
[Federal Register Volume 80, Number 167 (Friday, August 28, 2015)]
[Notices]
[Pages 52352-52357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21296]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75751; File No. SR-MSRB-2015-08]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change Consisting of Amendments to MSRB Rule A-12, on Registration, and 
MSRB Rule A-13, on Underwriting and Transaction Assessments for 
Brokers, Dealers and Municipal Securities Dealers

August 24, 2015.
    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 August 10, 2015, the Municipal Securities Rulemaking Board (the 
``MSRB'' or ``Board'') filed with the Securities and Exchange 
Commission (the ``SEC'' or ``Commission'') the proposed rule change as 
described in Items I, II, and III 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 filed with the Commission a proposed rule change 
consisting of amendments to MSRB Rule A-12, on registration, and MSRB 
Rule A-13, on underwriting and transaction assessments for brokers, 
dealers and municipal securities dealers (``proposed rule change''). 
The MSRB designated the proposed rule change as ``establishing or 
changing a due, fee or other charge'' under section 19(b)(3)(A)(ii) of 
the Act \3\ and Rule 19b-4(f)(2) \4\ thereunder, which renders the 
proposal effective upon filing with the Commission. The implementation 
date of the proposed amendment to Rule A-12 is October 1, 2015 and the 
implementation date for the proposed amendment to Rule A-13 is January 
1, 2016.
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    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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    The text of the proposed rule change is available on the MSRB's Web 
site at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2015-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 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 Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to adjust certain 
existing MSRB fees applicable to dealers and municipal advisors that 
engage in municipal securities and municipal advisory activities 
(collectively ``regulated entities'') to continue to assess reasonable 
fees necessary to

[[Page 52353]]

defray the costs and expenses of operating and administering the MSRB.
    The proposed rule change would amend Rule A-13 to decrease the 
existing underwriting fee from $.03 per $1,000 of par value to $.0275 
per $1,000 of par value. Additionally, the proposed rule change would 
amend Rule A-12 to (i) increase the initial registration fee from $100 
to $1,000 and (ii) increase the annual registration fee from $500 to 
$1,000. Further, the proposed rule change would amend Rule A-13(c)(iii) 
to clarify that securities issued pursuant to a commercial paper 
program are not subject to the transaction fee.
Holistic Review of MSRB Fees
    The MSRB assesses regulated entities various fees designed to 
defray the cost of its operations, including rulemaking, market 
transparency and educational initiatives that fulfill its Congressional 
mandate to, among other things, protect investors and municipal 
entities by promoting the fairness and efficiency of the $3.7 trillion 
municipal securities market. The MSRB provides investors, state and 
local governments and other market participants with free access to 
disclosure and transparency information in the municipal securities 
market through its Electronic Municipal Market Access (EMMA[supreg]) 
\5\ Web site, the official repository for information on virtually all 
municipal bonds. Additionally, the MSRB serves as an objective resource 
on the municipal market, conducts extensive education and outreach to 
market participants, and provides market leadership on key issues 
impacting the municipal securities market.
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    \5\ EMMA is a registered trademark of the MSRB.
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    Section 15B(b)(2)(J) of the Act \6\ provides, in pertinent part, 
that each dealer and municipal advisor shall pay to the Board such 
reasonable fees and charges as may be necessary or appropriate to 
defray the costs and expenses of operating and administering the Board 
and that the MSRB shall have rules specifying the amount of such fees. 
The current MSRB fees are:
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    \6\ 15 U.S.C. 78o-4(b)(2)(J).
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    1. Municipal advisor professional fee (Rule A-11) $300 annual fee 
to be paid for each Form MA-I filed with the SEC by the municipal 
advisor;
    2. Initial registration fee (Rule A-12) $100 one-time registration 
fee to be paid by each dealer to register with the MSRB prior to 
engaging in municipal securities activities and each municipal advisor 
to register with the MSRB prior to engaging in municipal advisory 
activities;
    3. Annual registration fee (Rule A-12) $500 annual fee to be paid 
by each dealer and municipal advisor registered with the MSRB;
    4. Underwriting fee (Rule A-13) .003% ($.03 per $1,000) of the par 
value to be paid by a dealer, except in limited circumstances, for all 
municipal securities purchased from an issuer by or through such 
dealer, whether acting as principal or agent, as part of a primary 
offering;
    5. Transaction fee (Rule A-13) .001% ($.01 per $1,000) of the total 
par value to be paid by a dealer, except in limited circumstances, for 
inter-dealer sales and customer sales reported to the MSRB pursuant to 
MSRB Rule G-14(b);
    6. Technology fee (Rule A-13) $1.00 paid by a dealer per 
transaction for each inter-dealer sale and for each sale to customers 
reported to the MSRB pursuant to MSRB Rule G-14(b); and
    7. Examination fee (Rule A-16) $150 test development fee assessed 
per candidate for each MSRB examination.
    In addition, the MSRB charges data subscription and service fees 
for subscribers, including dealers and municipal advisors, seeking 
direct electronic delivery of municipal trade data and disclosure 
documents associated with municipal bond issues.\7\
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    \7\ This information is available without direct electronic 
delivery on the MSRB's EMMA Web site at no charge.
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    Over the course of the current fiscal year, the Board has 
undertaken a holistic review of the fees assessed on regulated 
entities. The last such review occurred in 2010 and culminated with 
amendments to Rule A-13, specifically a transaction fee increase from 
$.005 to $.01 per $1,000 of the total par value of inter-dealer and 
customer sales reported to the MSRB and the establishment of a $1.00 
technology fee per transaction for each inter-dealer and customer sale 
reported to the MSRB.\8\ These two changes were necessitated by 
increasing costs, including those associated with implementing the 
mandates of the Dodd-Frank Wall Street Reform and Consumer Protection 
Act (``Dodd-Frank'') \9\ and the need for additional revenue to replace 
aging and outdated information technology software and hardware and 
ensure the operational integrity of the MSRB's information systems. The 
funds generated from the technology fee have been segregated for 
accounting purposes and dedicated solely to funding capital expenses 
for technology investments in capitalized hardware and software.
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    \8\ These fees became effective on January 1, 2011. See Exchange 
Act Release No. 63621 (Dec. 29, 2010), 76 FR 604 (Jan. 5, 2011) 
(File No. SR-MSRB-2010-10).
    \9\ Public Law 111-203, 124 Stat. 1376 (2010).
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    Since 2011, the MSRB has successfully reached and now exceeds the 
operating reserve target of twelve months of operating expenses and has 
accumulated the reserve target of three times the annual information 
technology depreciation expenses. The annual technology fee revenues 
exceed the annual information technology capital draws and have 
provided the funding to establish the targeted technology renewal fund. 
In fact, once the reserve target was met, excess revenues created a 
surplus over the reserve target, resulting in the Board approving a 
technology fee rebate of $3.6 million in July 2014.
    The Board recognized that, with the current revenue and information 
technology capital spend rate for capitalized hardware and software, 
the surplus in the segregated technology fund would continue to grow. 
Meanwhile, the Board noted that operating reserves are projected to 
fall to 12 months of operating expenses in fiscal year 2017 and 
continue to decline thereafter because operating expenses continue to 
modestly rise annually while the current primary revenue sources to 
fund these operating expenses are projected to be effectively flat. 
This decline in reserves could accelerate if bond and trade volumes 
fall below projected levels causing funds from market activity fees to 
decrease. The inverse relationship between the projected growing 
surplus in the technology renewal fund and the potential erosion of 
operating reserves in the next few years was the catalyst for the Board 
to conduct a holistic fee review.
    The Board evaluated the assessment of MSRB fees on regulated 
entities with the goal of better aligning revenue sources with 
operating expenses and all capital needs. The Board strives to 
diversify funding sources among regulated entities and other entities 
that fund MSRB services in a manner that ensures long-term 
sustainability, while continuing to strike an equitable balance among 
regulated entities and a fair allocation of the expenses of the 
regulatory activities, systems development and operational activities 
undertaken by the MSRB. Proxies used by the Board for fairly allocating 
to regulated entities the cost of MSRB regulation include, but are not 
limited to: Being registered to engage in municipal securities or 
municipal advisory activities; the level of dealer market activity as 
determined by the number of transactions executed and total par value 
of transactions executed;

[[Page 52354]]

and the number of associated persons engaged in municipal advisory 
activities on behalf of a registered municipal advisor. Recognizing 
that in any given year there could be more or less activity by a 
particular class of regulated entities, the Board, as it has 
historically, sought to establish a fee structure that would result in 
a balanced and reasonable contribution over the long run from all 
regulated entities to defray the costs and expenses of operating and 
administering the MSRB.
    The proposed changes resulting from the Board's holistic fee review 
are summarized below.
Annual and Initial Fees Under MSRB Rule A-12
    The current annual registration fee of $500 pursuant to Rule A-12 
is paid by each of the over 2,000 regulated entities registered with 
the MSRB. While the annual fee amount has not been changed since 
2009,\10\ the share of total expenses that the annual fees defray has 
continued to decrease. For example, the total annual fees collected in 
2009 defrayed nearly 5% of total expenses whereas the total annual fee 
amounts currently defray only approximately 3.5% of total expenses 
despite an increase in the number of regulated entities associated with 
the registration of municipal advisors post Dodd-Frank. In addition, 
approximately 35% of the entities registered with the MSRB as dealers 
do not regularly engage in any municipal securities trade activity 
subject to market activity fee assessments under Rule A-13. Therefore, 
the annual fee is the primary way dealers who may only engage in 
municipal fund securities business (i.e., 529 college savings plan 
sales and Local Government Investment Pool sales) or have the 
occasional municipal bond sale share in the costs and expenses of 
operating and administering the MSRB. Thus, an increase in the annual 
fee from $500 to $1,000 provides for all regulated entities to more 
fairly contribute to defraying the costs and expenses of operating and 
administering the MSRB.
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    \10\ See Exchange Act Release No. 60528 (Aug. 18, 2009), 74 FR 
43205 (Aug. 26, 2009) (File No. SR-MSRB-2009-13).
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    Similarly, the Board concluded that an increase in the initial 
registration fee under Rule A-12 from $100 to $1,000 was reasonable to 
help defray a significant portion of the administrative and operational 
costs associated with processing an initial registration. The fee for 
initial registration has not been increased since its inception in 1975 
and, as a result, is low for an initial registration fee.\11\ In an 
effort to not overburden the municipal advisor community, the Board did 
not consider an increase to the initial registration fee throughout the 
post Dodd-Frank initial registration process.\12\
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    \11\ For example, the fee for initial registration as a broker-
dealer or investment adviser with the vast majority (47) of state 
regulators is currently more than $100. Moreover, the fee for 
initial registration with the Financial Industry Regulatory 
Authority currently starts at $7,500.
    \12\ Post Dodd-Frank, 925 non-dealer municipal advisors 
registered with the MSRB (exclusive of municipal advisors that are 
also registered dealers), each of which paid $100 to register. There 
are currently approximately 590 non-dealer municipal advisors 
registered with the MSRB.
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    Together, the increase in the annual and initial fees would provide 
approximately $1 million in annual revenue. The MSRB believes the 
proposed increase in registration fees will equitably defray the 
expenses of MSRB operations and allow the MSRB to lower underwriting 
fees by an offsetting amount to achieve a more balanced distribution of 
fees.
Market Activity Fees Under MSRB Rule A-13
    The market activity fees (i.e., underwriting, transaction and 
technology fees) assessed under Rule A-13 represent 85% of the MSRB's 
fiscal year 2014 total revenue. In 2014, of the over 2000 dealers and 
municipal advisors registered with the MSRB, roughly 140 dealers were 
assessed underwriting fees and 840 dealers were assessed transaction 
and technology fees. The underwriting and transaction fees, which are 
generally proportionate to a dealer's relative dollar volume of 
activity within the industry, are based on the par value amount of 
underwriting and customer and inter-dealer transactions during the 
year. The technology fee is based on a dealer's participation in the 
market as measured by the total number of inter-dealer and customer 
sales reported to the MSRB, rather than par value, and coupled with the 
transaction and underwriting fees, contribute to an equitable 
distribution of the market activity assessments for dealers. However, 
the assessment of these market activity fees is highly concentrated 
among a small number of dealers; based on fiscal year 2014 fee revenue, 
less than a dozen dealers paid 52% of all such fees. The Board 
determined that, notwithstanding this concentration, these market 
activity fees are reasonable in light of the level of participation in 
the municipal securities market by these dealers.
Underwriting Fee
    With organizational reserves (operating reserves and the technology 
renewal fund) currently above targeted levels and future year financial 
pro formas indicating declines in aggregate reserve levels (while 
remaining slightly above targeted levels), coupled with the increase in 
registration fees, the Board determined to decrease the underwriting 
fee from .003% ($.03) to .00275% ($.0275) per $1,000 of the par value. 
Based on underwriting volume ranging from $300 billion to $400 billion 
annually, the decrease in the underwriting fee will reduce MSRB revenue 
by approximately $1 million annually.\13\ The Board decided to lower 
the underwriting fee for several reasons. First, the fee is based on 
the assessment factor (i.e., par value of underwriting) that is the 
most volatile year over year. Second, as noted above, underwriting fees 
are paid primarily by a small number of dealers, all of which also pay 
significant transaction and technology fees, making some relief to such 
firms equitable. Additionally, for each new underwriting, the sales of 
the initial offering are subject to all three market activity fees such 
that a decrease in the underwriting fee on initial bond sales is fair 
and reasonable.
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    \13\ As noted above, this $1 million reduction in revenue will 
be recouped through the increase in registration fees.
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Technology Fee
    The technology fee was implemented in January 2011 to fund 
capitalized hardware and software for the MSRB market transparency 
systems.\14\ At that time, the MSRB stated the assessment of the 
technology fee would be reviewed periodically. The MSRB's market 
transparency systems collect municipal market data, disclosures and 
statistics and make this information available to investors and the 
public, primarily through the EMMA Web site, at no cost. Almost five 
years after the implementation of the technology fee, the ongoing 
information technology support and operational costs of maintaining and 
servicing EMMA, the Real-time Transaction Reporting System (``RTRS''), 
the Short-term Obligation Rate Transparency (``SHORT'') system, as well 
as other market transparency systems, exceeds capital needs for new 
hardware and software. In fact, the annual operating costs of the 
market transparency systems in fiscal year 2014 were approximately $14 
million, which represents an almost doubling of the expenses for the 
market transparency systems from $7.2 million in fiscal year

[[Page 52355]]

2008 prior to the launch of EMMA, and far exceeds the approximately $7 
million generated annually from the technology fee.
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    \14\ See note 6 supra.
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    The Board evaluated reducing the technology fee because the target 
to maintain three-times the annual information technology depreciation 
expenses has been met. However, based on its analysis, the Board 
recognized that without proposing a new fee on regulated entities, the 
total revenue generated from all sources, excluding the technology fee, 
would be inadequate to fund projected operational expenses of the 
organization. When the technology fee was introduced in 2011, it was 
believed that assessing a fee on a per trade basis established a more 
balanced distribution of fees on dealers and their activities, which 
the Board continues to support. The Board determined during the 
holistic fee review that, if a new fee for regulated entities was 
proposed, assessing the fee based on the number of trades would be the 
appropriate measure. The Board considered the potential for additional 
operational and compliance costs to both dealers and the MSRB in 
implementing a new fee assessment and did not believe additional costs 
were warranted when, instead of implementing a new fee based on the 
number of trades, it would be reasonable to continue to assess the 
technology fee at its current amount, provided that the revenue 
collected would be available for funding all MSRB operations. 
Understanding that technology related expenses currently account for 
nearly 50% of the costs and expenses of operating and administering the 
MSRB, the Board concluded that all fees collected from regulated 
entities should be aggregated and available for the most appropriate 
organizational uses.\15\ Therefore, to achieve adequate funding aligned 
with expense levels, the Board determined to continue to assess a 
technology fee ($1.00 per transaction for each inter-dealer municipal 
securities sale and for each sale to customers), but that the revenue 
from the technology fee will no longer be designated exclusively for 
capitalized hardware and software expenses.
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    \15\ Based on the fiscal year 2014 audited financial statements 
of the MSRB, total operational expenses were $29.5 million, of that, 
48% was spent on market information transparency programs and 
operations, 20% was spent on rulemaking and policy development, 7% 
was spent on market leadership, outreach and education, 6% was spent 
on Board governance and rulemaking oversight, and 19% was spent on 
administration.
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Transaction Fee
    The transaction fee is assessed on the total par value of inter-
dealer and customer sales reported to the MSRB by dealers under Rule G-
14(b). Rule A-13(c)(iii) exempts from this fee sale transactions in 
municipal securities that have a final stated maturity of nine months 
or less or that, at the time of trade, may be tendered at the option of 
the holder to an issuer of such securities or its designated agent for 
redemption or purchase at par value or more at least as frequently as 
every nine months until maturity, earlier redemption, or purchase by an 
issuer or its designated agent. The Board continues to support such 
exemptions recognizing that, given the traditionally low short-term 
interest rates on such short-term instruments, charging fees on such 
instruments may impair the market for these products. While the 
transaction fee has never been applicable to commercial paper, which 
usually has a final stated maturity of nine months or less, there are 
occasions when the maturity date of commercial paper is extended past a 
nine-month maturity date, which raises a question as to whether the 
transaction fee would then apply. During its holistic fee review, the 
Board confirmed that, even in cases of the extended maturity date, 
commercial paper issues should remain exempt from the transaction fee. 
Accordingly, the proposed rule change adds language to the exemption 
provisions in MSRB Rule A-13(c)(iii) to clarify that the exemption from 
the transaction fee assessment also applies to securities issued 
pursuant to a commercial paper program.\16\
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    \16\ Furthermore, this revision clarifies that the transaction 
fee exemption is not limited to ``commercial paper'' as specifically 
defined in MSRB Rule G-32(d)(xiii).
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Fees Not Being Modified
    The municipal advisor professional fee under Rule A-11 currently 
assesses $300 per professional for each Form MA-I filed with the 
Commission as of January 31 of each year.\17\ In establishing that fee, 
the MSRB had targeted fees generated from municipal advisors under Rule 
A-11 to provide revenue of approximately $2 million annually, or 
approximately 5% of total MSRB revenue; however, such fees are 
currently expected to generate only approximately $1.17 million, or 
approximately 3% of total revenue in fiscal year 2016. This decrease is 
a result of the number of municipal advisor professionals for whom 
Forms MA-I have been filed with the Commission being fewer than 
originally estimated. The Board recognized the significant costs 
associated with developing a new regulatory regime for municipal 
advisors for the protection of investors, municipal entities and 
obligated persons and acknowledged that to generate the targeted 
revenue level, the professional fee for each person that engages in 
municipal advisory activities on behalf of a municipal advisor may need 
to be increased. However, the Board determined to not make any changes 
to the professional fee at this time but to revisit the fee in the 
future providing additional time for the municipal advisor regulations 
and business models to more fully develop.
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    \17\ See Exchange Act Release No. 72019 (Apr. 25, 2014), 79 FR 
24798 (May 1, 2014) (File No. SR-MSRB-2014-03).
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    The professional examination fees established under Rule A-16 were 
increased from $60 to $150 effective April 1, 2015.\18\ The Board 
believes that no further adjustment is currently warranted.
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    \18\ See Exchange Act Release No. 74561 (Mar. 23, 2015), 80 FR 
16485 (Mar. 27, 2015) (File No. SR-MSRB-2015-01).
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    Data subscription service fees were studied and examined in fiscal 
year 2014 and revised effective April 1, 2014.\19\ Fees for the 
Comprehensive Transaction data service, the RTRS service and the SHORT 
service were increased by 10% at that time. Since that increase, the 
number of subscribers has increased by 4.4%, indicating the continuing 
reasonableness of the prior fee increase. The Board believes that no 
further adjustments are currently warranted.
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    \19\ See Exchange Act Release No. 71690 (Mar. 11, 2014), 78 FR 
14769 (Mar. 17, 2014) (File No. SR-MSRB-2014-02).
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2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
section 15B(b)(2)(J) of the Act \20\ which requires, in pertinent part, 
that the MSRB's rules shall provide that each municipal securities 
broker, municipal securities dealer, and municipal advisor shall pay to 
the Board such reasonable fees and charges as may be necessary or 
appropriate to defray the costs and expenses of operating and 
administering the Board and that such rules shall specify the amount of 
such fees and charges.
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    \20\ 15 U.S.C. 78o-4(b)(2)(J).
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    The MSRB believes that its rules provide for reasonable dues, fees 
and other charges among registered entities. The MSRB believes that the 
proposed fees are reasonable and necessary to fund MSRB services in a 
manner that ensures long-term sustainability, seeking to achieve an 
equitable balance

[[Page 52356]]

among regulated entities and a fair allocation of the expenses of the 
regulatory activities, system development and operational activities 
undertaken by the MSRB. The proposed rule change would maintain the 
total amount of fees collected by the MSRB at approximately the same 
levels while continuing to ensure that the MSRB maintains sufficient 
reserves to meet its regulatory responsibilities.

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

    Section 15B(b)(2)(C) of the Act \21\ requires that MSRB rules not 
be designed to impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act. In addition, 
section 15B(b)(2)(L)(iv) of the Act \22\ provides that MSRB rules ``not 
impose a regulatory burden on small municipal advisors that is not 
necessary or appropriate in the public interest and for the protection 
of investors, municipal entities, and obligated persons, provided that 
there is robust protection of investors against fraud.''
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    \21\ 15 U.S.C. 78o-4(b)(2)(C).
    \22\ 15 U.S.C. 78o-4(b)(2)(L)(iv).
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    In considering these standards, the MSRB was guided by the Board's 
Policy on the Use of Economic Analysis. The MSRB does not believe that 
the proposed rule changes will impose additional burdens on competition 
that are not necessary or appropriate in furtherance of the purposes of 
the Act.
    The Board believes the increase in the initial fee under Rule A-12 
from $100 to $1,000 is necessary and appropriate to ensure that new 
registrants cover a significant portion of the MSRB administrative 
costs of processing an initial registration. The MSRB recognizes the 
possibility that these fees may represent an initial barrier to entry. 
The Board is not aware of data or other information that would allow 
for a quantification of the potential impact of this fee increase, but 
based on experience expects the impact to be small and unlikely to 
negatively impact the competitiveness of municipal securities or 
municipal advisor markets in which the registrants participate. 
Further, the Board notes that firms wishing to engage in municipal 
securities activities and/or municipal advisory activities face other 
costs associated with complying with applicable laws and regulations. 
Based on the Board's experience, the one-time initial fee for 
registration, even at its proposed new level of $1,000, represents a 
relatively small share of the typically associated legal and regulatory 
compliance costs. The MSRB anticipates that a potential market entrant 
who is actually deterred by this fee may likely find it difficult to 
fully comply with the other regulatory and legal requirements 
associated with the market in which it wishes to offer services.
    The Board believes the increase in the annual fee under Rule A-12 
from $500 to $1,000 is necessary and appropriate to ensure that MSRB 
registrants that do not regularly engage in the market activities 
assessed under Rule A-13, but nonetheless participate in the municipal 
securities market more broadly, share in the costs and expenses of 
operating and administering the MSRB. The MSRB recognizes that it is 
possible that these fees may cause a small number of firms with limited 
attachment to the municipal securities market to exit or further reduce 
their activity. The Board is not aware of data or other information 
that would allow for a quantification of this potential impact, but 
based on experience expects the impact to be small and unlikely to 
negatively impact the competitiveness of the municipal securities or 
municipal advisor markets in which registrants participate. Further, 
the Board notes that firms wishing to engage in municipal securities 
activities and/or municipal advisory activities face other costs 
associated with complying with applicable laws and regulations. Based 
on the Board's experience, the annual fee, even at its proposed new 
level of $1,000, represents a relatively small share of the typically 
associated annual legal and regulatory compliance costs. The MSRB 
anticipates that a registrant who is adversely impacted by a $500 per 
year increase may likely find it difficult to fully comply with the 
other regulatory and legal requirements associated with the market in 
which it wishes to offer services.
    The Board is not making any changes to the municipal advisor 
professional fee under Rule A-11 at this time. Therefore, the only fee 
increase affecting small municipal advisors is that to the annual, per-
firm registration fee. The MSRB recognizes that any fee that is 
assessed on a per firm basis, rather than activity basis, will likely 
represent a greater share of a small firm's revenue than it will a 
larger firm's revenue and that this could cause some small firms to 
exit the market. However, the Board believes that in most cases, the 
annual fee will represent a very small percentage of a firm's revenue. 
As noted above, the Board also believes that a firm that is adversely 
impacted by a $500 per year increase may find it difficult to fully 
comply with the other regulatory and legal requirements associated with 
the market in which it wishes to offer services. Further, as the SEC 
concluded in its final rule on the permanent registration of municipal 
advisors, the market would be likely to remain competitive despite the 
potential exit of some municipal advisors (including small entity 
municipal advisors), consolidation of municipal advisors, or lack of 
new entrants into the market.

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 forgoing rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \23\ and paragraph (f) of Rule 19b-4 \24\ 
thereunder. The amendments to Rule A-12 will have an implementation 
date of October 1, 2015 and the amendments to Rule A-13 will have an 
implementation date of January 1, 2016. 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.
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    \23\ 15 U.S.C. 78s(b)(3)(A).
    \24\ 17 CFR 240.19b-4(f).
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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:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-MSRB-2015-08 on the subject line.

Paper Comments

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

    All submissions should refer to File Number SR-MSRB-2015-08. This 
file number should be included on the

[[Page 52357]]

subject line if email 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 10:00 a.m. and 3:00 p.m. Copies of 
the 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-2015-08 and should be submitted on or before 
September 18, 2015.

    For the Commission, pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-21296 Filed 8-27-15; 8:45 am]
 BILLING CODE 8011-01-P


