[Federal Register Volume 59, Number 92 (Friday, May 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11699]
[[Page Unknown]]
[Federal Register: May 13, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34027; File No. SR-MSRB-94-4]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the Municipal
Securities Rulemaking Board Relating to Procedures for Submitting
Information on Political Contributions Pursuant to Rule G-37
May 9, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on April
22, 1994, the Municipal Securities Rulemaking Board (``Board'' or
``MSRB'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The purpose of the proposed rule change is to provide
procedures for submitting information on political contributions
pursuant to rule G-37. The Board has requested accelerated approval of
the proposed rule change in order to allow for the timely submission
of, and public access to, information concerning political
contributions. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons. The
Commission also finds good cause for granting accelerated approval of
the proposed rule change.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Board is filing a proposed rule change to establish procedures
relating to the submission of information to the Board pursuant to 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 self-regulatory organization 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
On April 7, 1994, the Commission approved Board rule G-37 on
political contributions and prohibitions on municipal securities
business.\1\ Rule G-37(e)(ii) provides that reports on contributions
made and municipal securities business engaged in during the reporting
period must be submitted to the Board on Form G-37, in accordance with
Board rule G-37 filing procedures, quarterly, with due dates determined
by the Board. In its rule G-37 filing, the Board noted that it was
developing appropriate rule G-37 filing procedures to allow for public
access to the information to be submitted on Form G-37.\2\ The current
proposed rule change establishes procedures for brokers, dealers and
municipal securities dealers for filing with the Board information
relating to political contributions as required by rule G-37.\3\ The
proposal also establishes procedures for filing voluntary information
relating to political contributions.\4\
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\1\Securities Exchange Act Release No. 33868 (April 7, 1994), 59
FR 17621 (April 13, 1994). Rule G-37 became effective April 25,
1994.
\2\See Securities Exchange Act Release No. 33482 (January 14,
1994), 59 FR 3389.
\3\In order to assist dealers in complying with rule G-37 filing
requirements, the Board intends to develop an informal ``Procedures
Manual'' which will contain the relevant forms and procedures.
\4\Brokers, dealers, municipal securities dealers, or others may
voluntarily submit to the Board additional information relating to
political contributions provided that such information is submitted
in accordance with Board rule G-37 filing procedures.
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The proposal requires dealers to file two copies of Form G-37, and
to submit such forms within thirty (30) calendar days after the end of
each calendar quarter. These dates correspond to January 31, April 30,
July 31, and October 31. The Board will maintain one copy of each Form
G-37 off-site for back-up purposes, and will maintain the second copy
of each Form G-37 at its Public Access Facility (``PAF'') in Virginia,
where it will be available to the public for review and
photocopying.\5\ The Board also will maintain a database of reports
filed by each dealer (as well as any other party voluntarily submitting
information on political contributions), so that any member of the
public may telephone the Board's offices to inquire whether a
particular dealer (or other party) has submitted a report pursuant to
rule G-37.\6\ To further enhance public access to this information, the
Board will provide a list of companies that offer document retrieval
and mailing services. As the Board gains experience with rule G-37
submission procedures, and as the informational needs of the municipal
market change with regard to political contributions, the Board will
seek to expand the access and services available to the public.
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\5\The Board will charge 20 cents per page plus sales tax, if
applicable, for photocopying. This is the same pricing structure
currently used for photocopying official statements and advance
refunding documents at the PAF.
\6\In addition to the dealer's name, the information available
through the database will include, among other things, the quarterly
period covered by the report and summary information on political
contributions. Although rule G-37 requires dealers to report certain
summary information concerning contributions, it does not require
disclosure of the names of individual municipal finance
professionals or executive officer contributors.
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While the rule G-37 procedures will result in many dealers filing
forms at or about the same time, the Board believes that it can
adequately process this information in a timely manner. However, if
such processing becomes unduly burdensome for the Board, then it may
consider staggering dealer submission due dates in the future. In
addition, if the number of voluntary submissions substantially
increases the Board's costs of processing this information, then it may
consider charging a filing fee to cover some of the expenses associated
with certain of this voluntarily submitted information. Finally, the
Board, in the future, may review the necessity for, and propriety of,
charging an access fee for the forms filed, if any, pursuant to rule G-
37.
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 will apply equally to
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 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 publication of the notice
of filing in the Federal Register. The Board believes that accelerated
approval is necessary to facilitate timely submission of, and public
access to, information concerning political contributions by allowing
dealers to comply with these requirements by the first reporting
deadline of July 31, 1994.
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, with Section
15B(b)(2)(C) and (G) of the Act.\7\ Section 15B(b)(2)(C) authorizes the
MSRB to adopt rules 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 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. Section 15B(b)(2)(G) authorizes the MSRB to adopt rules that
prescribe the records to be made and kept by municipal securities
dealers and the periods for which such records shall be preserved.
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\7\Sections 15B(b)(2)(C), (G); [15 U.S.C. Secs. 78o-4(b)(2)(C),
(G)].
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The proposal establishes appropriate due dates and procedures for
filing with the Board information concerning political contributions
required by rule G-37(e)(ii). The Commission also 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.
Accelerated approval is appropriate to facilitate the timely submission
of, and public access to, information concerning political
contributions by allowing dealers to comply with the reporting
requirements, pursuant to rule G-37, by the first reporting deadline of
July 31, 1994.
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 relations 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 principal
office of the Board. All submissions should refer to File No. SR-MSRB-
94-4 and should be submitted by June 3, 1994.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\8\ that the proposed rule change be, and hereby is, approved.
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\8\15 U.S.C. 78s(b)(2).
For the Commission by the Division of Market Regulation,
pursuant to delegated authority, 17 U.S.C. 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-11699 Filed 5-12-94; 8:45 am]
BILLING CODE 8010-01-M
