
[Federal Register: May 7, 2008 (Volume 73, Number 89)]
[Notices]               
[Page 25815-25816]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07my08-142]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57750, File No. SR-MSRB-2007-08]

 
Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Granting Approval of Proposed Rule Change as Modified by 
Amendment No. 1 Thereto Relating to Rule G-8, Books and Records, Rule 
G-9, Preservation of Records, and Rule G-34, CUSIP Numbers and New 
Issue Requirements, To Improve Transaction Reporting of New Issues

May 1, 2008.
    On November 27, 2007, the Municipal Securities Rulemaking Board 
(``MSRB''), filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change consisting of an amendment of its Rule G-8, Books 
and Records, Rule G-9, Preservation of Records, and Rule G-34, CUSIP 
Numbers and New Issue Requirements. The proposed rule change was 
published for comment in the Federal Register on January 17, 2008.\3\ 
The Commission received two comment letters about the proposed rule 
change.\4\ The MSRB also forwarded to the Commission a comment letter 
about the proposed rule change received by the MSRB.\5\ On April 22, 
2008, the MSRB filed Amendment No. 1 to the proposed rule change.\6\ 
This order approves the proposed rule change as modified by Amendment 
No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57131 (January 11, 
2008), 73 FR 3295 (January 17, 2008) (``Commission's Notice'').
    \4\ See letter from Leslie M. Norwood, Managing Director and 
Associate General Counsel, Securities Industry and Financial Markets 
Association (``SIFMA''), dated March 28, 2008, and letter from Mary 
Lee Corrigan, Executive Vice President & Chief Financial Officer and 
Janis C. Brennan, Vice President & Operations Manager, Griffin, 
Kubik, Stephens & Thompson, Inc. (``GKST''), dated April 3, 2008.
    \5\ See letter from Michael Decker and Michael Nicholas, Co-
Chief Executive Officers, Regional Bond Dealers Association 
(``RBDA''), dated April 1, 2008.
    \6\ In Amendment No. 1, the MSRB responded to the three comment 
letters and, in response to the comment letters, postponed the 
effective date of the proposed rule change from June 30, 2008 to 
September 30, 2008. This is a technical amendment and is not subject 
to notice and comment.
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    The proposed rule change is designed to improve transaction 
reporting of new issues and would accelerate the timing for CUSIP 
number assignment and, with the exception of new issues of short-term 
instruments with less than nine months in effective maturity, require

[[Page 25816]]

underwriters to: (i) Submit certain information about a new issue of 
municipal securities to Depository Trust and Clearing Corporation's New 
Issue Information Dissemination System (``NIIDS'') within set 
timeframes; and (ii) set and disseminate a ``Time of First Execution'' 
that allows time for market participants to access necessary 
information in preparation for trade reporting prior to beginning trade 
executions in the issue. A full description of the proposal is 
contained in the Commission's Notice.
    SIFMA stated in its comment letter that it fully supports increased 
price transparency in the municipal marketplace and strongly supports 
the development of the Depository Trust and Clearing Corporation's New 
Issue Information Dissemination System. However, SIFMA recommended that 
the proposal not be effective on June 30, 2008 because firms have not 
had sufficient time to review and test the system and because current 
unexpected market issues and issuance volume related to auction-rate 
securities have significantly increased the time demands on the 
operations staff at the various firms. GKST also supported increased 
price transparency and the proposal but believed that if the Depository 
Trust and Clearing Corporation cannot fix the problems that have 
already been identified, the cost of complying with the proposed 
directive will be a severe burden to all firms but relatively more so 
to smaller firms. The RBDA also supported the development and 
implementation of the New Issue Information Dissemination System as a 
way to enhance the overall level of transparency in the municipal 
market, but did not believe the June 30 deadline offered the market 
enough time to fully test and implement the system. All three 
commentators suggested postponing the originally-proposed June 30, 2008 
implementation date.
    In Amendment No. 1, the MSRB postponed the effective date of the 
proposed rule change from June 30, 2008 to September 30, 2008. The MSRB 
believes that the new effective date will address commentators concerns 
and will allow for the additional time necessary for implementation of 
NIIDS.
    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 MSRB \7\ and, in particular, the 
requirements of Section 15B(b)(2)(C) of the Act \8\ and the rules and 
regulations thereunder. Section 15B(b)(2)(C) of the Act requires, among 
other things, 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.\9\ In particular, the 
Commission finds that the proposed rule change is consistent with the 
Act because it will allow the municipal securities industry to produce 
more accurate trade reporting and transparency. The proposal will be 
effective on September 30, 2008, as requested by the MSRB.
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    \7\ In approving this proposed rule change, the commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition and capital formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78o-4(b)(2)(C).
    \9\ Id.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-MSRB-2007-08), as modified 
by Amendment No. 1, be, and it hereby is, approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Florence E. Harmon,
Deputy Secretary.
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    \11\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-10024 Filed 5-6-08; 8:45 am]

BILLING CODE 8010-01-P
