[Federal Register Volume 89, Number 152 (Wednesday, August 7, 2024)]
[Notices]
[Pages 64505-64507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17384]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100632; File No. SR-MSRB-2024-06]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change To Amend the MSRB's Real-Time Transaction Reporting System and 
Price Dissemination Information Facility To Retire the Transmission 
Control Protocol Secure Socket Connection

August 1, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on July 30, 2024, the Municipal Securities Rulemaking Board 
(``MSRB'') 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 to amend 
the MSRB's Real-Time Transaction Reporting System and Price 
Dissemination Information Facility (``IF-1'') to consolidate access by 
subscribers to the real-time transaction data residing within the Real-
Time Transaction Reporting System (``RTRS'') through a web service and 
to fully retire the Transmission Control Protocol secure socket 
connection (``TCP secure socket connection'') (the ``proposed rule 
change'').
    The MSRB has filed the proposed rule change under Section 
19(b)(3)(A)(iii) of the Exchange Act \3\ and Rule 19b-4(f)(6) \4\ 
thereunder, as a noncontroversial rule change that renders the proposed 
rule change effective upon filing. The MSRB will announce the operative 
date of the proposed rule change, which would be no earlier than 30 
days following the filing of the proposed rule change with the 
Commission, in a regulatory notice to be published on the MSRB website. 
The operative date will be the earlier of nine months following the 
filing date or the day by which all subscribers are deemed to have 
discontinued the use of the TCP secure socket connection. During the 
period leading to the operative date, the MSRB will no longer permit 
new subscribers to establish new connectivity to RTRS using the TCP 
secure socket connection.
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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 https://msrb.org/2024-SEC-Filings, 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

[[Page 64506]]

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 Rule G-14, on transaction reporting, requires brokers, dealers 
and municipal securities dealers (``dealers''), and associated persons 
to report executed transactions in municipal securities to RTRS, with 
limited exceptions. The MSRB disseminates trade reporting information 
from RTRS to subscribers through certain data subscription feeds.\5\ 
One subscription feed offered by the MSRB is the Real-Time Transaction 
Data Subscription Service (the ``Real-Time Subscription''). Currently, 
subscribers to the Real-Time Subscription may connect to RTRS to obtain 
real-time data through one of two methods: a TCP secure socket 
connection, a broadcast service, referred to in IF-1 as a ``TCP secure 
socket connection'' and referred to by subscribers as the TCP secure 
socket interface, and a secure web Application Programming Interface 
connection, referred to in IF-1 as the ``web service''.\6\
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    \5\ The MSRB also disseminates trade reporting information free 
of charge to the general public through the MSRB's centralized 
Electronic Municipal Market Access (EMMA[supreg]) website. 
EMMA[supreg] is a registered trademark of the MSRB.
    \6\ See IF-1, MSRB Real-Time Transaction Data Subscription 
Service, Access to Real-Time Service and Replay Files.
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    The MSRB has utilized a socket service-based technology since the 
introduction of RTRS in 2005, with the current version consisting of 
the TCP secure socket connection. The MSRB later added the web service 
in 2018 as an additional connectivity option to obtain real time 
transaction data through the Real-Time Subscription.\7\ Since then, the 
TCP secure socket connection has become less reliable than the web 
service, with greater susceptibility for individual subscribers to 
experience sporadic temporary connection problems.\8\ In some cases, 
this can require the intervention of information technology support 
resources from both the MSRB and individual subscribers for 
troubleshooting and resolving such issues when they arise.
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    \7\ See Exchange Act Release No. 83038 (Apr. 12, 2018), 83 FR 
17200 (Apr. 18, 2018), (File No. MSRB-2018-02) available at https://www.msrb.org/sites/default/files/MSRB-2018-02-Fed-Reg.pdf.
    \8\ These connectivity issues are confined to TCP socket service 
subscribers only and are not related to RTRS, EMMA[supreg], or any 
other MSRB system.
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    The MSRB has determined to consolidate access by subscribers to the 
Real-Time Subscription through the web service and to retire the older 
TCP secure socket connection. The purpose of the proposed rule change 
is to amend IF-1 to remove the reference to the TCP secure socket 
connection therein to reflect its retirement. Current subscribers using 
the TCP secure socket connection that wish to continue receiving the 
real-time transaction data subscription would need to migrate to the 
web service. The MSRB expects that, upon migration, these subscribers 
would experience improvements in the consistency and reliability of 
receiving trade data information in real-time.
    The MSRB would announce the operative date of the proposed rule 
change, which would be no earlier than 30 days following the filing of 
the proposed rule change with the Commission, in a regulatory notice to 
be published on the MSRB website. The operative date will be the 
earlier of nine months following the filing date or the day by which 
all subscribers are deemed to have discontinued the use of the TCP 
secure socket connection. The MSRB intends to engage in outreach 
efforts to impacted subscribers to support the transition from the TCP 
secure socket connection to the web service.
    Lastly, the proposed rule change also includes minor language 
changes to improve the readability and technical accuracy of the rule. 
These changes include adding the word ``disseminated'' to better 
describe the mechanics of the Real-Time Subscription, adding the 
article ``a'' to clarify the use of a single connection, and changing 
``connecting with RTRS'' to ``connected to RTRS'' to more accurately 
describe the connection between the web service and RTRS.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2) of the Exchange Act,\9\ which provides that the MSRB 
shall propose and adopt rules to effect the purposes of the Exchange 
Act with respect to, among other matters, transactions in municipal 
securities effected by dealers. Section 15B(b)(2)(C) of the Exchange 
Act \10\ further provides that the MSRB's rules shall 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, municipal entities, obligated persons, and the 
public interest.
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    \9\ 15 U.S.C. 78o-4(b)(2).
    \10\ 15 U.S.C. 78o-4(b)(2)(C).
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    The proposed rule change would improve subscribers' experience 
using the Real-Time Subscription to receive trade data. As noted above, 
the TCP secure socket connection has become less reliable than the web 
service, with greater susceptibility for individual subscribers to 
experience sporadic temporary connection problems and requiring the 
intervention and resources of information technology support resources 
from both the MSRB and individual subscribers for resolving such 
issues. By consolidating subscriber connection to only the web service, 
the MSRB can also streamline technical support for the web service and 
provide an improved user experience for subscribers.\11\ As a result, 
the MSRB believes that subscribers will benefit from a common 
connection with more efficient technical support and faster resolution 
when any issues arise.
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    \11\ Using the web service exclusively would also allow the MSRB 
to perform more efficient maintenance and information technology 
deployments during business hours, thereby enhancing business 
continuity in addition to subscriber experience.
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    These improvements in the resiliency and efficiency of the Real-
Time Subscription will further remove impediments to and perfect the 
mechanism of a free and open market in municipal securities by making 
it more likely that subscribers to the Real-Time Subscription receive 
continuous transaction information. Therefore, the MSRB believes that 
the proposed rule change satisfies the applicable requirements of 
Section 15B(b)(2)(C) of the Exchange Act.\12\
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    \12\ 15 U.S.C. 78o-4(b)(2)(C).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Section 15B(b)(2)(C) of the Exchange Act \13\ 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. The 
MSRB does not believe the proposed rule change to amend IF-1 would 
result in any burden on competition. Therefore, the MSRB does not 
believe the proposed rule change would result in any burden on 
competition that is not

[[Page 64507]]

necessary or appropriate in furtherance of the purposes of the Exchange 
Act. In determining whether these standards have been met, the MSRB is 
guided by the MSRB's Policy on the Use of Economic Analysis in MSRB 
Rulemaking.\14\ The proposed rule change consists of revisions to 
remove language relating to the TCP secure socket connection to obtain 
trade reporting data from RTRS.
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    \13\ Id.
    \14\ See Policy on the Use of Economic Analysis in MSRB 
Rulemaking, available at https://www.msrb.org/Policy-Use-Economic-Analysis-MSRB-Rulemaking. In evaluating whether there was any burden 
on competition that is not necessary or appropriate in furtherance 
of the purposes of the Exchange Act, the MSRB was guided by its 
principles that required the MSRB to consider costs and benefits of 
a rule change, its impact on efficiency, capital formation and 
competition, and the main reasonable alternative regulatory 
approaches. For those rule changes which the MSRB files for 
immediate effectiveness under Section 19(b)(3)(A) of the Exchange 
Act (15 U.S.C. 78s(b)(3)(A)), including information facility rule 
fillings, while not subject to the policy, the MSRB usually focuses 
its examination exclusively on the burden of competition on 
regulated entities, but may also include any additional economic 
analysis that the MSRB believes may inform the rulemaking process 
based on the facts and circumstances.
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    The proposed rule change is of a technical nature. This proposed 
rule change to IF-1 would remove references to the ``TCP secure socket 
connection'' for access to RTRS data to correspond to the MSRB's 
planned retirement of that connection for a subset of subscribers. 
Subscribers presently using the TCP secure socket connection would need 
to convert to web service for messaging with RTRS. However, with the 
introduction of a more modern technology infrastructure, issues for 
individual subscribers using the TCP secure socket connection have 
increased, and MSRB staff has spent time and resources troubleshooting 
problems and restoring connectivity to individual subscribers. The MSRB 
expects that such efforts would need to be continued on a longer-term 
basis so long as the TCP secure socket connection is available. 
Subscribers using the TCP secure socket connection are burdened with 
the higher level of service disruptions and inquiries to MSRB support 
staff as compared to subscribers through the web service.
    By retiring the TCP secure socket connection, the MSRB is expected 
to focus its resources on one method of connection, therefore improving 
the reliability, availability, and supportability of the Real-Time 
Subscription. This in turn will benefit the current TCP secure socket 
connection users with a more reliable connection if they choose to 
continue their Real-Time Subscription and migrate to the web service. 
The MSRB believes the proposed rule change, while requiring some 
initial adjustments by subscribers who currently use the TCP secure 
socket connection to rewrite, or retrofit, their code for the use of 
the web service, would reduce connection problems for subscribers and 
therefore improve market efficiency in the longer term. The proposed 
rule change would not modify the MSRB's administration of RTRS in 
collecting and disseminating information to the EMMA[supreg] website 
publicly for transactions in the municipal securities market. 
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 Exchange Act.\15\
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    \15\ 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

    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 Exchange Act \16\ and 
Rule 19b-4(f)(6) \17\ thereunder. 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 Exchange Act.
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(6).
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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 Exchange Act. Comments may be submitted 
by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-MSRB-2024-06 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-2024-06. 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 (https://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. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to File Number SR-MSRB-2024-06 and should be 
submitted on or before August 28, 2024.

    For the Commission, pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-17384 Filed 8-6-24; 8:45 am]
BILLING CODE 8011-01-P