[Federal Register Volume 73, Number 168 (Thursday, August 28, 2008)]
[Notices]
[Pages 50850-50852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19944]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58406; File No. SR-MSRB-2008-06]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to Revisions to the Series 51 Examination Program
August 21, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 18, 2008, the Municipal Securities Rulemaking Board (``MSRB''
or ``Board''), filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') the proposed rule change as described in
Items I, II and III below, which Items have been prepared by the MSRB.
The MSRB has designated the proposed rule change as constituting a
stated policy, practice, or interpretation with respect to the meaning,
administration, or enforcement of an existing rule of the self-
regulatory organization pursuant to Section 19(b)(3)(A)(i) of the
Act,\3\ and Rule 19b-4(f)(1) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(i).
\4\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The MSRB is filing with the Commission revisions to the study
outline and selection specifications for the Municipal Fund Securities
Limited Principal Qualification Examination (Series 51) program.\5\ The
proposed revisions consolidate certain job responsibilities (such as
the recordkeeping functions) and regroup others in order to allow more
detailed testing of particular rule requirements.
[[Page 50851]]
The MSRB is not proposing any textual changes to its rules.
---------------------------------------------------------------------------
\5\ The MSRB is also proposing corresponding revisions to the
Series 51 question bank, but based upon instructions from the
Commission staff, the MSRB is submitting SR-MSRB-2008-06 for
immediate effectiveness pursuant to Section 19(b)(3)(A)(i) of the
Act and Rule 19b-4(f)(1) thereunder, and is not filing the question
bank for Commission review. See letter to Diane G. Klinke, General
Counsel, MSRB, from Belinda Blaine, Associate Director, Division of
Market Regulation, SEC, dated July 24, 2000. The question bank is
available for Commission review.
---------------------------------------------------------------------------
The revised study outline is available on the MSRB's Web site
(http://www.msrb.org), 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
Section 15B(b)(2)(A) of the Act \6\ authorizes the MSRB to
prescribe standards of training, experience, competence, and such other
qualifications as the Board finds necessary or appropriate in the
public interest or for the protection of investors. The MSRB has
developed examinations that are designed to establish that persons
associated with brokers, dealers and municipal securities dealers that
effect transactions in municipal securities have attained specified
levels of competence and knowledge. The MSRB periodically reviews the
content of the examinations to determine whether revisions are
necessary or appropriate in view of changes pertaining to the subject
matter covered by the examinations.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78o-4(b)(2)(A).
---------------------------------------------------------------------------
MSRB Rule G-3(b)(iv) states that the municipal fund securities
limited principal has responsibility to oversee the municipal
securities activities of a securities firm or bank dealer solely as
such activities relate to transactions in municipal fund securities. In
this capacity, the municipal fund securities limited principal manages,
directs or supervises one or more of the following activities relating
to municipal fund securities: underwriting, trading or selling
municipal fund securities; rendering financial advisory or consultant
services to issuers of municipal fund securities; research or
investment advice, or communications with customers, about any of the
activities named heretofore; maintaining records on activities in
municipal fund securities; processing, clearing, and (in the case of
securities firms) safekeeping of municipal fund securities; and
training of principals and representatives.\7\ The only examination
that qualifies a municipal fund securities limited principal is the
Municipal Fund Securities Limited Principal Qualification Examination.
---------------------------------------------------------------------------
\7\ A municipal securities principal (Series 53) is also
qualified to supervise these responsibilities.
---------------------------------------------------------------------------
A committee of industry members and MSRB staff (the Series 51
Committee) recently undertook a review of the Series 51 examination
program. As a result of this review, the MSRB is proposing to make
revisions to the study outline to consolidate certain job
responsibilities (such as the recordkeeping functions) and regroup
others in order to allow more detailed testing of particular rule
requirements. In addition, the detail on some existing topics is being
expanded to include specific cites to rules that had been amended since
the last update of the outline. The revised examination continues to
cover areas of knowledge required for effective supervision of
municipal fund securities activities. A summary of the changes to the
content outline for the Series 51 Examination, detailed by major topic
heading, is provided below.
Part Three--General Supervision
The topic ``Restrictions on apprentices'' was moved to
this major heading from the major heading Sales Supervision (Part Five)
to be grouped with the qualification requirements for apprentices.
A reference to ``Supervisory Controls'' under Rule G-27
was added.
Technical changes to rule citations were made to reflect
amendments to Rule G-27.
Part Five--Sales Supervision
Reference to ``Restrictions on apprentices'' was moved to
Part Three to be grouped with the qualification requirements for
apprentices.
Technical changes to rule citations were made to reflect
amendments to Rule G-27.
``Records of agency transactions'' was moved to Part Seven
to be grouped with similar requirements for the maintenance of books
and records.
The topic ``Books and records maintained by transfer
agents'' was moved to Part Seven to be grouped with similar
requirements for the maintenance of books and records.
Part Six--Underwriting and Disclosure Obligations
The sub-heading ``Obligations of Municipal Underwriters
under SEC Rules'' was changed to ``Obligations of Municipal
Underwriters'' in order to include relevant MSRB rules under the sub-
heading.
Part Seven--Operations
The topic ``Records of agency transactions'' was moved
under this major heading from Part Five to be grouped with similar
requirements for the maintenance of books and records.
The topic ``Books and records maintained by transfer
agents'' was moved under this major heading from Part Five to be
grouped with similar topics on the maintenance of books and records.
The MSRB is proposing similar changes to the Series 51 selection
specifications and question bank. The examination will continue to
consist of 60 multiple choice-questions assigned to the seven areas of
the examination as shown below. The percentages given for each section
are rounded to an even number.
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
Regulatory Structure......................................... 5
Product Knowledge............................................ 27
General Supervision.......................................... 17
Fair Practice and Conflicts of Interest...................... 17
Sales Supervision............................................ 18
Underwriting and Disclosure Obligations...................... 6
Operations................................................... 10
------------------------------------------------------------------------
Candidates will continue to be allowed one and one-half hours for
each testing session. Each question will continue to count one point,
and each candidate must correctly answer 70 percent of the questions in
order to receive a passing grade.
A candidate for the Series 51 must also pass the General Securities
Principal Examination (Series 24) or the Investment Company Products/
Variable Contracts Limited Principal Examination (Series 26). The
Series 51 Committee considered subject matter that would be covered in
either of these examinations when developing the specifications for the
Series 51 Examination.
2. Statutory Basis
The MSRB believes that the proposed revisions to the Series 51
examination program are consistent with the provisions of Section
15B(b)(2)(A) of the
[[Page 50852]]
Act,\8\ which authorizes the MSRB to prescribe standards of training,
experience, competence, and such other qualifications as the Board
finds necessary or appropriate in the public interest or for the
protection of investors. Section 15B(b)(2)(A) of the Act also provides
that the Board may appropriately classify municipal securities brokers
and municipal securities dealers and their associated personnel and
require persons in any such class to pass tests prescribed by the
Board.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78o-4(b)(2)(A).
---------------------------------------------------------------------------
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, as amended.
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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change has become effective pursuant to Section
19(b)(3)(A)(i) of the Act \9\ and Rule 19b-4(f)(1) thereunder,\10\ in
that the proposed rule change constitutes a stated policy, practice, or
interpretation with respect to the meaning, administration, or
enforcement of an existing rule of the self-regulatory organization.
The MSRB proposes to implement the revised Series 51 examination
program on November 1, 2008. At any time within 60 days of the filing
of the proposed rule change, the Commission may summarily abrogate 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.\11\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(3)(A)(i).
\10\ 17 CFR 240.19b-4(f)(1).
\11\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------
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-2008-06 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-MSRB-2008-06. 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 Internet 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 inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
am and 3 pm. Copies of such filing also will be available for
inspection and copying at the principal office of the MSRB. 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-2008-06 and should be
submitted on or before September 18, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-19944 Filed 8-27-08; 8:45 am]
BILLING CODE 8010-01-P