[Federal Register Volume 83, Number 245 (Friday, December 21, 2018)]
[Notices]
[Pages 65765-65768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27615]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84837; File No. SR-MSRB-2018-09]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change to the MSRB's Facility for the Electronic Municipal Market
Access System (EMMA)
December 17, 2018.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\
notice is hereby given that on December 7, 2018 the Municipal
Securities Rulemaking Board (the ``MSRB'' or ``Board'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which Items have
been prepared by the MSRB. 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 filed with the Commission a proposed rule change
(``proposed rule change'') to the MSRB's facility for the Electronic
Municipal Market Access system (EMMA[supreg]) to modernize and
consolidate the information facility for the EMMA system, which
consists of the EMMA Primary Market Disclosure Service, the EMMA
Continuing Disclosure Service, the EMMA Trade Price Transparency
Service and the EMMA Short-Term Obligation Rate Transparency Service
(``EMMA IF''). The MSRB has filed the proposed rule change under
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) \4\
thereunder, as a noncontroversial rule change that renders the proposal
effective upon filing. The proposed rule change would be made operative
on January 10, 2019.
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\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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The text of the proposed rule change is available on the MSRB's
website at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2018-Filings.aspx, 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 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
The proposed rule change consists of amendments to the EMMA IF.\5\
The EMMA IF sets forth the material aspects of the operation of the
EMMA system by describing the basic functionality of, and the high-
level parameters by which
[[Page 65766]]
the MSRB operates, the EMMA system. The EMMA system is an information
system for the collection and dissemination of municipal securities
disclosure documents and related information. Issuers, obligated
persons, brokers, dealers, municipal securities dealers, and the
general public routinely interact with the EMMA system, as it is the
information system that receives, displays and disseminates information
under certain MSRB rules and Exchange Act Rule 15c2-12 (``Rule 15c2-
12''),\6\ as promulgated by the SEC.
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\5\ The EMMA IF is currently available on the MSRB's website at
http://www.msrb.org/Rules-and-Interpretations/MSRB-Rules/Facilities/EMMA-Facility.aspx.
\6\ 17 CFR 240.15c2-12.
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For example, MSRB Rule G-32 (``Rule G-32''), on the disclosure
obligations of brokers, dealers, and municipal securities dealers
(collectively, ``dealers'') in primary offerings, generally requires
underwriters of a primary offering of municipal securities to submit
the official statement for such offering to the EMMA system within one
business day after receipt of the official statement from the issuer or
its designee, but by no later than the closing date.\7\ Rule G-32 also
requires that dealers acting as underwriters in the primary offering of
municipal securities to submit information in accordance with MSRB Form
G-32, such as the name of the managing underwriter and security type
for each issue in the offering.\8\ Rule 15c2-12 specifies a list of
events that certain dealers acting as a participating underwriter in an
offering of municipal securities must reasonably determine that an
issuer or an obligated person has undertaken, in a written agreement or
contract for the benefit of the holders of the municipal securities, to
provide to the MSRB by submission to the EMMA system.
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\7\ See MSRB Rule G-32, available at: http://www.msrb.org/Rules-and-Interpretations/MSRB-Rules/General/Rule-G-32.aspx.
\8\ See MSRB Form G-32, available at: http://www.msrb.org/Rules-and-Interpretations/Form-G-32.aspx.
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Background
The EMMA system includes a public website, the EMMA Portal, which
provides free public access to disclosures and transparency information
for municipal securities. The EMMA system also includes certain paid
subscription feeds, which provide access to certain documents and
information for a commercially reasonable fee in accordance with the
terms of a subscription agreement between the MSRB and a subscribing
counterparty.
The EMMA system began operation on March 31, 2008 as a pilot
facility of the MSRB's existing Official Statement and Advance
Refunding Document system of the Municipal Securities Information
Library system.\9\ On December 8, 2008, the MSRB received approval from
the SEC to establish the continuing disclosure service of the EMMA
system effective as of July 1, 2009.\10\ The MSRB's most recent
amendment to the EMMA IF was in August 2015, which added descriptions
regarding the core operational hours for the EMMA system and the
general availability of the system.\11\
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\9\ See Securities Exchange Act Release No. 57577 (March 28,
2008), 73 FR 18022 (April 2, 2008) (File No. SR-MSRB-2007-06)
(approving operation of the EMMA pilot to provide free public access
to the MSIL system collection of official statements and advance
refunding documents and to the MSRB's Real-Time Transaction
Reporting System historical and real-time transaction price data).
\10\ See Securities Exchange Act Release No. 59061 (December 5,
2008), 73 FR 75778 (December 12, 2008) (File No. SR-MSRB-2008-05)
(approving the continuing disclosure service of the EMMA system with
an effective date of July 1, 2009).
\11\ See Securities Exchange Act Release No. 75602 (August 4,
2015), 80 FR 47976 (August 10, 2015) (File No. MSRB-2015-06).
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The MSRB launched the EMMA Portal (emma.msrb.org) in March 2008 as
an online source of key municipal market information. The EMMA Portal
continues to serve as the venue for public access to variable rate
security information, transaction data, primary market disclosures and
continuing disclosures. The MSRB makes available its set of official
statements and advance refunding documents for free on the EMMA Portal.
The EMMA system has been the centralized repository of all continuing
disclosures in the municipal market pursuant to Rule 15c2-12 since July
2009. In addition to those disclosures specifically identified in Rule
15c2-12, the MSRB also provides issuers and obligated persons with the
ability to post additional disclosures about their securities to the
EMMA Portal.
The purpose of the proposed rule change is to revise the EMMA IF to
harmonize its language with the recently revised Real-Time Transaction
Reporting System (RTRS) information facility (``RTRS IF''),\12\ as well
as to modernize and consolidate the EMMA IF. Given the revisions to the
RTRS IF and the SEC's recent amendments to Rule 15c2-12,\13\ the MSRB
performed a comprehensive review of the EMMA IF to evaluate whether it
sufficiently and clearly describes the basic functionality and
operation of the EMMA system. The MSRB believes that issuers, obligated
persons, dealers, other submitters \14\ and subscribers \15\ benefit
from this information being provided in a concise and organized manner.
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\12\ See Securities Exchange Act Release No. 83038 (April 12,
2018), 83 FR 17200 (April 18, 2018) (File No. MSRB-2018-02).
\13\ See Securities Exchange Act Release No. 83885 (August 20,
2018), 83 FR 44700 (August 31, 2018) (File No. MSRB-S7-01-17).
\14\ As further described in the EMMA IF, a submitter means an
issuer, obligated person, dealer, or agent acting on behalf of an
issuer, obligated person, or dealer, that has been authorized to
interface with the EMMA system for the purposes of submitting
documents and other related information into the system.
\15\ Subscriber refers to an individual or entity that receives
the dissemination of data from the EMMA system through an MSRB
subscription service.
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Proposed Amendments to the RTRS Information Facility
(i) Consolidating Format and Streamlining Redundancies
The EMMA IF is currently structured such that there are separate
segmented topics within the information facility, including separate
sections for the EMMA Primary Market Disclosure Service, EMMA
Continuing Disclosure Service, EMMA Trade Transparency Service, EMMA
Short-Term Obligation Rate Transparency Service, and EMMA subscription
services. Many of these segmented topics were initially designed to
stand alone and consequently include redundant information included
elsewhere in the EMMA IF.
The proposed rule change would reorganize the EMMA IF by
streamlining this information repeated in each topic section and
incorporating it into a general introductory section. In this way, the
proposed amendments would consolidate repetitive references in the EMMA
IF and ensure overall consistency within the document. For example, the
proposed rule change would consolidate the descriptions of the EMMA
Portal, currently repeated under multiple topic segments, into a
distinct description in the information facility with its own section.
Similarly, the proposed amendments would consolidate information
regarding the core operational hours into a single description included
in the introductory section. The proposed rule change also consolidates
several other repetitive references under the various topic segments in
the EMMA IF.
The proposed rule change would also eliminate certain descriptions
regarding the EMMA Trade Price Transparency Service and the EMMA Short-
Term Obligation Rate Transparency Service that repeat technical
descriptions already provided in the RTRS IF and the Short-Term
Obligation Rate Transparency (SHORT) information facility (``SHORT
IF''). The proposed rule change would eliminate this redundant
information and replace it
[[Page 65767]]
with shorter cross-references to the RTRS IF and SHORT IF. This
amendment would promote consistent language across each of the MSRB's
information facilities and reduce the potential for conflicting
descriptions of services that overlap among the EMMA IF, SHORT IF, and
RTRS IF.
(ii) Consistency of Rule References
As the EMMA system is the MSRB's facility for the collection of
information about primary offering and continuing disclosures occurring
in the municipal securities market, the EMMA IF includes references to
obligations under Rule 15c2-12 and Form G-32. The proposed rule change
would ensure that, if regulatory language is referenced, the most
current language is used in the EMMA IF. Similarly, the proposed
amendments attempt to limit the need for filing future amendments to
the EMMA IF by utilizing language that would remain applicable absent a
material change to an existing regulatory obligation. To that end, the
proposed rule change would eliminate some of the narrow detail
regarding the categories and types of Rule 15c2-12 disclosure documents
that the EMMA IF receives. It replaces this language with a more
general statement, which accounts for the new amendments to Rule 15c2-
12 related to the incurrence of a financial obligation and events
related to financial obligations which reflect financial difficulties.
(iii) Improved Descriptions of EMMA Functionality
As part of its comprehensive review, the MSRB analyzed whether
aspects of the EMMA IF could be enhanced to more precisely or concisely
describe the EMMA system's functionality and operation, while ensuring
that the EMMA IF continues to appropriately describe the basic
functionality of and the high-level parameters by which the MSRB
operates the EMMA system.
One area where the MSRB determined that an enhanced description of
EMMA system functionality would be beneficial is in reference to the
process for posting documents and information on display on the EMMA
Portal and dissemination through the EMMA subscription services. The
EMMA IF frequently references that the EMMA system displays and
disseminates documents and information within certain timeframes upon
the EMMA system's ``acceptance.'' The term ``acceptance'' could be
interpreted to suggest that the MSRB formally approves or otherwise
reviews the substantive content of a submission prior to its display or
dissemination through the EMMA Portal or that the documents and
information submitted are directly displayed or disseminated without
further processing. The proposed amendments would uniformly revise this
language to clarify that documents and information are posted on the
EMMA Portal promptly following the processing of a submission through
the EMMA system. For purposes of the EMMA IF, promptly shall mean
within 15 minutes following the successful intake of the data by the
EMMA system, transformation of such data for operational usability, and
storage for effective retrieval for display or dissemination to users
of the EMMA Portal and, as applicable, to licensed subscribers of EMMA
subscription services (``processing''). This clarification better
describes the EMMA system's ministerial function of intaking,
displaying and disseminating documents and information. This
description also reflects the fact that, prior to display and
dissemination, the EMMA system, among other things, conducts routine
format checks, validates the submitter, and may timestamp the data, but
does not conduct a more formal review accepting the substantive content
of the documents and information submitted. Notably, this change is
consistent with the recent amendments to the RTRS IF, which now states
that real-time dissemination for RTRS functionality occurs ``promptly
following processing in RTRS.''
(iv) Removal of Certain Technical and Ancillary Information
Given that the purpose of the EMMA IF is to set forth the material
aspects of the EMMA system's operation, highly technical and ancillary
information regarding the EMMA system is more appropriately provided in
the EMMA User Guide and similar documents that the MSRB maintains on
its publicly available website (msrb.org).
The MSRB maintains several specification documents for the EMMA
system, including the EMMA User Guide, Primary Market Submission
Manual, Primary Market Submission Specifications, Preliminary Official
Statement Submission Specifications, Continuing Disclosure Submission
Manual, Continuing Disclosure Submission Specifications, and others
(collectively, the ``EMMA Reporting Specifications''). The EMMA
Reporting Specifications documents are available on the MSRB's publicly
available website.\16\ The EMMA Reporting Specifications provide
detailed information regarding, among other things, user guides for
website submission interfaces and input specifications for computer-to-
computer submission. Similarly, the Specifications for EMMA Primary
Market Disclosure Subscription Service, the Specifications for the MSRB
Continuing Disclosure Subscription Service, and other EMMA subscription
specifications (collectively, the ``EMMA Subscription Service
Specifications'') provide specifications and requirements to access,
retrieve and understand EMMA subscription services.\17\ The MSRB also
maintains an MSRB Subscription Services Price List on its website to
inform interested individuals about the pricing for EMMA subscription
services.
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\16\ The EMMA Reporting Specifications are currently available
on the MSRB's website, including at: http://www.msrb.org/Market-Transparency/Manuals.aspx.
\17\ The EMMA Subscription Service Specifications are currently
available on the MSRB's website at: http://www.msrb.org/Market-Transparency/Subscription-Services-and-Products/MSRB-Continuing-Disclosure-Subscription.aspx and http://www.msrb.org/Market-Transparency/Subscription-Services-and-Products/MSRB-Primary-Market-Subscriptions.aspx.
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The proposed rule change would remove certain technical and
ancillary information from the EMMA IF that is presented in the EMMA
Reporting Specifications, EMMA Subscription Services Specifications,
and MSRB Subscription Services Price List. The removal of such
information will streamline the EMMA IF by only presenting the
information that is necessary to describe the material aspects of the
operation of the EMMA system.
2. Statutory Basis
The MSRB believes that the proposed rule change is consistent with
the provisions of Section 15B(b)(2)(C) of the Act,\18\ which provides
that the MSRB's rules shall:
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\18\ 15 U.S.C. 78o-4(b)(2)(C).
. . . 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 and
municipal financial products, to remove impediments to and perfect
the mechanism of a free and open market in municipal securities and
municipal financial products, and, in general, to protect investors,
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municipal entities, obligated persons, and the public interest.
The proposed rule change would contribute to the MSRB's continuing
efforts to improve market transparency by providing greater
transparency
[[Page 65768]]
regarding the material functionality and operations of the EMMA system.
As the EMMA system disseminates information about transactions
occurring in the municipal securities market, any improvement with
respect to the understanding of how the EMMA system operates will
further perfect the mechanism of a free and open market in municipal
securities. In addition, the clarifying amendments to the EMMA IF serve
to foster the cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in municipal securities and municipal
financial products, by making it more likely that the market is
promptly provided with the latest information.
Specifically, the proposed amendments would increase the clarity
and precision with respect to the description of basic EMMA system
functionality and the high-level parameters by which the MSRB operates
the EMMA system. The MSRB believes that issuers, obligated persons,
dealers, other submitters and subscribers will benefit from a clearer
understanding of this information. While additional technical
information regarding the EMMA system is set forth in the EMMA
Reporting Specifications, the EMMA Subscription Services
Specifications, and other similar documents that the MSRB maintains,
the MSRB believes that it is important that material information
regarding the EMMA system be clearly described in the EMMA IF. The
proposed rule change serves this purpose.
B. Self-Regulatory Organization's Statement on Burden on Competition
Section 15B(b)(2)(C) of the Act \19\ requires that MSRB rules not
be designed to impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
rule change consists of revisions to the EMMA IF to better align the
language of the information facility to the MSRB's administration of
the EMMA system. The proposed rule change seeks to clarify existing
services and make minor changes of a technical nature to the
information facility, including certain revisions resulting from recent
amendments to Rule 15c2-12. The proposed rule change will not
substantively modify the manner in which the MSRB administers the EMMA
system in collecting and disseminating information about municipal
securities. Accordingly, the MSRB does not believe that the proposed
rule change will result in any burden on competition that is not
necessary or appropriate in furtherance of the Act.
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\19\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Board did not solicit comment on the proposed change.
Therefore, there are no comments on the proposed rule change received
from members, participants or others.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \20\ and Rule 19b-
4(f)(6) thereunder.\21\
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\20\ 15 U.S.C. 78s(b)(3)(A).
\21\ 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 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.
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 email to [email protected]. Please
include File Number SR-MSRB-2018-09 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549.
All submissions should refer to File Number SR-MSRB-2018-09. This file
number should be included on the subject line if email 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 website (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 website 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 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the MSRB. All comments received
will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-MSRB-2018-09 and should be submitted on
or before January 11, 2019.
For the Commission, pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27615 Filed 12-20-18; 8:45 am]
BILLING CODE 8011-01-P