[Federal Register Volume 85, Number 190 (Wednesday, September 30, 2020)]
[Notices]
[Pages 61780-61781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21556]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89994; File No. SR-MSRB-2020-06]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change Consisting of Amendments to the MSRB's Amended and Restated
Articles of Incorporation
September 24, 2020.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on September 15, 2020 the Municipal Securities
Rulemaking Board (``MSRB'') filed with the Securities and Exchange
Commission (``SEC'' or ``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
consisting of amendments to its Amended and Restated Articles of
Incorporation (``Articles of Incorporation'') to conform the Articles
of Incorporation to recently-amended MSRB Rule A-3, on Board membership
(``Rule A-3'') (the ``proposed rule change''). The MSRB has designated
the proposed rule change as ``concerned solely with the administration
of the self regulatory organization'' under Section 19(b)(3)(A)(iii)
\3\ of the Act and Rule 19b-4(f)(3) \4\ thereunder, which renders the
proposal effective upon filing with the Commission.
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\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(3).
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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/2020-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
On August 5, 2020, the Commission approved a proposed rule change
that included amendments to Rule A-3.\5\ Among other things, the
amendments reduced the Board's size from 21 to 15 members through a
transition plan,\6\ modified the Board's class structure to reflect the
reduction in Board size, and permitted a Board member filling a vacancy
to serve for any part of an unexpired term, rather than requiring such
a Board member to serve for the entire unexpired portion.
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\5\ Exchange Act Release No. 89484 (Aug. 5, 2020), 85 FR 48579
(Aug. 11, 2020) (File No. SR-MSRB-2020-04).
\6\ Pursuant to the transition plan, the Board will include 17
members during fiscal year 2021 and 15 members thereafter.
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The Articles of Incorporation include provisions relating to Board
size, class structure, and Board terms, which the proposed rule change
would amend to conform to amended Rule A-3. To reflect the reduced
Board size and modified class structure, the proposed rule change would
amend the Articles
[[Page 61781]]
of Incorporation to refer to the By-Laws of the MSRB (``Bylaws''),
which restate Rule A-3,\7\ for the specific number of directors on the
Board and details regarding the Board's class structure. The Virginia
Nonstock Corporation Act,\8\ pursuant to which the MSRB is organized
under Virginia law, does not require the specific number of directors
to be set forth in the Articles of Incorporation \9\ and the reference
to the Bylaws for the specific number of directors and details
regarding the Board's class structure would ensure consistency between
the Articles of Incorporation and the Bylaws throughout the transition
period and thereafter.
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\7\ Specifically, Article 3 of the By-Laws restates Rule A-3.
\8\ Va. Code Ann. Sec. Sec. 13.1-801 et seq. (2016).
\9\ Va. Code Ann. Sec. 13.1-855(A) (2016) (``A board of
directors shall consist of one or more individuals, with the number
specified in or fixed in accordance with the bylaws, or if not
specified in or fixed in accordance with the bylaws, with the number
specified in or fixed in accordance with the articles of
incorporation.'').
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To incorporate amended Rule A-3's provision permitting a Board
member filling a vacancy to serve for any part of an unexpired term,
the proposed rule change would amend the Articles of Incorporation to
incorporate the relevant language from amended Rule A-3.
The proposed rule change will become operative on October 1, 2020,
at the same time as the recently approved amendments to Rule A-3.\10\
The MSRB will file the Articles of Incorporation with the Commonwealth
of Virginia in accordance with Virginia law.
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\10\ Separately, the MSRB is also filing a proposed rule change
consisting of additional amendments to Rule A-3 and amendments to
MSRB Rule A-4 relating to Board quorum, meeting and voting
requirements which would also become operative on October 1, 2020.
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Statutory Basis
The MSRB believes that the proposed rule change is consistent with
Section 15B(b)(2)(I) of the Exchange Act,\11\ which provides that the
MSRB's rules shall:
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\11\ 15 U.S.C. 78o-4(b)(2)(I).
provide for the operation and administration of the Board, including
the selection
of a Chairman from among the members of the Board, the compensation
of
the members of the Board, and the appointment and compensation of
such
employees, attorneys, and consultants as may be necessary or
appropriate to carry out the Board's functions under this section.
The proposed rule change is consistent with Section 15B(b)(2)(I) of
the Exchange Act \12\ because it provides for the operation and
administration of the Board in that it ensures that applicable
provisions of Rule A-3 are properly reflected in the Articles of
Incorporation. Specifically, the amendments to the Articles of
Incorporation relating to the Board's size, the structure of the
Board's classes, and vacancy terms are consistent with Section
15B(b)(2)(I) of the Exchange Act \13\ because such amendments conform
the Articles of Incorporation to amended Rule A-3, providing for
operational and administrative consistency between the Articles of
Incorporation and amended Rule A-3.
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\12\ Id.
\13\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition
Section 15B(b)(2)(C) of the Exchange Act requires that MSRB rules
not be designed to impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Exchange Act.\14\ The
proposed rule change relates only to the administration of the Board
and would not impose requirements on dealers, municipal advisors or
others. Accordingly, the MSRB does not believe that the proposed rule
change would result in any burden on competition that is not necessary
or appropriate in furtherance of the purposes of the Exchange Act.
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\14\ 15 U.S.C. 78o-4(b)(2)(C).
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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 on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \15\ and paragraph (f) of Rule 19b-4
thereunder.\16\ 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.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f).
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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 email to [email protected]. Please
include File Number SR-MSRB-2020-06 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-2020-06. 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-2020-06 and should be submitted on
or before October 21, 2020.
For the Commission, pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-21556 Filed 9-29-20; 8:45 am]
BILLING CODE 8011-01-P