[Federal Register Volume 60, Number 51 (Thursday, March 16, 1995)]
[Notices]
[Pages 14313-14314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6444]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35467; File No. SR-MSRB-95-1]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the Municipal
Securities Rulemaking Board Relating to an Extension of the CDI Pilot
System from April 6, 1995 Through December 31, 1995
March 10, 1995.
On March 7, 1995, 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-95-1), 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 Commission is
publishing this notice to solicit comments on the proposed rule change
from interested people. The Board has requested accelerated approval of
the proposed rule change in order to permit the Pilot system to
continue to operate without interruption.
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Board is filing herewith a proposed rule change to request an
extension, from April 6, 1995, through December 31, 1995, of its
Continuing Disclosure Information (``CDI'') Pilot system of the
Municipal Securities Information Library (MSIL) system.\1\
\1\The MUNICIPAL SECURITIES INFORMATION LIBRARY system and the
MSIL system are trademarks of the Board. The MSIL system, which was
approved in Securities Exchange Act Release No. 29298 (June 13,
1991) 56 FR 28194, is a central facility through which information
about municipal securities is collected, stored and disseminated.
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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 6, 1992, the SEC approved the CDI Pilot system for an
18-month period.\2\ The CDI Pilot system began operating on January 23,
1993, and functions as part of the Board's MSIL system. The CDI Pilot
system accepts and disseminates voluntary submissions of official
disclosure notices relating to outstanding issues of municipal
securities, i.e., continuing disclosure information. During its first
phase of operation, the system accepted disclosure notices only from
trustees. On May 17, 1993, the Pilot system also began accepting
notices from issuers.\3\ On September 1, 1993, the Commission approved
an 18-month extension of the Pilot system, which extension will expire
on April 6, 1995.\4\
\2\Securities Exchange Act Release No. 30556 (April 6, 1992), 57
FR 12534. A complete description of the CDI system is contained in
File No. SR-MSRB-90-4, Amendment No. 1.
\3\On May 17, 1993, the Board reported to the Commission on the
initial phase of operation of the CDI system regarding technical,
policy and cost issues and proposed enhancements to the system.
\4\Securities Exchange Act Release No. 32825 (September 1,
1993), 58 FR 47306.
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On November 10, 1994, the Commission approved amendments to its
Rule 15c2-12 which prohibit a dealer from underwriting a new issue of
municipal securities unless the issuer commits, among other things, to
provide material events notices to the Board's CDI Pilot system or to
all Nationally Recognized Municipal Securities Information Repositories
(``NRMSIRs'') and to the applicable state information depository.\5\ In
addition, the Rule prohibits a dealer from recommending the purchase or
sale of a municipal security unless the dealer has in place procedures
that provide reasonable assurance that it will receive prompt notice of
material events.\6\ The Board is considering certain changes to the CDI
Pilot system consistent with the new Commission requirements, including
reconsideration of certain issuer and trustee enrollment procedures and
page limits on submissions.
\5\Securities Exchange Act Release No. 34961 (November 10,
1994), 59 FR 59590. This provision of the Rule will become effective
on July 3, 1995.
\6\The effective date of this provision of the Rule is January
1, 1996.
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The Board believes that an extension of the operation of the CDI
Pilot system will give it sufficient time to determine the system
changes needed, in consultation with the Commission as well as
potential users of the system, including NRMSIRs. We anticipate filing
system changes well before the December 31, 1995, extension date. At
that time, the Board also plans to ask the Commission for permanent
approval of the revised CDI system.
(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.
The MSIL system is designed to increase the integrity and
efficiency of the municipal securities market by, among other things,
helping to ensure that the price charged for an issue in the secondary
market reflects all available official information about that issue.
The Board will continue to operate the output of the CDI Pilot system
to ensure that the information is available to any party who wishes to
subscribe to the service. As with all MSIL system services, this
service is available, on equal terms, to any party requesting the
service.
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.
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 requested that the Commission find good cause,
pursuant to Section 19(b)(2) of the Act, for approving the proposed
rule change prior to the thirtieth day after [[Page 14314]] publication
of the notice of filing in the Federal Register. The Board believes
that such accelerated approval would permit the Pilot system to
continue to operate without interruption. The Board further believes
that the CDI Pilot system will increase the integrity and efficiency of
the municipal securities market by helping to ensure that the price
charged for an issue in the secondary market reflects all available
official information about that issue.
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, N.W., Washington, D.C. 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. SR-MSRB-95-1 and should be
submitted by April 6, 1995.
V. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to the Board, and, in particular, the
requirements of Section 15B and the rules and regulations thereunder.
The Commission finds good cause for approving the proposed rule
change prior to the thirtieth day after the date of publication of the
notice of filing in the Federal Register, in that accelerated approval
is appropriate to provide for uninterrupted operation of the CDI
system.
It Is Therefore ordered, pursuant to Section 19(b)(2) of the
Act,\7\ that the proposed rule change be, and hereby is, approved for
an additional 8-month period ending on December 31, 1995.
\7\15 U.S.C. 78s(b)(2).
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For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\8\
\8\17 U.S.C. 200.30-3(a)(12)
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-6444 Filed 3-15-95; 8:45 am]
BILLING CODE 8010-01-M
