[Federal Register Volume 75, Number 222 (Thursday, November 18, 2010)]
[Notices]
[Pages 70759-70760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29080]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63313; File No. SR-MSRB-2010-14]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of Amendments to
Rule A-12, on Initial Fee, and Rule A-14, on Annual Fee
November 12, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 9, 2010, the Municipal Securities Rulemaking Board
(``Board'' or ``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 MSRB has designated the proposed rule change as changing a fee
applicable to municipal advisors pursuant to Section 19(b)(3)(A)(ii) of
the Act,\3\ and Rule 19b-4(f)(2) 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)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The MSRB is filing a proposed rule change consisting of amendments
to Rule A-12, on initial fee, and Rule A-14, on annual fee, to provide
for the payment to the Board by municipal advisors of initial and
annual fees. The proposed rule change is effective immediately upon
filing.
The proposed rule change would apply to municipal advisors
immediately; however, it will have a deferred compliance date of
December 31, 2010. The text of the proposed rule change is available on
the MSRB's Web site at http://www.msrb.org/Rules-and-Interpretations/SEC-Filings/2010-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
The purpose of the proposed rule change is to provide for the
assessment of reasonable fees to defray a portion of the increased
costs and expenses associated with the operation and administration of
the Board attributable to the Board's regulation of municipal advisors,
including an initial fee of $100 and an annual fee of $500. Except as
described below, the proposed rule change applies the provisions of
Rules A-12 and A-14 to municipal advisor firms in the same manner that
they currently apply to brokers, dealers, and municipal securities
dealers (``dealers''). Individuals will not be required to pay these
fees unless they are sole proprietorships. Although the initial fee
under Rule A-12 normally would be payable to the Board prior to a
municipal advisor engaging in any municipal advisory activities, the
proposed rule change would permit a municipal advisor firm to engage in
such activities prior to January 1, 2011 so long as the initial fee is
paid by January 1, 2011. Similarly, although the annual fee under Rule
A-14 normally would be payable by October 31 of each fiscal year (or,
for municipal advisor firms becoming subject to MSRB rules in the
current fiscal year, simultaneously with the initial fee under Rule A-
12), the proposed rule change would permit a municipal advisor firm to
engage in such activities prior to January 1, 2011 so long as the
annual fee for the current fiscal year of the Board is paid by January
1, 2011. Each firm subject to the rules of the Board shall be required
to pay the initial fee only once, and the annual fee only once each
fiscal year, even if a firm is both a dealer and a municipal advisor.
2. Statutory Basis
The MSRB believes that the proposed rule change is consistent with
Section 15B(b)(2)(J) of the Act, which provides that the Board's rules
shall:
Provide that each municipal securities broker, municipal
securities dealer, and municipal advisor shall pay to the Board such
reasonable fees and charges as may be necessary or appropriate to
defray the costs and expenses of operating and administering the
Board.
The $100 initial fee imposed on municipal advisors by amended Rule
A-12 and the $500 annual fee imposed on municipal advisors by amended
Rule A-14 are reasonable. In its filing, the MSRB noted that the annual
fee is comparable to the fees that municipal advisors must pay to State
regulators if they must register as investment advisers. The initial
fee is less than most States impose for the initial registration of
investment advisers. The revenue resulting from these fees will defray
only a small portion of the cost of MSRB regulation of municipal
advisors.
[[Page 70760]]
Section 15B(2)(L) of the Act requires that rules adopted by the
Board
not impose a regulatory burden on small municipal advisors that
is not necessary or appropriate in the public interest and for the
protection of investors, municipal entities, and obligated persons,
provided that there is robust protection of investors against fraud.
The proposed rule change does not impose a regulatory burden on
small advisors that is not necessary or appropriate in the public
interest and for the protection of investors, municipal entities, and
obligated persons and for the robust protection of investors against
fraud. The MSRB stated that it considers the $100 initial fee and $500
annual fee to be de minimis. The annual fee is comparable to the fees
that municipal advisors must pay to State regulators if they must
register as investment advisers. The initial fee is less than most
States impose for the initial registration of investment advisers. The
MSRB stated that, while the proposed rule change, at best, imposes only
a de minimis burden on municipal advisors, the proposed rule change is
necessary to help defray the costs of the MSRB's registration of
municipal advisors, which in turn permits the MSRB to have a record of
the municipal advisors it regulates, so that it may keep them abreast
of regulatory developments, better target its rulemaking and
professional qualifications examinations to different types of
municipal advisors, and identify to the Commission those municipal
advisors who have reportedly violated MSRB rules.
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 not necessary or appropriate in furtherance
of the purposes of the Act, since it would apply equally to all
municipal advisors.
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 proposed rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \5\ and Rule 19b-4(f)(2) \6\ thereunder, in
that it establishes fees applicable to municipal advisors. 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.\7\
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78s(b)(3)(A)(ii).
\6\ 17 CFR 240.19b-4(f)(2).
\7\ 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-2010-14 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-MSRB-2010-14. 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 Web site 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
a.m. and 3 p.m. 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-2010-14 and should be
submitted on or before December 9, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-29080 Filed 11-17-10; 8:45 am]
BILLING CODE 8011-01-P