
[Federal Register Volume 84, Number 43 (Tuesday, March 5, 2019)]
[Notices]
[Pages 7951-7954]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03890]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85206; File No. SR-MSRB-2019-03]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change to the MSRB's Facility for the Short-Term Obligation Rate 
Transparency (SHORT) System To Modernize and Consolidate the 
Information Facility for the SHORT System

February 27, 2019.
    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 25, 2019 the Municipal Securities Rulemaking Board 
(``MSRB'') filed with the Securities and Exchange Commission (``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 (the 
``proposed rule change'') to the MSRB's facility for the Short-Term 
Obligation Rate Transparency (SHORT) system to modernize and 
consolidate the information facility for the SHORT system (the ``SHORT 
IF''), which consists of the electronic interface for the collection 
and dissemination of information and documents related to municipal 
securities bearing interest at short-term rates and the electronic 
systems that process and transmit the information and documents for 
further dissemination (the ``SHORT system''). The MSRB has filed the 
proposed rule change under Section 19(b)(3)(A)(iii) of the Act \3\ and 
Rule 19b-4(f)(6) \4\ thereunder, as a noncontroversial rule change that 
renders the proposal effective upon filing. The proposed rule change 
would be made operative on April 8, 2019.
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    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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    The text of the proposed rule change is available on the MSRB's 
website at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2019-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
    MSRB Rule G-34 (``Rule G-34''), on CUSIP numbers, new issue, and 
market information requirements, requires brokers, dealers, and 
municipal securities dealers (collectively, ``dealers'') to report 
certain information and submit certain documents to the MSRB about 
auction rate securities (``ARS'') and variable rate demand obligations 
(``VRDOs''). More specifically, in terms of auction rate securities, 
Rule G-34(c)(i)(A) currently requires each dealer that submits an order 
directly to an auction agent for its own account or on behalf of 
another account to buy, hold or sell an auction rate security through 
the auction process program dealer shall report, or ensure the 
reporting of, certain data about the auction rate security and the 
results of the auction to the MSRB. In terms of VRDOs, Rule G-
34(c)(ii)(A) currently requires each dealer acting in the capacity of a 
remarketing agent to report certain information to the MSRB and to use 
its best efforts to obtain and submit certain documents to the MSRB.
    The SHORT system provides the submission platform and instructions 
for how dealers fulfill these regulatory

[[Page 7952]]

obligations, as well as certain processing of dealer data submissions 
for public dissemination by the MSRB. The SHORT IF sets forth the 
material aspects of the operation of the SHORT system by describing the 
basic functionality of, and the high-level parameters by which the MSRB 
operates, the SHORT system. The proposed rule change consists of 
amendments to the SHORT IF.\5\
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    \5\ The SHORT IF is currently available on the MSRB's website at 
http://www.msrb.org/Rules-and-Interpretations/MSRB-Rules/Facilities/SHORT-Facility.aspx.
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Background
    The SHORT system was implemented in 2009 to establish a trasparency 
system for collecting and disseminating interest rate and descriptive 
information on ARS and VRDOs and to provide free public access to 
information disseminated from the SHORT system through the MSRB's 
Electronic Municipal Market Access (EMMA[supreg]) system's Short-Term 
Obligation Rate Transparency Service, which makes such informaton and 
documents publicly available on the EMMA Portal (https://emma.msrb.org/
).\6\ The MSRB also makes such information and documents available 
through certain paid subscription feeds, which provide access to the 
data for a commercially reasonable fee in accordance with the terms of 
a subscription agreement between the MSRB and a subscribing 
counterparty.
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    \6\ See Securities Exchange Act Release No. 34-59212, January 7, 
2009 (File No. SR-MSRB-2008-07).
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    In 2010, the SHORT system was enhanced to collect additional 
information and documents that define auction procedures and bidding 
information for ARS and additional information on VRDOs, including 
interest rate setting mechanisms and liquidity facilities.\7\ The 
MSRB's most recent amendment to the SHORT IF in 2015 included, among 
other things, additional descriptions regarding the general 
availability of the SHORT system and its core operational hours.\8\
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    \7\ See Securities Exchange Act Release No. 62755, August 20, 
2010 (File No. SR-MSRB-2010-02).
    \8\ See Securities Exchange Act Release No. 75602 (August 4, 
2015), 80 FR 47976 (August 10, 2015) (File No. MSRB-2015-06).
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    The purpose of the proposed rule change is to revise the SHORT IF 
to harmonize its language and structure with the recently revised EMMA 
IF \9\ and Real-Time Transaction Reporting System (RTRS) information 
facility (``RTRS IF''),\10\ as well as to modernize and consolidate 
certain elements of the SHORT IF. As part of its ongoing efforts to 
ensure the precision and accuracy of its information facilities, the 
MSRB initiated a review of each of its three information facilities to 
ensure that they sufficiently and clearly describe the basic 
functionality and operations of the systems. The SHORT IF is the last 
information facility to be reviewed.
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    \9\ See Securities Exchange Act Release No. 84837 (December 17, 
2018), 83 FR 65765 (December 21, 2018) (File No. MSRB-2018-09).
    \10\ See Securities Exchange Act Release No. 83038 (April 12, 
2018), 83 FR 17200 (April 18, 2018) (File No. MSRB-2018-02).
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    In light of the already-enacted revisions to the EMMA IF and the 
RTRS IF, the MSRB not only performed a comprehensive review of the 
SHORT IF to evaluate whether it sufficiently and clearly describes the 
basic functionality and operation of the SHORT system, but also to 
evaluate whether its language conforms to and is otherwise consistent 
with the language utilized in the other information facilities. The 
MSRB believes that dealers, issuers, obligated persons, other 
submitters and subscribers benefit from the information included in the 
SHORT IF being provided in a concise and organized manner.
Proposed Amendments to the SHORT Information Facility
(i) Improved Descriptions of SHORT Functionality
    As part of its comprehensive review, the MSRB analyzed whether 
aspects of the SHORT IF could be enhanced to more precisely or 
concisely describe the SHORT system's functionality and operation, 
while ensuring that the SHORT IF continues to appropriately describe 
the basic functionality of and the high-level parameters by which the 
MSRB operates the EMMA system.
    One area where the MSRB determined that an enhanced description of 
SHORT system functionality would be beneficial is in reference to the 
process for posting documents and information on display on the EMMA 
Portal and dissemination through the SHORT subscription services. The 
SHORT IF references that the SHORT system disseminates information and 
documents within certain timeframes upon ``acceptance.'' As suggested 
in the revisions to the EMMA IF, the term ``acceptance'' could be 
interpreted to suggest that the MSRB formally approves or otherwise 
reviews the substantive content of a submission prior to its 
dissemination.
    The proposed amendments would revise this language to clarify that 
documents and information are disseminated promptly following 
successful processing of a submission through the SHORT system. For 
purposes of the SHORT IF, promptly shall mean within 15 minutes 
following the intake of the data by the SHORT system, transformation of 
such data for operational usability, and storage for effective 
retrieval for display or dissemination to public users and/or 
subscribers (``processing''). Submissions outside of core operational 
hours may be posted on the EMMA Portal promptly following the 
processing of such information, though some submissions outside of core 
operational hours may not be processed until the next business day.
    This clarification is consistent with the recent amendments to the 
EMMA IF and RTRS IF and better describes the SHORT system's ministerial 
function of intaking, displaying and disseminating documents and 
information. This description also reflects the fact that, prior to 
display and dissemination, the SHORT system, among other things, 
conducts routine format checks and timestamps the data, but does not 
conduct a substantive content review process to accept the documents 
and information submitted.
(ii) Removal of Certain Technical and Ancillary Information
    Given that the purpose of the SHORT IF is to set forth the material 
aspects of the SHORT system's operation, highly technical and ancillary 
information regarding the SHORT system is more appropriately provided 
in the Specifications for the SHORT System Data Submission System and 
similar documents that the MSRB maintains on its publicly available 
website (MSRB.org). The MSRB maintains several specification documents 
for the SHORT system, including the Short-term Obligation Rate 
Transparency (SHORT) System Submission Manual, Specifications for the 
SHORT System Data Submission System, and the Specifications for SHORT 
System Document Submission Services (collectively, the ``SHORT System 
User's Manual'').\11\
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    \11\ The Short-term Obligation Rate Transparency (SHORT) System 
Submission Manual, Specifications for the SHORT System Data 
Submission System, and the Specifications for SHORT System Document 
Submission Services are currently available on the MSRB's website, 
including at: http://www.msrb.org/Market-Transparency/Manuals.aspx.
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    The SHORT System User's Manual provides detailed information 
regarding, among other things, user guides for website submission 
interfaces and input specifications for computer-to-computer 
submission. Similarly, the

[[Page 7953]]

Specifications for the Short-term Obligation Subscription Service 
(``SHORT Subscription Service''), Instructions for the MSRB SHORT 
Subscription Service and Historical Data Product, Specifications for 
the EMMA SHORT Historical Product and the Specifications for the SHORT 
System Subscription Service (collectively, the ``SHORT Subscription 
Publications'') provide specifications and requirements to access, 
retrieve and understand the SHORT subscription services.\12\ The MSRB 
also maintains an MSRB Subscription Services Price List on MSRB.org to 
inform interested individuals about the pricing for the MSRB's 
subscription services.
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    \12\ The Specifications for the SHORT System Subscription 
Service are currently available on the MSRB's website at: http://www.msrb.org/Market-Transparency/Subscription-Services-and-Products/Variable-Rate-Securities-Subscriptions.aspx.
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    The proposed rule change would remove certain technical and 
ancillary information from the SHORT IF that is already presented in 
the SHORT System User's Manual and the SHORT Subscription Publications. 
The removal of such information will streamline the SHORT IF by only 
presenting the information that is necessary to describe the material 
aspects of the operation of the SHORT system.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
the provisions of Section 15B(b)(2)(C) of the Act,\13\ which provides 
that the MSRB's rules shall:

    \13\ 15 U.S.C. 78o-4(b)(2)(C).
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    . . . 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 proposed rule change would contribute to the MSRB's continuing 
efforts to improve market transparency by providing greater 
transparency regarding the material functionality and operations of the 
SHORT system. As the SHORT system disseminates information and 
documents related to municipal securities market bearing interest at 
short-term rates, any improvement with respect to the understanding of 
how the SHORT system operates will further perfect the mechanism of a 
free and open market in municipal securities. In addition, the 
clarifying amendments to the SHORT IF serve to foster the 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, 
by making it more likely that the market is promptly provided with the 
latest information.
    Specifically, the proposed amendments would increase the clarity 
and precision with respect to the description of basic SHORT system 
functionality and the high-level parameters by which the MSRB operates 
the SHORT system. The MSRB believes that dealers, issuers, obligated 
persons, other submitters and subscribers will benefit from a clearer 
understanding of this information. While additional technical 
information regarding the SHORT system is set forth in the SHORT System 
User's Manual, the SHORT Subscription Publications, and other similar 
documents that the MSRB maintains, the MSRB believes that it is 
important that material information regarding the SHORT system be 
clearly described in the SHORT IF. The proposed rule change serves this 
purpose.

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

    Section 15B(b)(2)(C) of the Act \14\ 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 proposed 
rule change consists of revisions to the SHORT IF to better align the 
language of the information facility to the MSRB's administration of 
the SHORT system. The proposed rule change seeks to clarify existing 
services and make minor changes of a technical nature to the 
information facility, including revisions that are consistent with the 
MSRB's prior rule filings that revised the information facilities for 
RTRS and EMMA. The proposed rule change will not substantively modify 
the manner in which the MSRB administers the SHORT system in collecting 
and disseminating information about municipal securities. Accordingly, 
the MSRB does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the Act.
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    \14\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Board did not solicit comment on the proposed change. 
Therefore, there are no comments on the proposed rule change received 
from members, participants or others.

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 \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6).
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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-2019-03 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-2019-03. 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 website (http://www.sec.gov/rules/sro.shtml). 
Copies of the

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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 10:00 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-MSRB-2019-03 and should be submitted on 
or before March 26, 2019.

    For the Commission, pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-03890 Filed 3-4-19; 8:45 am]
 BILLING CODE 8011-01-P


