
[Federal Register Volume 76, Number 41 (Wednesday, March 2, 2011)]
[Notices]
[Pages 11547-11548]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-4583]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63950; File No. SR-MSRB-2011-04]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing of Proposed Rule Change To Amend the MSRB 
Short-term Obligation Rate Transparency (``SHORT'') Subscription 
Service

February 23, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on February 10, 2011, the Municipal Securities Rulemaking Board 
(``MSRB'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in items I and 
II 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 to 
amend the MSRB's Short-term Obligation Rate Transparency subscription 
service to provide subscribers with additional information as well as 
documents. The MSRB has requested that the proposed rule change be made 
effective on May 16, 2011.
    The text of the proposed rule change is available on the MSRB's Web 
site at http://www.msrb.org/Rules-and-Interpretations/SEC-Filings/2011-Fillings.aspx, 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 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 Purpose of, and Statutory Basis for, 
the Proposed Rule Change

1. Purpose
    The Short-term Obligation Rate Transparency (``SHORT'') System is a 
facility of the MSRB for the collection and dissemination of 
information about securities bearing interest at short-term rates. Rule 
G-34(c), on variable rate security market information, currently 
requires certain dealers to report to the SHORT System interest rates 
and descriptive information about Auction Rate Securities (``ARS'') and 
Variable Rate Demand Obligations (``VRDOs''). All reported information 
is disseminated from the SHORT System to subscribers pursuant to the 
MSRB SHORT subscription service \3\ and is posted to the MSRB's 
Electronic Municipal Market Access (``EMMA'') web portal pursuant to 
the EMMA short-term obligation rate transparency service.
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    \3\ The SHORT subscription service became effective September 
30, 2010. See Securities Exchange Act Release No. 34-62993, 
September 24, 2010 (File No. SR-MSRB-2010-06).
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    On August 20, 2010, the Commission approved changes to Rule G-34(c) 
that will increase the information dealers are required to report to 
the SHORT System. This rule change will add to the SHORT System 
documents that define auction procedures and interest rate setting 
mechanisms for ARS and liquidity facilities for VRDOs, information 
about orders submitted for an ARS auction, and additional information 
about VRDOs.\4\ To provide subscribers with access to these additional 
items of information and documents, the proposed rule change would 
amend the SHORT subscription service to include the additional 
information and documents as well as an ARS ``bid to cover'' ratio that 
would be computed by the SHORT System.
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    \4\ See Securities Exchange Act Release No. 62755, August 20, 
2010 (File No. SR-MSRB-2010-02).
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2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2)(C) of the Exchange Act, which provides that the 
MSRB'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 and 
municipal financial products, to remove impediments to and perfect 
the mechanism of a free and open market in municipal securities and 
municipal financial products, and, in general, to protect investors, 
municipal entities, obligated persons, and the public interest.

    The MSRB believes that the proposed rule change is consistent with 
the Act. The amendments to the SHORT subscription service 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 subscription service would make the 
additional information and documents collected by the SHORT System 
available to market participants for re-dissemination and for use in 
creating value-added products and services. Such re-dissemination and 
third-party use would provide market participants, including investors 
and the general public, additional avenues for obtaining the 
information collected by the SHORT System and would make additional 
tools available for making well-informed investment decisions. Broad 
access to the information and documents collected by the SHORT System, 
in addition to the public access through the EMMA web portal, should 
further assist in preventing fraudulent and manipulative acts and 
practices by improving the opportunity for public investors to access 
material information about Auction Rate Securities and Variable Rate 
Demand Obligations.
    Furthermore, broader re-dissemination and third-party use of the 
information and documents collected by the SHORT System should promote 
a more fair and efficient municipal securities market in which 
transactions are effected on the basis of material information 
available to all parties to such transactions, which should allow for 
fairer pricing of transactions based on a more complete understanding 
of the terms of the securities (including any changes thereto).

[[Page 11548]]

B. Self-Regulatory Organization's Statement on Burden on Competition

    The MSRB does not believe the proposed rule change will impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act. The proposed rule change would make the 
information and documents collected by the SHORT System available to 
all persons on an equal and non-discriminatory basis. The information 
and documents provided through the subscription service would be 
available to all subscribers simultaneously with the availability of 
the information and documents through the EMMA Web portal. In addition 
to making the information and documents available for free on the EMMA 
Web portal to all members of the public, the MSRB would make the 
information and documents collected by the SHORT System available by 
subscription on an equal and non-discriminatory basis without imposing 
restrictions on subscribers from, or imposing additional charges on 
subscribers for, re-disseminating such information and documents or 
otherwise adding value-added services and products based on such 
information and documents on terms determined by each subscriber.\5\
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    \5\ The MSRB notes that subscribers may be subject to 
proprietary rights of third parties in information provided by such 
third parties that is made available through the subscription.
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C. Self-Regulatory Organization's Statement on Comments Received on the 
Proposed Rule Change by Members, Participants, or Others

    Written comments were neither solicited nor received on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate 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 or disapprove 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-2011-04 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-MSRB-2011-04. 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 Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the MSRB. 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-2011-04 and should be 
submitted on or before within March 23, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-4583 Filed 3-1-11; 8:45 am]
BILLING CODE 8011-01-P


