comprehensive Transaction Report. For 
each trade, the proposed Report, like the current 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.
    The current Daily Comprehensive Report began operation on November 
1, 2001.\5\ The proposed Report, with a one-week delay, would replace 
the current report that has a two-week delay.
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    \5\ See Release No. 34-44894 (October 2, 2001), 66 FR 51485 
(October 9, 2001).
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Description of Service
    Like the current two-week delayed report, the new Report will be 
available daily to subscribers. Subscribers to the current two-week 
delayed report would continue to access the proposed Report via the 
Internet and download copies from the MSRB's computer using a password-
protected FTP account. The MSRB expects that the proposed Report would 
be available within two weeks of approval by the Commission.
    The MSRB will continue the established annual fee for the Service 
of $2,000. The fee is structured approximately to defray the MSRB's 
costs for production of daily data sets, operation of 
telecommunications lines, and subscription maintenance. Subscription 
fees that have been paid for the two-week delayed report will be 
applied toward the one-week delayed report.
    To enable the MSRB to compile a comprehensive trades database for 
enforcement purposes, dealers report a small amount of data after trade 
date,

[[Page 47013]]

and a few trades may be added, deleted or amended as late as a few 
weeks after trade date.\6\ To ensure that subscribers to the report 
have access to those trades, the MSRB will make available each day an 
``updated'' report containing all trades effected one month previously. 
This will enable subscribers to see the effect of changes reported by 
dealers after the one-week report was disseminated.
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    \6\ See Release No. 34-43060 (July 20, 2000), 65 FR 46188-46189 
(July 27, 2000) at note 7. Approximately one percent of the trades 
in the database have data submitted between one week and one month 
after trade date.
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2. Basis
    The MSRB has adopted the proposed rule change pursuant to Section 
15B(b)(2)(I) of the Act, which authorizes the MSRB to adopt rules that 
provide for the operation and administration of the Board.

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 in that 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 on the proposed rule change 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 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. 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 MSRB's principal offices. 
All submissions should refer to File No. SR-MSRB-2002-07 and should be 
submitted by August 7, 2002.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-17972 Filed 7-16-02; 8:45 am]
BILLING CODE 8010-01-P