

[Federal Register: April 14, 2006 (Volume 71, Number 72)]
[Notices]               
[Page 19571-19573]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14ap06-107]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53616; File No. SR-MSRB-2006-02]

 
Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing of Proposed Rule Change Relating to Restated 
Articles of Incorporation and By-Laws

April 7, 2006.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 20, 2006, the Municipal Securities Rulemaking Board (``MSRB'' 
or ``Board'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared 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. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The MSRB is filing with the Commission a proposed rule change 
consisting of the MSRB's Restated Articles of Incorporation and By-
Laws. The text of the proposed rule change is available on the MSRB's 
Web site (http://www.msrb.org), at the MSRB's principal office, and at 

the Commission's Public Reference Room.

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

[[Page 19572]]

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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The MSRB is a Virginia nonstock corporation. Currently, MSRB Rule 
A-11 (and By-Law Article 11) contains an indemnification provision for 
Board members and employees. The Board is filing Restated Articles of 
Incorporation to include an expanded indemnification provision and to 
make other technical revisions. New Article 8 will permit the MSRB to 
indemnify directors, officers and employees or any person serving at 
the request of the Board as a director, trustee, officer, employee or 
agent of another corporation or of a partnership, joint venture, trust, 
or other enterprise, including service with respect to an employee 
benefit plan, to the fullest extent authorized under Virginia law. This 
provision also requires the advancement of expenses under certain 
circumstances. This indemnification provision must be included in the 
Articles of Incorporation to be effective. Once the proposed rule 
change is approved and the MSRB files and obtains approval for the 
Restated Articles of Incorporation by the State of Virginia, the MSRB 
will file with the SEC to delete Rule A-11 (and By-Law Article 11), for 
immediate effectiveness.
    The technical revisions to the Articles also include deleting 
reference to the initial directors of the Board, moving language from 
Article 5(c) to 5(a), updating the Board's Registered Agent and 
Registered Office, and clarifying that the limitation on liability of 
officers and directors will be to the fullest extent permitted by 
Virginia law, which prohibits limitation on liability of an officer or 
director if he engaged in willful misconduct or a knowing violation of 
criminal law.
    The MSRB is also filing revisions to its By-Laws. In Article 2, 
Powers of Board, the MSRB is adding that the Board has powers granted 
by Virginia law, as well as by the Act. In addition, the article 
clarifies that no delegation of authority lessens Board power. In 
Article 6, Committees of the Board, the MSRB is clarifying that: (i) No 
Board committees shall have the authority to exercise any power 
specifically required to be exercised by the entire Board under 
Virginia law, as well as under the Act or any Board rule; and (ii) the 
last two sentences refer to any of the Board's committees. The 
revisions to the By-Laws also clarify in Article 14 the 
responsibilities of the Secretary, Treasurer, Assistant Secretary and 
Assistant Treasurer.
    The first 11 By-Laws are Administrative Rules of the MSRB 
previously filed with and approved by the Commission. With this 
proposed rule change, the revisions to Articles 2 and 6 of the By-Laws 
include conforming changes to MSRB Rules A-2 and A-6.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
section 15B(b)(2)(C) of the Act,\3\ which provides that the MSRB's 
rules shall:
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    \3\ 15 U.S.C. 78o-4(b)(2)(C).

    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 
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the public interest.

    The MSRB also believes that the proposed rule change is consistent 
with the requirements of section 15B(b)(2)(I) of the Act,\4\ which 
authorizes the MSRB to adopt rules that provide for the operation and 
administration of the MSRB.
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    \4\ 15 U.S.C. 78o-4(b)(2)(I).
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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 result 
in 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml
); or


     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-MSRB-2006-02 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-MSRB-2006-02. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). 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 such 
filing also will be available for inspection and copying at the MSRB's 
offices. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
MSRB-2006-02 and should be submitted on or before May 5, 2006.


[[Page 19573]]


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-5529 Filed 4-13-06; 8:45 am]

BILLING CODE 8010-01-P
