[Federal Register Volume 71, Number 115 (Thursday, June 15, 2006)]
[Notices]
[Pages 34655-34656]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-9353]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53960, File No. SR-MSRB-2006-01]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Approving Proposed Rule Change and Amendment No. 1 
Relating to Withdrawal of Obsolete Question-and-Answer Interpretive 
Guidance Under Former Rule G-38, on Consultants, and Certain Question-
and-Answer Interpretive Guidance Relating to the Definition of 
``Solicitation'' Under Rule G-37, on Political Contributions and 
Prohibitions on Municipal Securities Business

June 8, 2006.
    On March 28, 2006, 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 delete obsolete Question-and-
Answer (``Q&A'') interpretive guidance under former Rule G-38, on 
consultants, and certain Q&A interpretive guidance relating to the 
definition of ``solicitation'' under Rule G-37, on political 
contributions and prohibitions on municipal securities business. On 
April 20, 2006, the MSRB filed Amendment No. 1 to the proposed rule 
change.\3\ The proposed rule change was published for comment in the 
Federal Register on May 5, 2006.\4\ The Commission received no comment 
letters regarding the proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 deletes one additional Q&A providing 
interpretive guidance under Rule G-37 and former Rule G-38.
    \4\ See Securities Exchange Act Release No. 53746 (May 1, 2006), 
71 FR 26577 (May 5, 2006).
---------------------------------------------------------------------------

    The proposed rule change deletes obsolete Q&A interpretive guidance 
under former Rule G-38, on consultants, and certain Q&A interpretive 
guidance relating to the definition of ``solicitation'' under Rule G-
37. On August 29, 2005, new Rule G-38, on solicitation of municipal 
securities business, became effective, superseding former Rule G-38 on 
consultants.\5\ The MSRB had previously published a number of Q&A 
interpretations on the former rule, none of which continue to apply to 
new Rule G-38 since the consultant provisions to which they relate are 
no longer in effect.

[[Page 34656]]

Accordingly, the MSRB is deleting all obsolete Rule G-38 Qs&As.
---------------------------------------------------------------------------

    \5\ Securities Exchange Act Release No. 52278 (August 17, 2005); 
70 FR 49342 (August 23, 2005).
---------------------------------------------------------------------------

    The MSRB filed a related proposed rule change \6\ relating to the 
definition of solicitation under MSRB Rules G-37 and G-38 (the 
``companion proposed rule change''). The companion proposed rule change 
inserts the substantive language of the Rule G-37 solicitation Qs&As 
deleted in this proposal into the text of the solicitation guidance 
provided in the companion proposed rule change. Accordingly, the 
proposed rule change and the companion proposed rule change consolidate 
the MSRB's guidance on the definition of solicitation for purposes of 
Rules G-37 and G-38.
---------------------------------------------------------------------------

    \6\ See File No. SR-MSRB-2005-11.
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to the MSRB \7\ and, in particular, 
the requirements of Section 15B(b)(2)(C) of the Act \8\ and the rules 
and regulations thereunder. 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.\9\ In particular, the 
Commission finds that the proposed rule change will help dealers 
understand their obligations under MSRB rules designed to maintain 
standards of fair practice and professionalism, thereby helping to 
maintain public trust and confidence in the integrity of the municipal 
securities market.
---------------------------------------------------------------------------

    \7\ 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).
    \8\ 15 U.S.C. 78o-4(b)(2)(C).
    \9\ Id.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-MSRB-2006-01), as amended, 
be, and hereby is, approved.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).
    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-9353 Filed 6-14-06; 8:45 am]
BILLING CODE 8010-01-P