[Federal Register Volume 59, Number 248 (Wednesday, December 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31885]
[Federal Register: December 28, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35128; File No. SR-MSRB-94-16]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Municipal Securities
Rulemaking Board Relating to Interpretation of Rule G-37 on Political
Contributions and Prohibitions on Municipal Securities Business
December 20, 1994.
On December 6, 1994, the Municipal Securities Rulemaking Board
(``Board'' or ``MSRB'') filed with the Securities and Exchange
Commission (``Commission'' or ``SEC'') a proposed rule change (File No.
SR-MSRB-94-16), pursuant to Section 19(b)(1) of the Securities Exchange
Act of 1934 (``Act''), 15 U.S.C. 78s(b)(1), and Rule 19b-4 thereunder.
The proposed rule change is described in Items I, II, and III below,
which Items have been prepared by the Board. The Board has designated
this proposal as constituting a stated policy, practice, or
interpretation with respect to the meaning, administration, or
enforcement of an existing rule of the Board under Section 19(b)(3)(A)
of the Act, which renders the proposal effective upon receipt of this
filing by the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Board is filing herewith a notice of interpretation concerning
rule G-37 on political contributions and prohibitions on municipal
securities business.
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 Board 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 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
(a) On April 7, 1994, the Commission approved Board rule G-37,
concerning political contributions and prohibitions on municipal
securities business.\1\ Since that time, the Board has received
numerous inquiries concerning the application of the rule. In order to
assist the municipal securities industry and, in particular, brokers,
dealers and municipal securities dealers in understanding and complying
with the provisions of the rule, the Board published two prior notices
of interpretation which set forth, in question-and-answer format,
general guidance on rule G-37.\2\ In prior filings with the Commission,
the Board stated that it will continue to monitor the application of
rule G-37, and, from to time, will publish additional notices of
interpretations, as necessary.\3\ In light of questions recently
received from market participants concerning certain provisions of the
rule, the Board has determined that it is necessary to provide further
guidance to the municipal industry. Accordingly, the Board is
publishing this third set of questions and answers which focus on those
provisions of the rule relating to solicitation of municipal securities
business and the proscription of indirect activities that may result in
violations of the rule.
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\1\Securities Exchange Act Release No. 33868 (April 7, 1994), 59
FR 17621. The rule applies to contributions made on and after April
25, 1994.
\2\See Securities Exchange Act Release No. 34161 (June 6, 1994),
59 FR 30379; Securities Exchange Act Release 34603 (August 25,
1994), 59 FR 45049; see also MSRB Reports Vol. 14, No. 3 at 11-16
(June 1994) and Vol. 14, No. 4 at 31-32 (August 1994).
\3\File No.'s SR-MSRB-94-6 and 94-15.
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(b) The Board believes that the proposed rule change is consistent
with Section 15B(b)(2)(C) of the Act which provides that the Board'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, 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.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Board 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 brokers, dealers, and municipal securities dealers.
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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and subparagraph (e) of Rule 19b-4 under the Act
because the rule change constitutes an interpretation with respect to
the meaning, administration, or enforcement of an existing rule of the
MSRB. At any time within 60 days of the filing of a rule change, the
Commission may summarily abrogate the 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.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.
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 inspection and copying in the
Commission's Public Reference Room. Copies of such filing will also be
available for inspection and copying at the principal office of the
MSRB. All submissions should refer to the file number in the caption
above and should be submitted by January 17, 1995.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-31885 Filed 12-27-94; 8:45 am]
BILLING CODE 8010-01-M
