[Federal Register Volume 70, Number 163 (Wednesday, August 24, 2005)]
[Notices]
[Pages 49699-49700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4622]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52289, File No. SR-MSRB-2005-09]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Approving Proposed Rule Change Relating to Month-End 
Performance Data for Municipal Fund Securities Under MSRB Rule G-21

August 18, 2005.
    On June 2, 2005, 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 amending MSRB Rule G-21, on 
advertising, to establish requirements relating to the availability of 
performance data current to the most recent month-end in connection 
with advertisements by brokers, dealers and municipal securities 
dealers containing performance data for municipal fund securities. The 
proposed rule change was published for comment in the Federal Register 
on July 11, 2005.\3\ The Commission received one comment letter 
regarding the proposal.\4\ 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. 51951 (June 30, 
2005), 70 FR 39833 (July 11, 2005).
    \4\ See letter to Jonathan G. Katz, Secretary, Commission, from 
Tamara K. Salmon, Senior Associate Counsel, Investment Company 
Institute (``ICI''), dated July 25, 2005 (``ICI's Letter'').
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    The proposed rule change would amend Rule G-21 to require dealers 
to include in advertisements that contain performance data for 
municipal fund securities a phone number or Web address where investors 
may obtain performance data current to the most recent month-end, 
unless the data included in the advertisement is itself current to the 
most recent month-end. A full description of the proposal is contained 
in the Commission's Notice.\5\ The MSRB proposes that dealers be 
required to comply with the proposed rule change for advertisements of 
municipal fund securities submitted or caused to be submitted for 
publication on or after December 1, 2005.\6\
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    \5\ See supra note 3.
    \6\ This effective date conforms to the effective date for other 
changes made to Rule G-21 earlier this year. See Exchange Act 
Release No. 51736 (May 24, 2005), 70 FR 31551 (June 1, 2005).
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    ICI's Letter strongly supported the proposed amendments, which 
would bring advertising rules for municipal fund securities more in 
line with the requirements of Rule 482 adopted by the SEC under the 
Securities Act of 1933, as amended.\7\ The ICI's Letter stated that 
greater uniformity with the advertising requirements applicable to 
mutual funds is appropriate because municipal fund securities and 
mutual funds share many common features, including the manner in which 
they are advertised to investors. The ICI's Letter also stated that 
uniform standards will facilitate the NASD's ability to conduct 
inspections because the NASD is charged with inspecting securities 
firms for compliance with both MSRB and SEC advertising rules.
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    \7\ 15 U.S.C. 77a et seq.
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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 \8\ and, in particular, the 
requirements of Section 15B(b)(2)(C) of the Act and the rules and

[[Page 49700]]

regulations thereunder.\9\ 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 and perfect the mechanism of a 
free and open market in municipal securities, and, in general, to 
protect investors and the public interest.\10\ In particular, the 
Commission finds that the proposed rule change will further investor 
protection by making information provided in advertisements of 
municipal fund securities more up-to-date and more comparable among 
different municipal fund securities investments and between municipal 
fund securities and registered mutual funds.
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    \8\ 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).
    \9\ 15 U.S.C. 78o-4(b)(2)(C).
    \10\ Id.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-MSRB-2005-09) be, and hereby 
is, approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4622 Filed 8-23-05; 8:45 am]
BILLING CODE 8010-01-P