[Federal Register Volume 76, Number 41 (Wednesday, March 2, 2011)]
[Notices]
[Pages 11547-11548]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4583]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63950; File No. SR-MSRB-2011-04]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing of Proposed Rule Change To Amend the MSRB
Short-term Obligation Rate Transparency (``SHORT'') Subscription
Service
February 23, 2011.
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 February 10, 2011, the Municipal Securities Rulemaking Board
(``MSRB'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in items I and
II 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 is filing with the Commission a proposed rule change to
amend the MSRB's Short-term Obligation Rate Transparency subscription
service to provide subscribers with additional information as well as
documents. The MSRB has requested that the proposed rule change be made
effective on May 16, 2011.
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/2011-Fillings.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 Purpose of, and Statutory Basis for,
the Proposed Rule Change
1. Purpose
The Short-term Obligation Rate Transparency (``SHORT'') System is a
facility of the MSRB for the collection and dissemination of
information about securities bearing interest at short-term rates. Rule
G-34(c), on variable rate security market information, currently
requires certain dealers to report to the SHORT System interest rates
and descriptive information about Auction Rate Securities (``ARS'') and
Variable Rate Demand Obligations (``VRDOs''). All reported information
is disseminated from the SHORT System to subscribers pursuant to the
MSRB SHORT subscription service \3\ and is posted to the MSRB's
Electronic Municipal Market Access (``EMMA'') web portal pursuant to
the EMMA short-term obligation rate transparency service.
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\3\ The SHORT subscription service became effective September
30, 2010. See Securities Exchange Act Release No. 34-62993,
September 24, 2010 (File No. SR-MSRB-2010-06).
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On August 20, 2010, the Commission approved changes to Rule G-34(c)
that will increase the information dealers are required to report to
the SHORT System. This rule change will add to the SHORT System
documents that define auction procedures and interest rate setting
mechanisms for ARS and liquidity facilities for VRDOs, information
about orders submitted for an ARS auction, and additional information
about VRDOs.\4\ To provide subscribers with access to these additional
items of information and documents, the proposed rule change would
amend the SHORT subscription service to include the additional
information and documents as well as an ARS ``bid to cover'' ratio that
would be computed by the SHORT System.
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\4\ See Securities Exchange Act Release No. 62755, August 20,
2010 (File No. SR-MSRB-2010-02).
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2. Statutory Basis
The MSRB believes that the proposed rule change is consistent with
Section 15B(b)(2)(C) of the Exchange Act, which 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.
The MSRB believes that the proposed rule change is consistent with
the Act. The amendments to 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
additional information and documents 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 and documents 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.
Furthermore, broader re-dissemination and third-party use of the
information and documents 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 11548]]
B. Self-Regulatory Organization's Statement on Burden on Competition
The MSRB does not believe the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act. The proposed rule change would make the
information and documents collected by the SHORT System available to
all persons on an equal and non-discriminatory basis. The information
and documents provided through the subscription service would be
available to all subscribers simultaneously with the availability of
the information and documents through the EMMA Web portal. In addition
to making the information and documents available for free on the EMMA
Web portal to all members of the public, the MSRB would make the
information and documents collected by the SHORT System available by
subscription on an equal and non-discriminatory basis without imposing
restrictions on subscribers from, or imposing additional charges on
subscribers for, re-disseminating such information and documents or
otherwise adding value-added services and products based on such
information and documents on terms determined by each subscriber.\5\
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\5\ The MSRB notes that subscribers may be subject to
proprietary rights of third parties in information provided by such
third parties that is made available through the subscription.
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C. Self-Regulatory Organization's Statement on Comments Received on the
Proposed Rule Change by 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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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-2011-04 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-MSRB-2011-04. 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-2011-04 and should be
submitted on or before within March 23, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-4583 Filed 3-1-11; 8:45 am]
BILLING CODE 8011-01-P