[Federal Register Volume 62, Number 108 (Thursday, June 5, 1997)]
[Notices]
[Pages 30919-30920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14620]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38694; File No. SR-MSRB-97-3]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Municipal Securities
Rulemaking Board Relating to Fee for Backlog Document Collection of its
Official Statement/Advance Refunding Document Subsystem of the
Municipal Securities Information Library
May 29, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 20, 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-97-3). 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
establishing or changing a due, fee or other charge under Section
19(b)(3)(A) of the Act,\2\ 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\ 15 U.S.C. 78s(b)(3)(A).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The MSRB is filing herewith a proposed rule change to establish a
fee relating to the operation of its Official Statement/Advance
Refunding Document (``OS/ARD'') subsystem of the Municipal Securities
Information Library (``MSIL'') system.\3\ The
Board is establishing a price of $7,000 (plus delivery or postage
charges) for its 1996 document collection of official statements and
refunding documents, sold as a ``backlog'' collection.
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\3\ Municipal Securities Information Library and MSIL are
registered trademarks of the Board. The MSIL system, which was
approved in Securities Exchange Act Release No. 29298 (June 13,
1991), 56 FR 28194 (June 19, 1991), 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
texts of these statements may be examined at the places specified in
Item IV below. The Board has prepared summaries, set forth in Section
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
The OS/ARD subsystem, which was activated on April 20, 1992, is a
central electronic facility through which information that is collected
and stored pursuant to MSRB rule G-36 is made available electronically
and in paper form to market participants and information vendors.\4\
The annual subscription fee for daily tapes of images of current year
documents from the OS/ARD system currently is $14,000.\5\ The fees for
backlog collections are substantially less than fees for an annual
subscription because an annual subscription requires the Board to send
a computer tape to the subscriber each business day, but a backlog day,
but a backlog collection requires fewer tapes.\6\ The Board is
establishing a price of $7,000 (plus delivery or postage charges) for
the 1996 backlog collection.
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\4\ Rule G-36 requires underwriters to provide copies of final
official statements and advance refunding documents within certain
specified time frames for most new issues issued since January 1,
1990.
\5\ This fee was filed with the Commission. Securities Exchange
Act Release No. 37361 (June 25, 1996), 61 FR 34463 (July 2, 1996).
\6\ Currently, several business day's worth of documents are on
each tape in an annual collection. The backlog fee plus delivery
costs for 1995 is $9,000; 1994 is $7,000; 1993 is $9,000; 1992 is
$7,000; 1991 is $8,000; 1990 is $6,000. These fees were filed with
the Commission. Securities Exchange Act Release No. 37361 (June 25,
1996), 61 FR 34463 (July 2, 1996) (1996 and 1995 fees); Securities
Exchange Act Release No. 35848 (June 14, 1995), 60 FR 32187 (June
20, 1995) (1994 fee); Securities Exchange Act Release No. 32482
(June 16, 1993), 58 FR 34115 (June 23, 1993) (1992 and 1990 fees);
Securities Exchange Act Release No. 34602 (Aug. 25, 1994), 59 FR
45319 (Sept. 1, 1994) (1993 and 1991 fees). The fees for the backlog
collections vary based on the number of documents received and
processed in any given year.
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In its prior filings with the Commission, the Board stated that it
intends to use its general revenues to help fund collecting, indexing
and storing the OS/ARD subsystem's
[[Page 30920]]
documents. However, the Board stated its intention that the costs of
producing and disseminating magnetic tapes (and paper copies) would be
completely covered by user fees.\7\ The Board is establishing the 1996
backlog collection fee to defray its cost of disseminating the
collection tapes. This is consistent with the Commission's policy that
self-regulatory organizations' fees be based on expenses incurred in
providing information to the public.
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\7\ Securities Exchange Act Release No. 28197 (July 12, 1990),
55 FR 29436 (July 19, 1990).
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The Board believes the proposed rule change is consistent with
Section 15B(b)(2)(C) of the Act, which requires, in pertinent part,
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 Board believes that employing cost-based prices is in the pubic
interest since it will ensure that a complete collection of vital
information will be available, at fair and reasonable prices, for the
life of the municipal securities. 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 believes that the 1996 backlog
fee is fair and reasonable in light of the costs associated with
disseminating the information, and that the services provided by the
MSIL system are available on reasonable and nondiscriminatory terms to
any interested person.
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 designated this proposed rule change as establishing
or changing a dues, fee or other charge under Section 19(b)(3)(A) of
the Act,\8\ which renders the proposed rule change effective on May 20,
1997, the date of receipt of this filing by the Commission.
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\8\ 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 it if
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 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-97-3 and should be
submitted by June 26, 1997.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-14620 Filed 6-5-97; 8:45 am]
BILLING CODE 8010-01-M
