[Federal Register Volume 76, Number 71 (Wednesday, April 13, 2011)]
[Notices]
[Pages 20783-20784]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8798]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64201, File No. SR-MSRB-2011-04]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Order Granting Approval of Proposed Rule Change To Amend the
MSRB Short-Term Obligation Rate Transparency (SHORT) Subscription
Service
April 6, 2011.
I. Introduction
On February 10, 2011, the Municipal Securities Rulemaking Board
(``MSRB''), filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act''),\1\ and Rule 19b-4
thereunder,\2\ 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
proposed rule change was published for comment in the Federal Register
on March 2, 2011.\3\ The Commission received no comment letters about
the proposed rule change. This order approves the proposed rule change.
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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. 63950 (February 23,
2011), 76 FR 11547 (the ``Commission's Notice'').
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II. Description of the Proposed Rule Change
The Short-term Obligation Rate Transparency (``SHORT'') System is a
[[Page 20784]]
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 \4\ 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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\4\ 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 VDROs, information
about orders submitted for an ARS auction, and additional information
about VRDOs.\5\ 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. A more complete description of
the proposal is contained in the Commission's Notice.
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\5\ See Securities Exchange Act Release No. 62755, August 20,
2010 (File No. SR-MSRB-2010-02).
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The MSRB has requested an effective date for the proposed rule
change of May 16, 2011.
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 \6\ and, in particular, the
requirements of Section 15B(b)(2)(C) of the Exchange Act \7\ and the
rules and regulations thereunder. Section 15B(b)(2)(C) of the Exchange
Act requires, among other things, that the MSRB's rules shall
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\6\ 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).
\7\ 15 U.S.C. 78o-4(b)(2)(C).
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,
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municipal entities, obligated persons, and the public interest.
The Commission believes that the proposed rule change is consistent
with the Exchange Act in that 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.
The Commission further believes that 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).
The proposed rule change will become effective on May 16, 2011, as
requested by the MSRB.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act, that the proposed rule change (SR-MSRB-2011-04), be, and
it hereby is, approved.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8798 Filed 4-12-11; 8:45 am]
BILLING CODE 8011-01-P