[Federal Register Volume 70, Number 131 (Monday, July 11, 2005)]
[Notices]
[Pages 39836-39838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3616]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51952; File No. SR-MSRB-2005-10]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Regarding Technical Amendment to Rule G-37, on Political 
Contributions and Prohibitions on Municipal Securities Business

June 30, 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 June 2, 2005, the Municipal Securities Rulemaking Board (``MSRB'' or 
``Board''), filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I, II and III below, which Items have been prepared by the MSRB. 
The MSRB has filed the proposal as a ``non-controversial'' rule change 
pursuant to Section 19(b)(3)(A)(iii) of the Act,\3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders the proposal effective upon filing 
with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 a technical amendment to Rule G-37, on political 
contributions and prohibitions on municipal securities business. The 
MSRB has set an effective date for the proposed rule change of July 5, 
2005. The text of the proposed rule change is available on the MSRB's 
Web site (http://www.msrb.org), at the MSRB's principal office, and at

[[Page 39837]]

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
    Rule G-37, on political contributions and prohibitions on municipal 
securities business, provides that contributions to officials of an 
issuer by a municipal finance professional (``MFP'') of a dealer can 
result in the dealer being banned from municipal securities business 
with such issuer for a period of two years. When a person first becomes 
an MFP, the rule imposes a ``look back'' in which certain contributions 
made by such person prior to becoming an MFP (in addition to 
contributions made after becoming an MFP) can result in the imposition 
of the ban. The nature of such look back varies depending on the type 
of MFP. In the case of persons who become MFPs solely as a result of 
their supervisory activities or firm leadership positions within the 
meaning of clause (C), (D) or (E) of Rule G-37(g)(iv) (``supervisor 
MFPs''), the look back period established in Rule G-37(b)(iii) is 
limited to the six month period prior to becoming an MFP.
    The MSRB has learned that some people may read the language in Rule 
G-37(b)(iii) literally to provide that the only contributions of 
supervisor MFPs that can result in a ban on business are those made 
during the six month look back period, and that contributions made 
after becoming such an MFP are excluded. This interpretation clearly 
was not the intent of this provision. The proposed rule change would 
clarify this language to ensure that those contributions made after 
becoming an MFP are also subject to the potential ban.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2)(C) of the Act,\5\ which provides that MSRB rules 
shall:

    \5\ 15 U.S.C. 78o-4(b)(2)(C).
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    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 and perfect the mechanism of a free and open market 
in municipal securities, and, in general, to protect investors and 
the public interest * * *

The MSRB believes that the proposed rule change clarifies the rule's 
intent of ensuring that the high standards and integrity of the 
municipal securities industry are maintained.

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 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not become 
operative for 30 days from June 2, 2005, the date on which it was 
filed, and the MSRB provided the Commission with written notice of its 
intent to file the proposed rule change at least five business days 
prior to the filing date, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(6) 
thereunder.\7\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.\8\
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    \8\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
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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:

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-2005-10 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-2005-10. 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 
principal office of the MSRB. 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-2005-10 and should be submitted on or before August 
1, 2005.


[[Page 39838]]


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Jill M. Peterson,
Assistant Secretary.
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    \9\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E5-3616 Filed 7-8-05; 8:45 am]
BILLING CODE 8010-01-P