[Federal Register Volume 61, Number 134 (Thursday, July 11, 1996)]
[Notices]
[Pages 36594-36595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17666]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37397; File No. SR-MSRB-96-03]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to the Confirmation, Clearance, and Settlement of
Transactions with Customers and Calculations for Confirmation Display
July 2, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
\1\ (``Act''), notice is hereby given that on May 29, 1996, the
Municipal Securities Rulemaking Board (``MSRB'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which Items have
been prepared primarily by the MSRB. 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. Sec. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The MSRB proposes to amend MSRB rule G-15 regarding confirmation,
clearance, and settlement of transactions with customers, and MSRB rule
G-33 regarding calculations for confirmation display.
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 MSRB 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 MSRB has prepared summaries, set forth in sections
(A), (B), and (C) below, of the most significant aspects of such
statements.\2\
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\2\ The Commission modified the text of the summaries prepared
by the MSRB.
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(A) Self-Regulatory Organization's Statement of the Purpose of and
Statutory Basis for, the Proposed Rule Change
Recently, the MSRB amended rule G-15(a) regarding customer
confirmations to clarify the customer confirmation requirements and to
revise certain requirements regarding disclosure.\3\ To clarify certain
provisions of the rule, a limited set of technical amendments became
effective February 26, 1996.\4\
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\3\ For a complete description of the rule change, refer to
Securities Exchange Act Release No. 35953 (July 11, 1995), 60 FR
36843 [File No. SR-MSRB-95-04] (order approving proposed rule change
by the MSRB relating to customer confirmations).
\4\ Securities Exchange Act Release No. 36596 (December 15,
1995), 60 FR 66571 [File No. SR-MSRB-95-18] (notice of filing and
immediate effectiveness of proposed rule change relating to customer
confirmations).
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The MSRB has identified a need for two additional technical
amendments to clarify certain provisions of the rule. First, revised
rule G-15(a)(i)(C)(2)(a) requires dealers to disclose on the
confirmation the date and price of the next pricing call.\5\ The
provision also requires dealers to print a legend on the confirmation
regarding additional call features if there are any call features in
addition to the first pricing call. The MSRB's proposal changes the
reference from the ``first pricing call'' to the ``next pricing call''
to maintain consistency of terms and to avoid confusion. Since a
municipal security traded in the secondary market may be traded after
the first pricing call, the term next pricing call more clearly
identifies the call to be disclosed on the confirmation.
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\5\ MSRB rule G-15 defines pricing call as a call feature that
represents an ``in-whole call'' (i.e., a call of the entire issue)
that may be used by the issuer without restriction in a refunding.
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The second proposed technical amendment concerns the requirement in
rule G-15(a)(i)(D)(1) to provide a three-part disclosure statement for
zero coupon bonds. The rule currently states that the confirmation for
zero coupon bonds shall include a statement that there are no periodic
payments and that the bond is callable below maturity value without
notice by mail to the holder unless registered. The proposed rule
change makes clear that the last part of the disclosure statement
regarding call provisions for bearer bonds is necessary on confirmation
only if the bonds are both callable and available in bearer form.
The proposed rule change also updates references to revised rule G-
15(a) that are contained in rule G-15(c) regarding deliveries to
customers and that are contained in rule G-33
[[Page 36595]]
regarding certain calculations for confirmation display.\6\
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\6\ The specific changes being made to the MSRB's rules are set
forth in the MSRB's proposed rule change, which is available through
the MSRB or the Commission's Public Reference Room.
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The MSRB has adopted the proposed rule change pursuant to Section
15B(b)(2)(C) of the Act,\7\ which requires that the MSRB's rules 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.
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\7\ 15 U.S.C. Sec. 780-(b)(2)(C) (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
The MSRB 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 Statements 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)(iii) \8\ of the Act and pursuant to Rule 19b-4(e)(6) \9\
promulgated thereunder because the proposed rule change (i) does not
significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
(iii) was provided to the Commission for its review at least five days
prior to the filing date; and (iv) does not become operative for thirty
days from the date of its filing on May 29, 1996. The Commission
believes that the proposed rule change does not significantly affect
the protection of investors or the public interest and does not impose
any significant burden on competition because it makes technical and
clarifying changes to an existing MSRB rule. At any time within sixty
days of the filing of such 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.
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\8\ 15 U.S.C. Sec. 78s(b)(3)(A)(iii) (1988).
\9\ 17 CFR 240.19b-4(e)(6) (1995).
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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, 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. Sec. 552, will be available for inspection and copying in
the Commission's Public Reference Room, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filing will also be available
for inspection and copying at the principal office of the MSRB. All
submissions should refer to File No. SR-MSRB-96-03 and should be
submitted by August 1, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12) (1995).
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Jonathan G. Katz,
Secretary.
[FR Doc. 96-17666 Filed 7-10-96; 8:45 am]
BILLING CODE 8010-01-M
