
[Federal Register Volume 76, Number 46 (Wednesday, March 9, 2011)]
[Notices]
[Pages 13005-13007]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-5279]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64022; File No. SR-MSRB-2011-02]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of Rule Change 
Consisting of Amendments to MSRB Rule A-3, on Membership on the Board

March 3, 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 18, 2011, the Municipal Securities Rulemaking Board 
(``Board'' or ``MSRB'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been prepared by 
the MSRB. The MSRB has filed the proposal as a ``non-controversial'' 
rule change pursuant to Section 19(b)(3)(A)(iii),\3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders the proposal effective upon filing 
with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 SEC a proposed rule change consisting 
of amendments to MSRB Rule A-3, on membership on the Board.
    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-Filings.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

[[Page 13006]]

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 Board 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 purpose of the proposed rule change is to make changes to MSRB 
Rule A-3(i) as are necessary and appropriate to retain a 21 member 
Board of Directors, including 11 public members and 10 regulated 
representatives, consistent with current MSRB transitional Rule A-3(i) 
and the requirements of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, Public Law 111-203, 124 Stat. 1376 (2010) (the ``Dodd-
Frank Act'').\5\ Transitional Rule A-3(i), adopted on September 30, 
2010 to comply with the Board composition requirements of Section 975 
of the Dodd-Frank Act, established a two-year transition period for 
achieving a permanent Board structure under the new composition 
requirements of the Dodd-Frank Act and envisioned a series of further 
amendments to the rule during the transition period in furtherance 
thereof. The transitional period commenced on October 1, 2010 and 
concludes on September 30, 2012. The proposed rule change consists of 
amendments to MSRB Rule A-3(i) to provide for a three-year term for the 
class of five Board members--two public and three representing MSRB 
regulated entities--who will commence service on October 1, 2011. The 
amendments to Rule A-3(i) provide that the next class of Board members 
will consist of two public members and three members representing any 
category of regulated entity, including broker-dealers, bank dealers, 
and municipal advisors. The rule change further provides that the new 
class of five members of the Board of Directors will serve a three-year 
term.
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    \5\ See Exchange Act Release No. 63025 (Sep. 30, 2010), 75 FR 
61806 (Oct. 6, 2010).
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    The rule would state explicitly that five new members would be 
elected to the Board of Directors, although implicit in the rule, since 
five Board members are retiring as of September 30, 2010, and the MSRB 
must maintain a Board of Directors of 21 members during the 
transitional period. Further, the rule would state explicitly that two 
of the five new members would be public directors and three would be 
representative of MSRB regulated entities. While also implicit in Rule 
A-3(i), the rule change would make clear that the three industry 
positions may be filled by representatives of broker-dealers, bank 
dealers or municipal advisors, since the retiring industry members are 
representative of broker-dealers or bank dealers. Finally, the rule 
change would provide that the new class of five directors would have a 
three-year term. While the directors have historically served three-
year terms, the most recent Board class, elected at the start of the 
transitional period, was elected for a two-year term.
    Thus, this proposed rule change is intended to establish a three-
year term for the five new Board members who will commence service on 
October 1, 2011, consistent with Section 15B(b)(1) of the Securities 
Exchange Act of 1934 and prior Board practice. The proposed rule change 
would amend MSRB Rule A-3(i) in order to provide for the election of a 
new five member class for a three-year term commencing on October 1, 
2011. Of the five new members, two would be members of the public and 
three would be regulated representatives who are representative of and 
associated with brokers, dealers, municipal securities dealers or 
municipal advisors.
2. Statutory Basis
    The MSRB has adopted the proposed rule change pursuant to Section 
15B(b)(2)(B) \6\ of the Act, which provides that the MSRB's rules 
shall:
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    \6\ 15 U.S.C. 78o-4(b)(2)(B)

establish fair procedures for the nomination and election of members 
of the Board and assure fair representation in such nominations and 
elections of public representatives, broker dealer representatives, 
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bank representatives, and advisor representatives.

    The MSRB believes that the proposed rule change is consistent with 
the Act, as amended by the Dodd-Frank Act, in that it would provide for 
the maintenance of a 21 member Board with a majority of public members 
and have fair representation of broker-dealers, bank dealers, and 
municipal advisors, consistent with MSRB Rule A-3(i) as approved by the 
SEC.

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, since it is solely concerned with the 
administration of the MSRB and, in any event, provides for fair 
representation on the Board of public representatives, broker dealer 
representatives, bank dealer representatives and municipal advisor 
representatives.

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 on the 
proposed rule change.

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

    The MSRB represented that the proposed rule change qualifies for 
immediate effectiveness pursuant to Section 19(b)(3)(A)(iii) of the Act 
\7\ because it: (i) Does not significantly affect the protection of 
investors or the public interest; (ii) does not impose any significant 
burden on competition; and (iii) does not become operative for 30 days 
after filing or such shorter time as the Commission may designate 
consistent with the protection of investors and the public interest.\8\ 
The MSRB provided the required written notice of its intention to file 
the proposed rule change to the Commission on February 10, 2011, and 
the proposed rule change will become operative on April 1, 2011, which 
is more than 30 days after the filing of the proposed rule change.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ In addition, Rule 19b-4(f)(6)(iii) requires a self-
regulatory organization to give the Commission written notice of its 
intent to file the proposed rule change at least five business days 
prior to the date of filing of the proposed rule change, or such 
shorter time as designated by the Commission.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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.\9\
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    \9\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
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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:

[[Page 13007]]

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-2011-02 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MSRB-2011-02. 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 website 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 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-2011-02 and should be submitted on 
or before March 30, 2011.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-5279 Filed 3-8-11; 8:45 am]
BILLING CODE 8011-01-P


