[Federal Register Volume 86, Number 100 (Wednesday, May 26, 2021)]
[Notices]
[Pages 28416-28418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11084]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91958; File No. SR-MSRB-2021-03]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change Consisting of Amendments to MSRB Rule A-8 and the By-Laws of the 
Municipal Securities Rulemaking Board To Update Descriptions of Board 
Rulemaking Processes and Eliminate Redundant or Obsolete Provisions

May 20, 2021.
    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 May 19, 2021 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 MSRB Rule A-8, relating to rulemaking 
procedures, and parallel amendments to Article 8 of the By-Laws of the 
Municipal Securities Rulemaking Board (``Bylaws''), which reproduces 
MSRB Rule A-8 (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) of 
the Act \3\ and Rule 19b-4(f)(3) thereunder,\4\ which renders the 
proposal effective upon filing with the Commission. As described below, 
the proposed rule change would update descriptions of Board rulemaking 
processes and eliminate redundant or obsolete provisions.
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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/2021-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
    MSRB rulemaking is governed by Section 19 of the Exchange Act \5\ 
and Rule 19b-4 thereunder, which describe the processes self-regulatory 
organizations must follow to file proposed rule changes with the 
Commission. MSRB Rule A-8 reflects, and to some extent incorporates, 
these requirements and includes provisions that describe Board 
processes for complying with them. The proposed rule change is intended 
to update these provisions and reduce unnecessary complexity, as 
follows.
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    \5\ 15 U.S.C. 78s.
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Eliminating Unnecessary Descriptions of Statutory Requirements
    Section (a) of MSRB Rule A-8 notes the statutory requirements with 
which the Board must comply when it adopts rules and also restates the 
statutory authority granted to the Board in Section 15B(b) of the 
Exchange Act.\6\ While referencing the Board's statutory authority in 
section (a) is useful to provide context for what follows, the more 
detailed description adds unnecessary length and complexity. The 
proposed rule change streamlines the section by deleting the detailed 
description but does not change the substance of the rule. The proposed 
rule change further improves the readability of section (a) by moving 
the sentence describing who must sign rule filings--a separate topic--
into a new section (b).
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    \6\ 15 U.S.C. 78o-4(b).
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Removing Outdated or Obsolete References
    Current section (b) of MSRB Rule A-8 (section (c) in the proposed 
rule change) notes that the Board may ``render or cause to be rendered 
advisory opinions and interpretations of rules of the Board at the 
request of any interested person.'' \7\ The proposed rule change 
removes the reference to ``advisory opinions,'' a term that the Board 
once used, but no longer uses, to describe certain interpretations. 
Removing this reference would eliminate the potential for confusion 
about the meaning of the term without limiting the kinds of 
interpretive and other materials relating to rulemaking that the Board 
may issue.\8\
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    \7\ The Board is currently engaged in a retrospective review of 
the catalogue of interpretive guidance in its rule book. The multi-
year initiative is intended to streamline and modernize the rule 
book by clarifying, amending and/or retiring guidance that no longer 
achieves its intended purposes. See MSRB Notice 2021-02 (February 
11, 2021).
    \8\ Depending on its substance, an interpretation may be deemed 
to be a proposed rule change pursuant to Exchange Act Rule 19b-4, in 
which case it must be filed with the Commission.
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    In addition, because the Board may interpret its rules on its own 
initiative, in addition to upon request, the proposed rule change 
removes the reference to ``the request of any interested person.'' 
Finally, the proposed rule change replaces the words ``render'' and 
``rendered'' in the first sentence with ``issue'' and ``issued'' and 
revises the second sentence to say that interpretations shall ``be 
consistent with,'' rather than ``represent,'' the Board's intent in 
adopting the rules being interpreted. The Board believes that the new 
phrasing is clearer.
    Current section (c) of MSRB Rule A-8 provides that the Board may 
approve procedures relating to the administration of MSRB rules 
pursuant to MSRB Rule A-4(d), which describes requirements for taking 
Board action without a meeting. Current Rule A-8(c) also provides that 
such procedures can take effect no earlier than 10 business days after 
publication and that regulated entities are subject to these procedures 
in the same manner as they are subject to the rules of the Board.
    Adopted at a time when the Board's rules required the Board to 
approve changes to Board rules at a meeting of the Board (rather than 
through action without a meeting), Rule A-8(c) permitted the Board to 
approve minor changes to an MSRB form, for example, without a meeting. 
Because the Board's

[[Page 28417]]

rules have for some time allowed it to take any permissible action, 
including actions relating to rulemaking, without a meeting,\9\ this 
section is obsolete and the proposed rule change deletes it.
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    \9\ MSRB Rule A-4(d) provides that action by the Board may be 
taken without a meeting by unanimous written consent. As the Board 
noted when it last amended MSRB Rule A-4(d), ``[t]he Board takes 
action without a meeting infrequently, generally when a matter 
requires prompt attention in between scheduled meetings and 
circumstances preclude convening a special meeting.'' Exchange Act 
Release No. 89998 (September 25, 2020); 85 FR 62001, 62002 (October 
1, 2020); File No. SR-MSRB 2020-05.
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Better Reflecting Current Transparency Practices
    Section (d) of MSRB Rule A-8 directs the Board to establish 
procedures to provide ``access by all interested persons to rules of 
the Board and other official Board action.'' As required by Exchange 
Act Rule 19b-4(m)(1),\10\ the Board posts and maintains a complete 
version of its rules on its website available for the public to access. 
The proposed rule change amends section (d) to mirror that requirement 
and current practice.
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    \10\ 17 CFR 240.19b-4(m)(1).
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Bylaws
    Article 8 of the Bylaws reproduces MSRB Rule A-8. Accordingly, the 
proposed rule change amends the Bylaws to mirror amended MSRB Rule A-8.
2. Statutory Basis
    The MSRB has adopted the proposed rule change pursuant to Section 
15B(b)(2) \11\ and 15B(b)(2)(I) \12\ of the Exchange Act.
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    \11\ 15 U.S.C. 78o-4(b)(2).
    \12\ 15 U.S.C. 78o-4(b)(2)(I).
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    Section 15B(b)(2) 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.

    Section 15B(b)(2)(I) of the Exchange Act provides that MSRB rules 
shall ``provide for the operation and administration of the Board. . . 
.''
Statutory Basis for Proposed Amendments To Eliminate Unnecessary 
Descriptions of Statutory Requirements
    The proposed amendment to MSRB Rule A-8(a) that deletes the 
detailed description of the Board's statutory authority is consistent 
with Section 15B(b)(2) of the Exchange Act, which grants that 
authority. As amended, MSRB Rule A-8(a) will continue to state, as 
Section 15B(b)(2) does, that the Board shall propose and adopt rules to 
effect the purposes of the Exchange Act. Because the Board remains 
subject to the detailed description of the Board's statutory authority 
in Section 15B(b)(2) of the Exchange Act, it is unnecessary, and 
potentially confusing, to duplicate or restate that description in the 
rule.
    In addition, both the proposed amendment to MSRB Rule A-8(a) that 
deletes the detailed description of the Board's statutory authority and 
the amendment to MSRB Rule A-8(a) that moves the last sentence into a 
new subsection are consistent with Section 15B(b)(2)(I) of the Exchange 
Act because they provide for the operation and administration of the 
Board. MSRB Rule A-8 is an administrative rule that describes the 
Board's processes for carrying out its statutory rulemaking 
responsibilities. Improving the readability of the rule should enhance 
the transparency of those processes.
Statutory Basis for Proposed Amendments That Remove Outdated or 
Obsolete References
    The proposed amendments to current section (b) (section (c) in the 
proposed rule change) of MSRB Rule A-8 that update the description of 
the Board's process for interpreting its rules are consistent with 
Section 15B(b)(2)(I) of the Exchange Act because they provide for the 
operation and administration of the Board. These amendments should 
improve transparency about Board processes by aligning the rule more 
closely to the Board's current practices.
    The proposed amendment to delete current section (c) of MSRB Rule 
A-8 is also consistent with Section 15B(b)(2)(I) of the Exchange Act 
for the same reason. While section (c) provided for the operation and 
administration of the Board because it provided a Board process for the 
Board to approve certain procedures, that process is now obsolete. 
Deleting it from the rule should improve transparency and reduce the 
potential for confusion about the administrative processes the Board 
follows to take action related to rulemaking.
Statutory Basis for Proposed Amendments To Better Reflect Current 
Transparency Practices
    The proposed amendments to section (d) of MSRB Rule A-8 are 
consistent with Section 15B(b)(2)(I) of the Exchange Act because they 
provide for the operation and administration of the Board. 
Specifically, these amendments update the description of how the Board 
provides access to its rules. Updating that description to more closely 
align with current practice and the requirements of Exchange Act Rule 
19b-4(m)(1) should enhance clarity about Board processes.
Statutory Basis for Proposed Amendments to Bylaws
    The proposed amendments to the Bylaws are consistent with Section 
15B(b)(2)(I) of the Exchange Act because they provide for the operation 
and administration of the Board. Specifically, the proposed amendments 
ensure that the Bylaws reflect, and are consistent with, the change to 
MSRB Rule A-8.

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.\13\ The 
proposed rule change relates only to the administration of the Board 
and would not impose or alter 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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    \13\ 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 \14\ and paragraph (f) of Rule 19b-4 
thereunder.\15\ 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

[[Page 28418]]

investors, or otherwise in furtherance of the purposes of the Act.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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-2021-03 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-2021-03. 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-2021-03 and should be submitted on 
or before June 16, 2021.

    For the Commission, pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11084 Filed 5-25-21; 8:45 am]
BILLING CODE 8011-01-P