[Federal Register Volume 75, Number 221 (Wednesday, November 17, 2010)]
[Notices]
[Pages 70335-70337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28986]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63308; File No. SR-MSRB-2010-15]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of Rule D-13, on a 
Definition of ``Municipal Advisory Activities'', Rule D-14, on a 
Definition of ``Appropriate Regulatory Agency'', and Amendments to Rule 
D-11 (``Associated Persons''), Rule G-40 on Electronic Mail Contacts, 
and Form G-40, on Electronic Mail Contacts

November 12, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``the Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 10, 2010, the Municipal Securities Rulemaking Board 
(``Board'' or ``MSRB'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been prepared by 
the MSRB. The Board has designated the proposed rule change as 
concerned solely with the administration of the Board or other matters 
which the Commission, by rule, consistent with the public interest and 
the purposes of this subsection, may specify as without the provisions 
of Section 19(b)(2) of the Act. 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 a proposed rule change relating to municipal 
advisors, consisting of: (i) Amendments to Rule D-11 (definition of 
``associated persons''); (ii) new Rule D-13 (definition of ``municipal 
advisory activities''); (iii) new Rule D-14 (definition of 
``appropriate regulatory agency''); (iv) amendments to Rule G-40, on 
electronic mail contacts, by municipal advisors; and (v) amendments to 
Form G-40, on electronic mail contacts. The proposed rule change is 
effective immediately upon filing.
    The text of the proposed rule change is available on the MSRB's Web 
site at http://www.msrb.org/Rules-and-Interpretations/SEC-Filings/2010-Filings.aspx, at the MSRB's principal office, and at the Commission's 
Public Reference Room.

[[Page 70336]]

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 Board 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 purposes of the proposed rule change are: (i) To complete the 
rulemaking that is necessary for the registration of municipal advisors 
with the MSRB (amended Rule G-40 and amended Form G-40) and (ii) to 
define certain terms that are necessary to the MSRB rules governing 
rulemaking concerning municipal advisors and the process of registering 
municipal advisors with the MSRB. Specifically, the proposed rule 
change consists of: (i) An amendment to Rule D-11 to provide that the 
term ``municipal advisor'' in MSRB rules shall include the associated 
persons of such municipal advisor unless otherwise specified, (ii) a 
new Rule D-13 that defines ``municipal advisory activities'' with 
respect to the activities of municipal advisors described in Section 
15B(e)(4)(A)(i) and (ii) of the Act, (iii) a new Rule D-14 that defines 
``appropriate regulatory agency'' to have the meaning set forth in 
Section 3(a)(34) of the Act with respect to a broker, dealer, or 
municipal securities dealer and to mean the Commission with respect to 
a municipal advisor; (iv) amendments to Rule G-40 concerning the 
provision of electronic mail contacts by municipal advisors, and (v) 
amended Form G-40 concerning the provision of electronic mail contacts 
by municipal advisors.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2) of the Act, which provides that:

    The Board shall propose and adopt rules to effect the purposes 
of this title with respect to transactions in municipal securities 
effected by brokers, dealers, and municipal securities dealers and 
advice provided to or on behalf of municipal entities or obligated 
persons by brokers, dealers, municipal securities dealers, and 
municipal advisors with respect to municipal financial products, the 
issuance of municipal securities, and solicitations of municipal 
entities or obligated persons undertaken by brokers, dealers, 
municipal securities dealers, and municipal advisors.

    The proposed rule change is consistent with Section 15B(b)(2) of 
the Act, because it: (i) Is essential to the registration with the MSRB 
of the municipal advisors described in Section 15B(b)(2) of the Act and 
(ii) defines certain terms that are necessary to the MSRB rules 
governing such municipal advisors and the process of registering such 
advisors with the MSRB.
    Section 15B(2)(L) of the Act requires that rules adopted by the 
Board

    not impose a regulatory burden on small municipal advisors that 
is not necessary or appropriate in the public interest and for the 
protection of investors, municipal entities, and obligated persons, 
provided that there is robust protection of investors against fraud.

    The proposed rule change does not impose a regulatory burden on 
small advisors that is not necessary or appropriate in the public 
interest and for the protection of investors, municipal entities, and 
obligated persons and for the robust protection of investors against 
fraud. Rule G-40, as amended by the proposed rule change, only requires 
municipal advisors to submit basic contact information and to select 
the categories of municipal advisors that best describe them. The MSRB 
expects that municipal advisors will need no more than 15 minutes to 
complete electronic Form G-40, but the MSRB will have staff ready to 
assist them should they have any questions. Any burden on municipal 
advisors is de minimis. The portion of the proposed rule change that 
consists of definitions will impose no burden on any municipal advisor. 
While the proposed rule change, at best, imposes only a de minimis 
burden on municipal advisors, the proposed rule change is necessary for 
the MSRB to have a record of the municipal advisors it regulates, so 
that it may keep them abreast of regulatory developments, better target 
its rulemaking and professional qualifications examinations to 
different types of municipal advisors, and identify to the Commission 
those municipal advisors who have reportedly violated MSRB rules.

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 that is not necessary or appropriate in 
furtherance of the purposes of the Act, since it would apply equally to 
all municipal advisors.

C. Self-Regulatory Organization's Statement on Comments Received on the 
Proposed Rule Change by 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

    The MSRB represented that the proposed rule change qualifies for 
immediate effectiveness pursuant to Section 19(b)(3)(A)(iii) of the Act 
\3\ thereunder, because it: (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 after filing or such shorter time as the 
Commission may designate consistent with the protection of investors 
and the public interest.\4\
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    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ In addition, Rule 19b-4(f)(6)(iii) requires a self-
regulatory organization to give the Commission written notice of its 
intent to file the proposed rule change at least five business days 
prior to the date of filing of the proposed rule change, or such 
shorter time as designated by the Commission.
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    The MSRB provided the required written notice of its intention to 
file the proposed rule change to the Commission on October 22, 2010.
    The MSRB has requested that the Commission designate a shorter time 
period for the proposed rule change to become operative, that is, on 
November 15, 2010, and has represented that the proposed rule change is 
not controversial, that it is integrally related to SR-MSRB-2010-14, 
which became effective November 9, 2010, and that it is necessary for 
the completion of rulemaking related to the registration of municipal 
advisors with the MSRB. The MSRB has stated that an earlier operative 
date of November 15, 2010 will permit the MSRB to begin to register 
municipal advisors and will provide municipal advisors with additional 
time to complete their registration process with the MSRB by no later 
than January 1, 2011. The Commission hereby grants the MSRB's request 
and believes that waiving the 30-day operative delay is consistent with 
the protection of investors and the public interest.\5\ The earlier 
operative date will allow municipal advisors

[[Page 70337]]

additional time to register with the MSRB.
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    \5\ For the purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule 
change's impact on efficiency, competition, and capital formation. 
See 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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.\6\
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    \6\ 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-2010-15 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-MSRB-2010-15. 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 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 Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street, NE., Washington, 
DC 20549, on official business days between the hours of 10 a.m. and 3 
p.m. 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-2010-15 and should be submitted on or before 
December 8, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28986 Filed 11-16-10; 8:45 am]
BILLING CODE 8011-01-P