[Federal Register Volume 71, Number 115 (Thursday, June 15, 2006)]
[Notices]
[Pages 34652-34653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5416]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53947; File No. SR-MSRB-2006-04]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to Amendment to Rule A-11, on Indemnification of 
Members and Employees

June 6, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ Rule 19b-4 thereunder,\2\ notice is hereby given that on 
May 25, 2006, 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 pursuant to Section 19(b)(3)(A)(iii) of 
the Act,\3\ and Rule 19b-4(f)(3) 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)(3).
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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 an amendment to Rule A-11, on indemnification of members 
and employees, to delete the entire rule language. 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 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 place 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 A-11, on Indemnification of members and employees, states that 
each member and employee of the MSRB shall be indemnified and held 
harmless against all liabilities and related expenses incurred in 
connection with the performance of his or her official duties, provided 
that such member or employee has acted, or omitted to act, in good 
faith and within the scope of his or her authority. The MSRB recently 
approved expanding the indemnification provisions for Board members and 
employees. Because the language of the expanded provisions was broader 
than the indemnification provided under Virginia law, where the MSRB is 
incorporated as a nonstock corporation, the expanded provisions needed 
to be included in the MSRB's Articles of Incorporation in order to be 
effective. The SEC recently approved a proposed rule change consisting 
of the MSRB's Restated Articles of Incorporation and By-Laws, which 
included the expanded indemnification provisions in the Restated 
Articles of Incorporation.\5\ Thus, the proposed rule change removes 
the indemnification provisions from Rule A-11 (and By-Law Article 
11).\6\
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    \5\ See Securities Exchange Act Release No. 53804 (May 15, 
2006), 71 FR 29194 (May 19, 2006).
    \6\ The MSRB stated in its filing of the Restated Articles of 
Incorporation and By-Laws that, once the MSRB obtains approval for 
the Restated Articles of Incorporation by the Commonwealth of 
Virginia, the MSRB would file with the SEC to delete Rule A-11 (and 
B-Law Article 11) for immediate effectiveness. See File No. SR-MSRB-
2006-02, Securities Exchange Act Release No. 53616 (April 7, 2006), 
71 FR 19571 (April 14, 2006).
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2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2)(I) of the Act,\7\ which

[[Page 34653]]

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 because it is concerned solely 
with the operation and administration of the MSRB.
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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 impose 
any burden on competition not necessary or appropriate in furtherance 
of the purposes of the Act since it only applies to the operation and 
administration of the MSRB.

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.

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

    The proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(3) thereunder \9\ because 
it is concerned solely with the administration of the MSRB. 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.\10\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(3).
    \10\ 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-2006-04 on the subject line:

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-MSRB-2006-04. 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-2006-04 and should be submitted on or before July 
6, 2006.
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    \11\17 CFR 200.30-(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 06-5416 Filed 6-14-06; 8:45 am]
BILLING CODE 8010-01-M