[Federal Register Volume 70, Number 123 (Tuesday, June 28, 2005)]
[Notices]
[Pages 37142-37144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3346]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51892; File No. SR-MSRB-2005-08]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing of Proposed Rule Change Regarding Amendments to 
Rule G-40, on Electronic Mail Contacts, and Form G-40

June 21, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 26, 2005, the Municipal Securities Rulemaking Board (``MSRB'' or 
``Board'') filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change 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 is filing with the Commission a proposed rule change 
consisting of amendments to Rule G-40, on electronic mail contacts, and 
Form G-40 that would: (i) Eliminate the need

[[Page 37143]]

for paper submission of original forms; (ii) require each broker, 
dealer and municipal securities dealer (collectively ``dealers'') to 
maintain an Internet electronic mail account to permit communication 
with the MSRB; and (iii) require each dealer to review and, if 
necessary, update its Primary Contact information each calendar 
quarter. The text of the proposed rule change, as well as proposed 
amended Form G-40, are available on the MSRB's Web site (http://www.msrb.org), at the MSRB's principal office, and at the Commission's 
Public Reference Room.

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 
text 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 events of September 11, 2001 and the weeks that followed, 
emphasized the importance of, and need for an efficient and reliable 
means of official communication between regulators and the industry. 
Establishing a reliable method for electronic communication was 
necessary to allow the MSRB to efficiently alert dealers to official 
communications, including time-sensitive developments, rule changes, 
notices, etc., as well as to facilitate dealers' internal distribution 
of such information. In addition, the MSRB discontinued publication of 
MSRB Reports in 2002; MSRB notices have since been available 
exclusively on the MSRB's Web site at http://www.msrb.org. Thus, in 
2002 the MSRB adopted Rule G-40, on e-mail contacts, to ensure that 
such notices and other MSRB communications continued to reach each 
dealer.\3\
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    \3\ Rule G-40 was approved in SEC Release No. 34-46043 (June 6, 
2002), 67 FR 40762.
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    Rule G-40 requires dealers to use Form G-40 to appoint a ``Primary 
Contact'' for purposes of electronic communication between the dealer 
and the MSRB. The Primary Contact must be either a Series 53-registered 
municipal securities principal or a Series 51-registered municipal fund 
securities limited principal.\4\ Currently, dealers must submit their 
original Forms G-40 by mail. Thereafter, any changes to the forms may 
be made by mail or electronically through the dealer's electronic G-40 
account using the appropriate user ID and password.
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    \4\ Dealers may also appoint an ``Optional Contact'' and this 
person does not have to be a registered principal.
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    As the process of electronic communication between dealers and the 
MSRB has evolved over the past few years, it has become apparent that 
certain changes and enhancements are now required to ensure that this 
process remains both efficient and practical. In addition, the MSRB has 
observed that certain differences exist between Rule G-40 and similar 
NASD requirements. Whenever possible, the MSRB attempts to adopt 
similar provisions and comparable language to NASD rules in order to 
facilitate dealer understanding of and compliance with such provisions, 
as well as inspection and enforcement. NASD requires that each member 
appoint an ``executive representative'' to, among other things, serve 
as the official contact person between the member and the NASD.\5\ NASD 
also requires that the executive representative maintain an Internet e-
mail account for communication with NASD. And in May 2004, NASD Rule 
1150 became effective which requires NASD members to review and, if 
necessary, update their executive representative designation and 
contact information within 17 business days after the end of each 
calendar quarter.\6\
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    \5\Article IV, Section 3 of the NASD By-Laws requires members to 
appoint and certify to NASD one ``executive representative'' to 
represent, vote and act for the member in all NASD affairs. The 
executive representative must be a member of the firm's senior 
management and a registered principal of the member.
    \6\ SEC Release No. 34-49497 (March 29, 2004), 69 FR 17723.
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    The MSRB believes that Rule G-40 should contain an update provision 
similar to NASD's, and that, like NASD, its entire process should be 
electronic. Thus, the proposed amendments to Rule G-40 would require 
dealers to maintain an Internet e-mail account to permit communication 
with the MSRB, and would require that all Form G-40 submissions--
initial forms and subsequent updates and amendments--be completed 
electronically using the appropriate user ID and password. In addition, 
the amendments would require dealers to review and, if necessary, 
update information on their Primary Contact within 17 business days 
after the end of each calendar quarter. The proposed amendments to Rule 
G-40 necessitate certain changes to Form G-40, including an indication 
that electronic submission is required.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2)(I) of the Act,\7\ which authorizes the MSRB to adopt 
rules that provide for the operation and administration of the MSRB. 
The MSRB believes that the proposed rule change is consistent with this 
provision in that it will facilitate effective electronic communication 
between dealers and the MSRB, and that by ensuring MSRB requirements 
for electronic communication are substantially similar to NASD 
requirements, it will facilitate dealer understanding of, and 
compliance with, these requirements.
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    \7\ 15 U.S.C. 78o-4(b)(2)(I).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The MSRB does not believe that the proposed rule change will result 
in any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.

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 on the 
proposal.

 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, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

[[Page 37144]]

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-MSRB-2005-08 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.
    All submissions should refer to File Number SR-MSRB-2005-08. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, 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 such 
filing also will be available for inspection and copying at the MSRB's 
offices. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
MSRB-2005-08 and should be submitted on or before July 19, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-3346 Filed 6-27-05; 8:45 am]
BILLING CODE 8010-01-P