
[Federal Register Volume 81, Number 53 (Friday, March 18, 2016)]
[Notices]
[Pages 14919-14920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-06093]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77366; File No. SR-MSRB-2016-05]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change To Revise an Effective Date of Several Previously-Approved 
Amendments to Rule G-14, on Transaction Reporting

March 14, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ 
notice is hereby given that on March 2, 2016, the Municipal Securities 
Rulemaking Board (the ``MSRB'' or ``Board'') filed with the Securities 
and Exchange Commission (the ``Commission'' or ``SEC'') 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 to revise 
the May 23, 2016, effective date of several previously-approved 
amendments to Rule G-14, on transaction reporting (``proposed rule 
change'').\3\ The MSRB has designated the proposed rule change for 
immediate effectiveness. The new effective date of the amendments to 
Rule G-14 will be July 18, 2016.
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    \3\ See Exchange Act Release No. 75039 (May 22, 2015), 80 FR 
31084 (June 1, 2015) (SR-MSRB-2015-02).
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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/2016-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 MSRB proposes to revise the effective date of amendments to 
Rule G-14. On May 22, 2015, the Commission approved the amendments with 
a year-long implementation period and an effective date of May 23, 
2016.\4\ Rule G-14 requires dealers to report all executed transactions 
in most municipal securities to the MSRB's Real-Time Transaction 
Reporting System (``RTRS'') within 15 minutes of the time of trade, 
with limited exceptions. RTRS serves the dual objectives of price 
transparency and market surveillance. Because a comprehensive database 
of transactions is needed for the surveillance function of RTRS, Rule 
G-14, with limited exceptions, requires dealers to report all of their 
purchase-sale transactions to RTRS, not only those that qualify for 
public dissemination to serve the transparency function of the system. 
The MSRB makes transaction data available to the general public through 
the Electronic Municipal Market Access (EMMA[supreg]) Web site at no 
cost, and disseminates such data through paid subscription services to 
market data vendors, institutional market participants and others that 
subscribe to the data feed.
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    \4\ Id.
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    The amendments to Rule G-14 enhance the post-trade price 
transparency information provided through RTRS by:
     Expanding the application of the existing list offering 
price and takedown indicator to cases involving distribution 
participant dealers and takedown transactions that are not at a 
discount from the list offering price;
     eliminating the requirement for dealers to report yield on 
customer trade reports and, instead, enabling the MSRB to calculate and 
disseminate yield on customer trades;
     establishing a new indicator for customer trades involving 
non-transaction-based compensation arrangements; and
     establishing a new indicator for alternative trading 
system (``ATS'') transactions.
    The Financial Industry Regulatory Authority (``FINRA'') obtained 
Commission approval to make similar changes to the post-trade reporting 
requirements for its members with respect to securities eligible for 
FINRA's Trade Reporting and Compliance Engine (``TRACE'').\5\ These 
similar FINRA requirements were also set to take effect on May 23, 
2016, which FINRA believed (at the time it proposed its rule change) 
would be sufficient lead-time for its members to facilitate planning 
and scheduling of necessary technological changes, but it recently 
extended the effective date to be July 18, 2016. FINRA provided the 
extension to provide members additional time to complete systems 
changes necessary to comply with the reporting requirements.\6\
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    \5\ See FINRA Rules 6730 and 6732; Exchange Act Release No. 
76176 (Oct. 16, 2015), 80 FR 64039 (Oct. 22, 2015) (SR-FINRA-2015-
026) (requiring the reporting of an indicator when a TRACE report 
does not reflect a commission or mark-up/mark-down); Exchange Act 
Release No. 76677 (Dec. 17, 2015), 80 FR 79966 (Dec. 23, 2015) (SR-
FINRA-2015-055) (providing FINRA with authority to grant exemptions 
from TRACE reporting requirements for certain ATS transactions, and 
requiring the reporting of the identity of the ATS on which an 
exempted trade occurs). See also https://www.finra.org/industry/trace/trace-reporting-and-dissemination-no-remuneration-trades-and-ats.
    \6\ See Exchange Act Release No. 77015 (Feb. 2, 2016), 81 FR 
6555 (Feb. 8, 2016) (SR-FINRA-2016-003).
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    In setting an effective date of May 23, 2016, one year from the 
date of Commission approval of the amendments to Rule G-14, the MSRB 
intended to provide sufficient time for brokers, dealers and municipal 
securities dealers (collectively, ``dealers''), and subscribers, to 
undertake programming changes related to the amendments, as well as to 
provide an adequate testing period for dealers and subscribers that 
interface with RTRS. While the MSRB believes that one year was a 
sufficient amount of time for dealers and subscribers to make the 
programming changes necessary to comply with the amendments to Rule G-
14, it believes that harmonization with the implementation of similar 
FINRA reporting requirements will

[[Page 14920]]

promote regulatory efficiency and reduce the burden on dealers and 
subscribers that are making programming changes related to both MSRB 
and FINRA rule changes. Accordingly, the MSRB submits this proposed 
rule change to revise the effective date of the amendments to be July 
18, 2016.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2)(C) of the Act,\7\ which provides that the MSRB's 
rules shall:
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    \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 proposed rule change does not alter any rule language but 
revises the effective date of the amendments to Rule G-14, which were 
previously approved by the Commission. By aligning the effective date 
of the amendments with the effective date of similar FINRA post-trade 
reporting requirements, the MSRB believes the proposed rule change will 
promote compliance with the amendments and promote just and equitable 
principles of trade, facilitate transactions in municipal securities, 
remove impediments to and perfect the mechanism of a free and open 
market in municipal securities and protect investors. In addition, the 
MSRB believes the proposed rule change will create potential regulatory 
efficiencies by allowing dealers that choose to do so to implement 
programming changes and perform testing for both MSRB and FINRA 
requirements simultaneously.

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

    Section 15B(b)(2)(C) of the Act \8\ 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. The MSRB does 
not believe that the proposed rule change would impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act. The proposed rule change will not alter any rule language 
and will, instead, only revise the effective date of the amendments to 
Rule G-14 to be July 18, 2016.
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    \8\ Id.
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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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.10 11
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ In addition, Rule 19b-4(f)(6)(iii) requires a self-
regulatory organization to give the Commission written notice of its 
intent to file a proposed rule change, along with a brief 
description and text of such proposed rule change, at least five 
business days prior to the date of filing, or such shorter time as 
designated by the Commission. The MSRB fulfilled this obligation.
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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.

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-2016-05 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-2016-05. This file 
number should be included on the 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-2016-05 and should be 
submitted on or before April 8, 2016.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, pursuant to delegated authority.\12\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-06093 Filed 3-17-16; 8:45 am]
BILLING CODE 8011-01-P


