[Federal Register Volume 76, Number 46 (Wednesday, March 9, 2011)]
[Notices]
[Pages 13005-13007]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-5279]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64022; File No. SR-MSRB-2011-02]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of Rule Change
Consisting of Amendments to MSRB Rule A-3, on Membership on the Board
March 3, 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 18, 2011, the Municipal Securities Rulemaking Board
(``Board'' or ``MSRB'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
the MSRB. The MSRB has filed the proposal as a ``non-controversial''
rule change pursuant to Section 19(b)(3)(A)(iii),\3\ and Rule 19b-
4(f)(6) 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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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 SEC a proposed rule change consisting
of amendments to MSRB Rule A-3, on membership on the Board.
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-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
[[Page 13006]]
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 Board 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 make changes to MSRB
Rule A-3(i) as are necessary and appropriate to retain a 21 member
Board of Directors, including 11 public members and 10 regulated
representatives, consistent with current MSRB transitional Rule A-3(i)
and the requirements of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111-203, 124 Stat. 1376 (2010) (the ``Dodd-
Frank Act'').\5\ Transitional Rule A-3(i), adopted on September 30,
2010 to comply with the Board composition requirements of Section 975
of the Dodd-Frank Act, established a two-year transition period for
achieving a permanent Board structure under the new composition
requirements of the Dodd-Frank Act and envisioned a series of further
amendments to the rule during the transition period in furtherance
thereof. The transitional period commenced on October 1, 2010 and
concludes on September 30, 2012. The proposed rule change consists of
amendments to MSRB Rule A-3(i) to provide for a three-year term for the
class of five Board members--two public and three representing MSRB
regulated entities--who will commence service on October 1, 2011. The
amendments to Rule A-3(i) provide that the next class of Board members
will consist of two public members and three members representing any
category of regulated entity, including broker-dealers, bank dealers,
and municipal advisors. The rule change further provides that the new
class of five members of the Board of Directors will serve a three-year
term.
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\5\ See Exchange Act Release No. 63025 (Sep. 30, 2010), 75 FR
61806 (Oct. 6, 2010).
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The rule would state explicitly that five new members would be
elected to the Board of Directors, although implicit in the rule, since
five Board members are retiring as of September 30, 2010, and the MSRB
must maintain a Board of Directors of 21 members during the
transitional period. Further, the rule would state explicitly that two
of the five new members would be public directors and three would be
representative of MSRB regulated entities. While also implicit in Rule
A-3(i), the rule change would make clear that the three industry
positions may be filled by representatives of broker-dealers, bank
dealers or municipal advisors, since the retiring industry members are
representative of broker-dealers or bank dealers. Finally, the rule
change would provide that the new class of five directors would have a
three-year term. While the directors have historically served three-
year terms, the most recent Board class, elected at the start of the
transitional period, was elected for a two-year term.
Thus, this proposed rule change is intended to establish a three-
year term for the five new Board members who will commence service on
October 1, 2011, consistent with Section 15B(b)(1) of the Securities
Exchange Act of 1934 and prior Board practice. The proposed rule change
would amend MSRB Rule A-3(i) in order to provide for the election of a
new five member class for a three-year term commencing on October 1,
2011. Of the five new members, two would be members of the public and
three would be regulated representatives who are representative of and
associated with brokers, dealers, municipal securities dealers or
municipal advisors.
2. Statutory Basis
The MSRB has adopted the proposed rule change pursuant to Section
15B(b)(2)(B) \6\ of the Act, which provides that the MSRB's rules
shall:
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\6\ 15 U.S.C. 78o-4(b)(2)(B)
establish fair procedures for the nomination and election of members
of the Board and assure fair representation in such nominations and
elections of public representatives, broker dealer representatives,
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bank representatives, and advisor representatives.
The MSRB believes that the proposed rule change is consistent with
the Act, as amended by the Dodd-Frank Act, in that it would provide for
the maintenance of a 21 member Board with a majority of public members
and have fair representation of broker-dealers, bank dealers, and
municipal advisors, consistent with MSRB Rule A-3(i) as approved by the
SEC.
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 is solely concerned with the
administration of the MSRB and, in any event, provides for fair
representation on the Board of public representatives, broker dealer
representatives, bank dealer representatives and municipal advisor
representatives.
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 MSRB represented that the proposed rule change qualifies for
immediate effectiveness pursuant to Section 19(b)(3)(A)(iii) of the Act
\7\ because it: (i) Does not significantly affect the protection of
investors or the public interest; (ii) does not impose any significant
burden on competition; and (iii) does not become operative for 30 days
after filing or such shorter time as the Commission may designate
consistent with the protection of investors and the public interest.\8\
The MSRB provided the required written notice of its intention to file
the proposed rule change to the Commission on February 10, 2011, and
the proposed rule change will become operative on April 1, 2011, which
is more than 30 days after the filing of the proposed rule change.
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ In addition, Rule 19b-4(f)(6)(iii) requires a self-
regulatory organization to give the Commission written notice of its
intent to file the proposed rule change at least five business days
prior to the date of filing of the proposed rule change, or such
shorter time as designated by the Commission.
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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.\9\
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\9\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
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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 Act. Comments may be submitted by any of
the following methods:
[[Page 13007]]
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-2011-02 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-2011-02. 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 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
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the MSRB's offices. 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-2011-02 and should be submitted on
or before March 30, 2011.
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\10\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-5279 Filed 3-8-11; 8:45 am]
BILLING CODE 8011-01-P