
[Federal Register Volume 76, Number 71 (Wednesday, April 13, 2011)]
[Notices]
[Pages 20783-20784]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-8798]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64201, File No. SR-MSRB-2011-04]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Granting Approval of Proposed Rule Change To Amend the 
MSRB Short-Term Obligation Rate Transparency (SHORT) Subscription 
Service

April 6, 2011.

I. Introduction

    On February 10, 2011, 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 (``Exchange Act''),\1\ and Rule 19b-4 
thereunder,\2\ 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 
proposed rule change was published for comment in the Federal Register 
on March 2, 2011.\3\ The Commission received no comment letters about 
the proposed rule change. 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. 63950 (February 23, 
2011), 76 FR 11547 (the ``Commission's Notice'').
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II. Description of the Proposed Rule Change

    The Short-term Obligation Rate Transparency (``SHORT'') System is a

[[Page 20784]]

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 \4\ 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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    \4\ 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 VDROs, information 
about orders submitted for an ARS auction, and additional information 
about VRDOs.\5\ 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. A more complete description of 
the proposal is contained in the Commission's Notice.
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    \5\ See Securities Exchange Act Release No. 62755, August 20, 
2010 (File No. SR-MSRB-2010-02).
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    The MSRB has requested an effective date for the proposed rule 
change of May 16, 2011.

III. Discussion and Commission Findings

    The Commission has carefully considered the proposed rule change 
and finds that the proposed rule change is consistent with the 
requirements of the Exchange Act and the rules and regulations 
thereunder applicable to the MSRB \6\ and, in particular, the 
requirements of Section 15B(b)(2)(C) of the Exchange Act \7\ and the 
rules and regulations thereunder. Section 15B(b)(2)(C) of the Exchange 
Act requires, among other things, that the MSRB's rules shall
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    \6\ 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).
    \7\ 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 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, 
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municipal entities, obligated persons, and the public interest.

    The Commission believes that the proposed rule change is consistent 
with the Exchange Act in that 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.
    The Commission further believes that 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).
    The proposed rule change will become effective on May 16, 2011, as 
requested by the MSRB.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Exchange Act, that the proposed rule change (SR-MSRB-2011-04), be, and 
it hereby is, approved.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8798 Filed 4-12-11; 8:45 am]
BILLING CODE 8011-01-P


