[Federal Register Volume 62, Number 47 (Tuesday, March 11, 1997)]
[Notices]
[Pages 11235-11236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5981]
[[Page 11235]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38365; File No. SR-MSRB-97-2]
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
March 5, 1997.
On February 21, 1997, 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-97-2), pursuant to Section 19(b)(1) of the Securities Exchange
Act of 1934 (``Act'') \1\ and Rule 19b-4 \2\ 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 proposed rule change 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.
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\1\ 15 U.S.C. 78s(b)(1) (1988).
\2\ 17 CFR 240.19b-4 (1991).
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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 (hereafter referred to as ``the proposed rule
change'').
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
texts 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 rule G-37, concerning
political contributions and prohibitions on municipal securities
business.\3\ 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 has published prior notices of
interpretation which set forth general guidance on rule G-37.\4\ In
prior filings with the Commission, the Board stated that it will
continue to monitor the application of rule G-37 and, from time to
time, will publish additional notices of interpretations, as
necessary.\5\ In light of questions recently received from market
participants concerning the activities a dealer may engage in with an
issuer while subject to a prohibition on municipal securities business
with that issuer, the Board has determined that it is necessary to
provide further guidance to the municipal securities industry.
Accordingly, the Board is publishing this notice of interpretation.
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\3\ Securities Exchange Act Release No. 33868 (April 7, 1994),
59 FR 17621 (April 13, 1994). The rule applies to contributions made
on and after April 25, 1994.
\4\ See MSRB Reports, Vol. 14, No. 3 (June 1994) at 11-16; Vol.
14; No. 4 (August 1994) at 27-31; Vol. 14, No. 5 (December 1994) at
8; Vol. 15, No. 1 (April 1995) at 21; Vol. 15, No. 2 (July 1995) at
3-4; Vol. 16, No. 1 (January 1996) at 31; and Vol. 16, No. 3
(September 1996) at 35-36. See also CCH Manual paragraph 3681.
\5\ Securities Exchange Act Release No. 34161 (June 6, 1994), 59
FR 30379 (June 13, 1994) [File No. SR-MSRB-94-6]; Securities
Exchange Act Release No. 34603 (August 25, 1994), 59 FR 45049 (Aug.
31, 1994) corrected Securities Exchange Act Release No. 34603 (Aug.
25, 1994), 59 FR 46479 (Sept. 8,. 1994) [File No. SR-MSRB-94-15].
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(b) The Board believes 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 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,\6\ which renders the proposed rule
change effective on February 21, 1997, the date of receipt of this
filing by the Commission.
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\6\ 15 U.S.C. 78s(b)(3)(A).
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At any time within sixty days of the filing of the proposed rule
change, the Commission may summarily abrogate 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.
IV. Solicitation of Comments
Interested people are invited to submit written data, views, and
arguments concerning the foregoing. People 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 the filing will also be
available for inspection and copying at the Board's principal offices.
All submissions should refer to File No.
[[Page 11236]]
SR-MSRB-97-2 and should be submitted by April 1, 1997.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-5981 Filed 3-10-97; 8:45 am]
BILLING CODE 8010-01-M
