[Federal Register Volume 75, Number 189 (Thursday, September 30, 2010)]
[Notices]
[Pages 60488-60490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24510]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62993, File No. SR-MSRB-2010-06]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Order Granting Approval of Proposed Rule Change, as Modified by
Amendment No. 1 Thereto, To Establish a Subscription To the Information
Collected by the MSRB's Short-Term Obligation Rate Transparency
(``SHORT'') System
September 24, 2010.
I. Introduction
On August 10, 2010, the Municipal Securities Rulemaking Board
(``MSRB''), filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
[[Page 60489]]
Exchange Act of 1934 (``Exchange Act''),\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to establish a subscription to
the information collected by the MSRB's Short-term Obligation Rate
Transparency (``SHORT'') System. The proposed rule change was published
for comment in the Federal Register on August 23, 2010.\3\ The
Commission received no comment letters about the proposed rule change.
On September 16, 2010, the MSRB filed with the Commission, pursuant to
Section 19(b)(1) of the Exchange Act \4\ and Rule 19b-4 thereunder,\5\
Amendment No. 1 to the proposed rule change.\6\ This order approves the
proposed rule change as modified by Amendment No. 1.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 62734 (August 17,
2010), 75 FR 51864 (the ``original proposed rule change'').
\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
\6\ In Amendment No. 1, the MSRB partially amends the text of
the original proposed rule change to correct a typographical error
in the definition of the data element Liquidity Facility Type. In
all other respects, the original proposed rule change remains as
originally filed. This is a technical amendment and is not subject
to notice and comment.
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II. Description of the Proposed Rule Change, As Modified by Amendment
No. 1 to the Proposed Rule Change
The SHORT System is a facility of the MSRB for the collection and
dissemination of information about securities bearing interest at
short-term rates. Currently, these securities consist of Auction Rate
Securities (``ARS'') and Variable Rate Demand Obligations (``VRDOs'').
The proposed rule change consists of a proposal to establish a
subscription to the information collected by the SHORT System. The data
stream subscription would be provided through a Web service and would
be made available for an annual fee of $10,000.\7\
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\7\ The proposed subscription price would cover a portion of the
administrative, technical and operating costs of the SHORT
subscription service but would not cover all costs of such
subscription service or of the SHORT System. The MSRB has proposed
establishing the subscription price at a commercially reasonable
level.
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Information disseminated from the SHORT System also is posted to
the MSRB's Electronic Municipal Market Access (EMMA) Web portal
pursuant to the EMMA short-term obligation rate transparency service.
Such information would be made available to subscribers simultaneously
with the availability of such information to the EMMA Web portal. The
subscription service would make the information collected by the SHORT
System available to market participants for re-dissemination and for
use in creating value-added products and services. Such re-
dissemination and third-party use would provide market participants,
including investors and the general public, additional avenues for
obtaining the information collected by the SHORT System and would make
additional tools available for making well-informed investment
decisions.
Data elements with respect to the SHORT subscription service that
would be provided through the data stream would be set forth in the
SHORT System Subscriber Manual posted on the MSRB Web site. The SHORT
System Subscriber Manual would provide a complete, up-to-date listing
of all data elements made available through the SHORT subscription
service, including any additions, deletions or modifications to
disseminated data elements, detailed definitions of each data element,
specific data format information, and information about technical data
elements to support transmission and data-integrity processes between
the SHORT System and subscribers.
Subscriptions would be provided through computer-to-computer data
streams utilizing XML files for data. Appropriate schemas and other
technical specifications for accessing the Web services through which
the data stream will be provided would be set forth in the SHORT System
Subscriber Manual posted on the MSRB Web site.
The MSRB would make the SHORT subscription service available on an
equal and non-discriminatory basis. Subscribers would be subject to all
of the terms of the subscription agreement to be entered into between
the MSRB and each subscriber, including proprietary rights of third
parties in information provided by such third parties that is made
available through the subscription. The MSRB would not be responsible
for the content of the information submitted by submitters that is
distributed to subscribers of the SHORT subscription service.
The MSRB has requested that the proposed rule change be made
effective on September 30, 2010.
III. Discussion and Commission Findings
The Commission has carefully considered the proposed rule change
and finds that the proposed rule change is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder applicable to the MSRB \8\ and, in particular, the
requirements of Section 15B(b)(2)(C) of the Exchange Act \9\ and the
rules and regulations thereunder. Section 15B(b)(2)(C) of the Exchange
Act requires, among other things, that the MSRB's rules 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, to remove impediments to and perfect the
mechanism of a free and open market in municipal securities, and, in
general, to protect investors and the public interest.\10\ In
particular, the Commission believes that the SHORT subscription service
would serve as an additional mechanism by which the MSRB works toward
removing impediments to and helping to perfect the mechanisms of a free
and open market in municipal securities. The subscription service would
make the information collected by the SHORT System available to market
participants for re-dissemination and for use in creating value-added
products and services. Such re-dissemination and third-party use would
provide market participants, including investors and the general
public, additional avenues for obtaining the information collected by
the SHORT System and would make additional tools available for making
well-informed investment decisions. Broad access to the information
collected by the SHORT System, in addition to the public access through
the EMMA Web portal, should further assist in preventing fraudulent and
manipulative acts and practices by improving the opportunity for public
investors to access material information about Auction Rate Securities
and Variable Rate Demand Obligations.
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\8\ In approving this proposed rule change, the Commission notes
that it has considered the proposed rule's impact on efficiency,
competition and capital formation. 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78o 4(b)(2)(C).
\10\ Id.
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Furthermore, broader re-dissemination and third-party use of the
information collected by the SHORT System should promote a more fair
and efficient municipal securities market in which transactions are
effected on the basis of material information available to all parties
to such transactions, which should allow for fairer pricing of
transactions based on a more complete understanding of the terms of the
securities (including any changes thereto).
[[Page 60490]]
IV. Conclusion
For the foregoing reasons, the Commission finds that the proposed
rule change, as amended, is consistent with the Exchange Act and the
rules and regulations thereunder applicable to the MSRB and, in
particular, the requirements of Section 15B(b)(2)(C) of the Exchange
Act \11\ and the rules and regulations thereunder. The proposal will
become effective on September 30, 2010, as requested by the MSRB.
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\11\ Id.
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\12\ that the proposed rule change (SR-MSRB-2010-06), as
amended, be, and it hereby is, approved.
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\12\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-24510 Filed 9-29-10; 8:45 am]
BILLING CODE 8010-01-P