[Federal Register Volume 69, Number 239 (Tuesday, December 14, 2004)]
[Notices]
[Pages 74553-74554]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3635]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50820; File No. SR-MSRB-2004-06]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Approving Proposed Rule Change To Create Real-Time 
Transaction Price Service and Propose Annual Subscription Fee

December 8, 2004.
    On October 26, 2004, the Municipal Securities Rulemaking Board 
(``MSRB'' or ``Board''), filed with the Securities and Exchange 
Commission (``SEC'' or ``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 create the Real-Time 
Transaction Price Service (the ``Service'') and propose an annual 
subscription fee for the Service. The proposed rule change was 
published for comment in the Federal Register on November 4, 2004.\3\ 
The Commission received one comment letter regarding the proposal.\4\ 
On November 30, 2004, the MSRB filed a response to the comment 
letter.\5\ This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 50605 (October 29, 
2004), 69 FR 64346 (November 4, 2004) (``Notice'').
    \4\ See e-mail letter from Al Adler, CEO, Munibond.com, to [email protected], dated November 4, 2004 (``Mr. Adler's Letter'').
    \5\ See letter from Jill C. Finder, Assistant General Counsel, 
MSRB, to Martha M. Haines, Chief, Office of Municipal Securities, 
Division of Market Regulation, Commission, dated November 30, 2004 
(``MSRB's Response Letter'').
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to the MSRB \6\ and, in particular, the 
requirements of Section 15B(b)(2)(C) of the Act and the rules and 
regulations thereunder.\7\ Section 15B(b)(2)(C) of the Act requires, 
among other things, 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, clearing, settling, processing 
information with respect to, and facilitating transactions in municipal 
securities, to remove impediments to

[[Page 74554]]

and perfect the mechanism of a free and open market in municipal 
securities, and, in general, to protect investors and the public 
interest.\8\ In particular, the Commission finds that the proposed rule 
change will increase transparency and facilitate the fair pricing of 
municipal securities transactions.
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    \6\ 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).
    \8\ Id.
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    Mr. Adler's Letter expressed concerns about the pricing of the 
Real-Time Transaction Price Service, stating that the Service will 
increase the abuses and inequalities in the municipal bond market and 
will be of immediate benefit to large bond dealers at the expense of 
small investors. Mr. Adler stated that the delivery fee was drastically 
inflated to discourage small bond investors from using the Service and 
that the MSRB should cut the fee for the Service as far as possible, 
perhaps even making it free, if the MSRB wants to help the small 
municipal bond investor have any degree of information parity with the 
larger firms.
    The MSRB's Response Letter states that the MSRB's intent is to 
achieve the widest possible dissemination of the real-time data, with 
the ultimate goal of making the data available to investors for free or 
at a very modest cost. The MSRB stated that it strongly encourages the 
redistribution of data obtained through the Real-Time Transaction 
Reporting System, and that, toward this end, subscribers to the Service 
will be allowed to re-disseminate transaction data to an unlimited 
number of their own customers or clients at no additional charge. The 
MSRB further stated that by not charging for or restricting re-
dissemination of the transaction data, the MSRB wishes to encourage 
information vendors--and various other entities that make securities 
data available to members of the securities industry and the public--to 
use the transaction data in their products and services. Finally, the 
MSRB stated that, through this approach, the MSRB anticipates that it 
will be possible for a typical individual investor to obtain the 
transaction data that is relevant to his or her investments for free or 
at a very modest cost.
    After careful consideration, the Commission believes the proposed 
annual subscription fee for the Real-Time Transaction Price Service 
satisfies the statutory standards, and that the proposed rule change 
will increase transparency and facilitate the fair pricing of municipal 
securities transactions. For the reasons discussed above, the 
Commission finds that the proposal is consistent with the Act and the 
rules and regulations thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-MSRB-2004-06) be, and hereby 
is, approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E4-3635 Filed 12-13-04; 8:45 am]
BILLING CODE 8010-01-P