
[Federal Register Volume 74, Number 102 (Friday, May 29, 2009)]
[Notices]
[Pages 25778-25779]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12441]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59964, File No. SR-MSRB-2009-03]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Granting Approval of Proposed Rule Change Relating to the 
Establishment of a Pilot Phase of Its Upcoming Continuing Disclosure 
Service of the Electronic Municipal Market Access System (EMMA[supreg])

May 21, 2009.
    On March 25, 2009, the Municipal Securities Rulemaking Board 
(``MSRB''), filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC''), 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 to establish a pilot phase (the 
``continuing disclosure pilot'') of the continuing disclosure service 
of the MSRB's Electronic Municipal Market Access system (``EMMA''). The 
proposed rule change was published for comment in the Federal Register 
on April 6, 2009.\3\ The Commission received one comment

[[Page 25779]]

letter about the proposed rule change.\4\ On May 8, 2009 and May 18, 
2009, the MSRB filed responses to the comment letters.\5\ This order 
approves the proposed rule change.
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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. 59643 (Mar. 27, 
2009), 74 FR 15530 (Apr. 6, 2009) (``Commission's Notice'').
    \4\ See letter from Douglas Adamson, Executive Vice President, 
Technical Services Division, American Bankers Association (``ABA''), 
dated April 24, 2009.
    \5\ See letters from Ernesto A. Lanza, General Counsel, MSRB, to 
Elizabeth M. Murphy, Secretary, SEC, dated May 8, 2009 (``Response 
Letter I'') and May 18, 2009 (``Response Letter II'').
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    The proposed rule change would establish the continuing disclosure 
pilot of the continuing disclosure service of the MSRB's EMMA system. 
The continuing disclosure pilot would receive electronic submissions 
of, and would make publicly available on the Internet, continuing 
disclosure documents and related information voluntarily submitted by 
issuers, obligated persons and their agents. The MSRB originally 
requested approval of the continuing disclosure pilot to commence 
operation on May 11, 2009, or such later date as may be announced by 
the MSRB in a notice published on the MSRB Web site, which date shall 
be no later than 30 days after Commission approval of the proposed rule 
change. In addition, the MSRB requested approval of the continuing 
disclosure pilot for a period ending on July 1, 2009.\6\ The MSRB has 
now requested approval of this proposed rule change by no later than 
May 22, 2009, so that the MSRB may commence operation of the pilot 
continuing disclosure service on June 1, 2009.\7\ A full description of 
the proposal is contained in the Commission's Notice.
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    \6\ The Commission has previously approved the establishment of 
the continuing disclosure service of EMMA, which will commence 
operation on July 1, 2009. See Securities Exchange Act Release No. 
59061 (December 5, 2008), 73 FR 75778 (December 12, 2008) (File No. 
SR-MSRB-2008-05) (approving the continuing disclosure service of 
EMMA with an effective date of July 1, 2009). The EMMA continuing 
disclosure service is designed to commence operation simultaneously 
with the effectiveness of certain amendments to Exchange Act Rule 
15c2-12 adopted by the Commission. See Securities Exchange Act 
Release No. 59062 (December 5, 2008), 73 FR 76104 (December 15, 
2008) (adopting amendments to Exchange Act Rule 15c2-12).
    \7\ See Response Letter II, supra note 5.
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    As previously noted, the Commission received one comment letter 
relating to the proposed rule change.\8\ The ABA expressed concerns 
regarding certain legal issues relating to the protection of its 
intellectual property and contractual rights in the CUSIP database (the 
``Database'') that it states have not yet been resolved. The ABA noted 
that it was the owner of the Database, which is administered by the 
CUSIP Service Bureau (``CSB''), as its exclusive licensee, and believed 
it was critical that these legal issues be resolved before the MSRB be 
allowed to move forward with the proposed expansion and full 
implementation of EMMA. It further requested that the operation of the 
EMMA Web site incorporate a variety of protections with respect to its 
intellectual property rights, including compliance with CSB's current 
licensing practices, permissible use guidelines, appropriate copyright 
notices and adequate security.\9\
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    \8\ See supra note 4.
    \9\ See letter from the ABA, supra note 4.
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    In response to the ABA's concerns, the MSRB and the CSB, as the 
ABA's exclusive licensee, have entered into a memorandum of 
understanding dated May 15, 2009 (the ``MOU'') in which CSB expressly 
permits use of the CUSIP database for purposes, among other things, of 
displaying information on the MSRB's EMMA public Web portal and for 
inclusion in data disseminated by the MSRB to subscribers of the EMMA 
data feed. The MSRB has agreed in the MOU to provide certain safeguards 
with respect to the ABA's intellectual property and contractual rights 
of the ABA in the CUSIP database.\10\ The Commission believes that the 
MSRB has taken sufficient action to ensure that all necessary 
arrangements will be in place in order to operate the continuing 
disclosure pilot as anticipated by the implementation date.
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    \10\ See Response Letter II, supra note 5. The MSRB stated that 
this agreement would expand and reposition existing language on the 
EMMA Web site to ensure that users of the EMMA Web site have a 
fuller understanding of the sources of information displayed on the 
EMMA Web site and of the proprietary rights of third parties 
(including but not limited to the proprietary rights of the ABA in 
the Database) in certain displayed data elements. Such language 
would advise users of the limitations on their use or re-use of any 
proprietary information accessed on the EMMA Web site, and users 
would be required to acknowledge such limitations before being 
provided access to any portion of the Database. Additional systemic 
and reporting mechanisms would be implemented to further protect 
against inappropriate use of the Database. See Response Letter I, 
supra note 5.
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    The Commission has carefully considered the proposed rule change, 
the comment letter received, and the MSRB's responses to the comment 
letter and finds that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to the MSRB \11\ and, in particular, the requirements of 
Section 15B(b)(2)(C) of the Act \12\ 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.\13\ In particular, the 
Commission finds that the proposed rule change is consistent with the 
Act because the EMMA continuing disclosure service, including the pilot 
phase thereof, would serve as an additional mechanism by which the MSRB 
works toward removing impediments to and helping to perfect the 
mechanisms of a free and open market in municipal securities. The pilot 
phase would be an important transitional step toward ensuring the 
effective and efficient operation of the permanent EMMA continuing 
disclosure service upon launch on July 1, 2009.
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    \11\ 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).
    \12\ 15 U.S.C. 78o-4(b)(2)(C).
    \13\ Id.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the proposed rule change (SR-MSRB-2009-03), be, and it 
hereby is, approved.
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    \14\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-12441 Filed 5-28-09; 8:45 am]
BILLING CODE 8010-01-P


