Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of Proposed Rule Change Relating to Official Statement Delivery Requirements Under Rule G-32, Rule G-36, and Rule G-11, 42604-42608 [E5-3944]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 141 (Monday, July 25, 2005)]
[Notices]
[Pages 42604-42608]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3944]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52058; File No. SR-MSRB-2005-13]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing of Proposed Rule Change Relating to Official 
Statement Delivery Requirements Under Rule G-32, Rule G-36, and Rule G-
11

July 19, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 23, 2005, the Municipal Securities Rulemaking Board (``MSRB'' 
or ``Board'') 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 has filed with the SEC a proposed rule change consisting 
of amendments to Rule G-32 (on delivery of official statements to new 
issue customers), Rule G-36 (on delivery of official statements and 
advance refunding documents to the Board) and Rule G-11 (on new issue 
municipal securities during the underwriting period). The proposed rule 
change is intended to improve the efficiency of official statement 
dissemination in the municipal securities marketplace and the 
timeliness of official statement deliveries to customers. The text of 
the proposed rule change is available on the MSRB's Web site (https://
www.msrb.org), 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 proposed rule change is designed to improve the efficiency and 
timeliness of dissemination of official statements to underwriters and 
other brokers, dealers, and municipal securities dealers (``dealers''), 
which in turn should also improve the efficiency and timeliness of 
dealer-to-customer dissemination of official statements. The proposed 
amendments are described more fully below.

Dissemination of Electronic Official Statements by Managing and Sole 
Underwriters

    The proposed amendments establish new clause (i)(C) of Rule G-
32(c), which requires the managing or sole underwriter for new issues 
of municipal securities to provide a printable electronic version of 
the official statement (if an electronic version has been prepared and 
the issuer does not object to its distribution) to any dealer that 
requests an electronic version and provides an e-mail address or other 
delivery instructions acceptable to the managing or sole underwriter. 
This obligation is in addition to the managing or sole underwriter's 
obligation to send paper copies of the official statement in the 
required quantities (i.e., one printed copy plus not less than one 
additional printed copy per $100,000 par value purchased by the dealer 
for sale to customers). However, if the requesting dealer consents, the 
managing or sole underwriter is permitted to provide such dealer solely 
with the electronic official statement in lieu of paper copies 
otherwise required under the rule.\3\
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    \3\ The managing or sole underwriter also need not provide the 
dealer with information on how to obtain additional copies of the 
official statement, as would otherwise be required under clause 
(i)(B) of Rule G-32(c), since such dealer will have agreed to rely 
exclusively on the printable electronic version.
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    The proposed rule change does not specify a particular file format 
for the electronic version of the official statement, other than that 
the electronic version be printable. Portable document format (PDF) 
files (and, in the future, any other file formats that it may hereafter 
accept for purposes of official statement submissions to the MSRB's 
web-based Electronic OS/ARD Submission System (the ``e-OS System'') 
established under Rule G-36) are acceptable formats for purposes of the 
proposed rule change, so long as such files are printable. In addition, 
other file formats that are printable using commercially available 
software then in common usage in the municipal securities industry, or 
with software that is bundled with such files, also would be acceptable 
so long as the dealer that makes the delivery promptly delivers a 
substitute paper version of the official statement if the recipient of 
the electronic file so requests and a paper version has not previously 
been sent to such recipient.
    The electronic version of the official statement must include every 
item of information included in the paper version. For example, if a 
dealer were to consent to receiving solely an electronic version of the 
official statement pursuant to clause (c)(i)(C) of Rule G-32 but 
portions of the official statement are not available in electronic 
form, a managing or sole underwriter could not discharge its obligation 
to deliver paper versions of the official statement under clause 
(c)(i)(A) by sending the portions

[[Page 42605]]

of the official statement available in electronic form and separately 
forwarding a paper copy of those portions not available in electronic 
form. In the case where the entire official statement is not available 
in electronic format, the requirement to disseminate an electronic 
version upon request under clauses (c)(ii) and (c)(i)(C) would not 
apply. The MSRB generally would view an electronic version of an 
official statement to be available only where the issuer has prepared, 
authorized and delivered the version as a single electronic file, or 
where multiple files delivered as a single unit are clearly 
interconnected by hyperlinks or other clear method of organization that 
ensures that an investor viewing one file would be put on adequate 
notice that additional accompanying files must be accessed in order to 
review the official statement in its entirety.
    The proposed rule change also does not limit the manner of delivery 
of the electronic file. For example, the rule language permits the 
requesting dealer under clause (c)(i)(C) or an underwriter under clause 
(c)(ii) to provide an e-mail address or instructions for other forms of 
electronic delivery. An underwriter or dealer financial advisor should 
be able to meet this electronic delivery obligation in a number of 
different ways, including by posting the electronic version at an 
accessible Web site. At a minimum, any such form of passive delivery of 
the electronic version of the official statement must provide the 
recipient with timely notice that the official statement has been 
posted (e.g., by e-mail notice to the e-mail address provided by the 
requesting dealer), allow access to the document at no cost, permit the 
recipient to print and re-transmit the document (i.e., re-transmit a 
downloaded file of the document or permit the original recipient to 
forward to another dealer the information necessary to allow such other 
dealer to have access to the document equivalent to the access afforded 
to the original recipient), and ensure continued accessibility 
throughout the ``new issue disclosure period'' described below. The 
MSRB believes that best practice would entail transmission of the 
electronic version in a manner that would take advantage of the ability 
to make electronic files available substantially instantaneously or 
otherwise on demand, although certain technological limitations and 
variations among users would need to be taken into consideration in 
determining the best method for disseminating a particular document.\4\
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    \4\ For example, some e-mail systems limit the size of files 
that users are permitted to recieve, and some virus detection 
software settings can cause file attachments to e-mail messages to 
be deleted or quarantined. It would be the responsibility of a 
requesting dealer that provides an e-mail address for delivery of an 
electronic official statement by e-mail to ensure that is e-mail 
settings will permit any uninfected official statement file to be 
recieved.
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Dissemination of Electronic Official Statements by Financial Advisors

    Revised Rule G-32(c)(ii) applies to any dealer that acts as the 
issuer's financial advisor and prepares the official statement for the 
issuer. If an electronic version of the official statement has been 
prepared and the issuer does not object to its distribution, the dealer 
financial advisor is required to make available to the managing or sole 
underwriter (in addition to a printed version of the official 
statement) a printable electronic version of the official statement, 
upon request by the underwriter for such an electronic version and if 
the underwriter provides an e-mail address or other delivery 
instructions acceptable to the dealer financial advisor. However, if 
the managing or sole underwriter consents, the dealer financial advisor 
is permitted to provide such underwriter solely with the electronic 
official statement in lieu of paper copies otherwise required under the 
rule.

Redefining the Time Period of Official Statement Dissemination

    The proposed rule change deletes the definition of ``underwriting 
period'' in Rule G-32(d)(ii) and replaces it with the new term ``new 
issue disclosure period.'' The new issue disclosure period is defined 
as the period commencing with the first submission to an underwriter of 
an order for the purchase of new issue municipal securities or the 
purchase of such securities from the issuer, whichever first occurs, 
and ending 25 days after the final delivery by the issuer of the 
securities to or through the underwriting syndicate or sole 
underwriter. The definition of ``new issue municipal securities'' in 
Rule G-32(d)(i) is revised to mean municipal securities (other than 
commercial paper) that are sold by a dealer during the issue's new 
issue disclosure period.
    The proposed rule change makes related changes to Rules G-36 and G-
11. Clause (a)(iv) is added to Rule G-36 to include a reference to the 
definition of new issue disclosure period in Rule G-32(d)(ii), and 
section (d) of Rule G-36 is revised to provide that amendments to 
official statements made by the issuer during the new issue disclosure 
period must be sent to the MSRB by the underwriter within the required 
timeframe. The definition of underwriting period is removed from 
section (a) of Rule G-11 and the title of the rule is revised to more 
accurately reflect the subject of the rule.

Clarifying Amendment to Rule G-36

    The proposed rule change adds a definition of ``underwriter'' in 
new clause (a)(v) of Rule G-36, consisting of a cross-reference to the 
definition of that term provided in Rule 15c2-12 adopted by the SEC 
under the Act. The new language merely clarifies which definition 
applies to this term but does not change its meaning, since by virtue 
of Rule D-1,\5\ that term already has the same meaning as provided in 
Rule 15c2-12.
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    \5\ Rule D-1 states that, unless the context otherwise 
specifically requires, the terms used in MSRB rules have the 
respective meanings set forth in the Act and the rules of the SEC 
thereunder.
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2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2)(C) of the Act,\6\ which provides that the MSRB's 
rules shall:
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    \6\ 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, to remove 
impediments to and perfect the mechanism of a free and open market 
in municipal securities, and, in general, to protect investors and 
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the public interest.

    The MSRB believes that the proposed rule change increases the 
efficiency of official statement dissemination in the marketplace and 
the timeliness of official statement deliveries to customers.

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

    The MSRB does not believe that the proposed rule change will result 
in any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The MSRB published notices for comment on the draft amendments on 
May 12, 2004 (the ``May 2004 Notice'') \7\ and January 21, 2005 (the 
``January 2005

[[Page 42606]]

Notice'').\8\ The May 2004 Notice published for comment draft 
amendments to Rule G-32 and Rule G-36 (the ``original draft 
amendments''). In response to the May 2004 Notice, the MSRB received 
four comment letters. After reviewing the comments received in 
connection with the May 2004 Notice, the January 2005 Notice published 
for comment revised draft amendments to Rules G-32 and G-36, as well as 
to Rule G-11 (the ``revised draft amendments''). No comment letters 
were received in response to the January 2005 Notice. The language of 
the proposed rule change is identical to the language of the revised 
draft amendments, except that the proposed rule change also includes a 
clarifying amendment to Rule G-36(a)(v), as described above.
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    \7\ MSRB Notice 2004-12 (May 12, 2004).
    \8\ MSRB Notice 2005-06 (January 21, 2005).
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Discussion of Comments in Response to the May 2004 Notice

    In response to the May 2004 Notice, the Board received comment 
letters from Jed Bandes (``Bandes''),\9\ Conners & Co., Inc. 
(``Conners''), American Municipal Securities, Inc. (``AMS''), and The 
Bond Market Association (``BMA''). Three commentators (Bandes, Conners, 
and BMA) opposed the original draft amendments. The other commentator 
(AMS) did not state a position on most portions of the draft amendments 
but instead answers several questions posed in the notice. The comments 
are summarized and discussed below.
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    \9\ Mr. Bandes's comment consists of an e-mail stating ``I am 
against this rule'' without further elaboration. It is unclear which 
firm he represents.
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a. Dissemination of Electronic Official Statements Under Rule G-32
    The original draft amendments published in the May 2004 Notice 
would have required managing or sole underwriters to provide copies of 
both the paper and electronic version of the official statement to any 
dealers purchasing new issue municipal securities that request copies 
of the official statement. The original draft amendments also would 
have required dealers acting as financial advisors that prepare 
official statements to provide to the underwriters both paper and 
electronic versions of the official statement. These obligations to 
provide electronic versions would arise only if an electronic version 
had been prepared and the issuer did not object to its distribution. 
These obligations would not have been conditioned on a request having 
been made to receive the official statement in electronic form.
    Comments Received. Three commentators (Bandes, Conners, and BMA) 
opposed these requirements. Conners stated that, as a small dealer 
underwriting issues for small issuers, requiring dissemination of 
electronic versions of the official statement in addition to paper 
copies would ``make our costs unruly and would cut into our profits.'' 
In addition, Conners stated that passing the cost on to the firm's 
small issuer clients would be a burden. BMA also stated that the draft 
amendments would have been ``unduly burdensome'' to managing or sole 
underwriters. It observed that the MSRB's 1998 notice on electronic 
delivery of documents (the ``e-Document Notice'') \10\ sets forth 
``strict requirements for effective electronic delivery to dealers, 
customers and issuers * * * [that are] more arduous than those for 
paper delivery, and require extra controls on electronic delivery such 
as tracking confirmation of receipt. Also, email addresses for all 
dealers are not readily accessible.'' BMA suggested instead that 
electronic versions, if available, be required to be sent to a dealer 
only if the dealer specifically requests to receive one, in which case 
the requesting dealer can provide an e-mail address for delivery. It 
requested that the MSRB review the e-Document Notice ``in light of 
technological advances in order to reduce the extra burdens on 
electronic delivery of documents over paper delivery and to further 
encourage use of electronic communications.''
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    \10\ See Rule G-32 Interpretation--Notice Regarding Electronic 
Delivery and Receipt of Information by Brokers, Dealers and 
Municipal Securities Dealers (November 20, 1998), reprinted in MSRB 
Rule Book.
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    BMA also stated that it is already the accepted practice for dealer 
financial advisors to provide electronic versions of official 
statements to the underwriters and that the MSRB should not impose a 
regulatory requirement to this effect. It further stated that such a 
requirement would create a new burden of ``necessary recordkeeping for 
compliance purposes'' without furthering the goals of the draft 
amendments.
    MSRB Response. The MSRB observes that the proposed requirements 
would not have obligated any dealer to create an electronic version of 
the official statement but instead would have merely required the 
dissemination of any such electronic official statement already created 
by or on behalf of the issuer. As such, dealers would not have been 
burdened with costs of production, although some minimal costs may have 
been entailed with respect to the transmittal of such documents and 
with ensuring that the sender's method of transmittal was compatible 
with the recipient's method of receipt, depending on the method chosen.
    In addition, the MSRB notes that the e-Document Notice generally 
permits a dealer to fulfill a regulatory delivery obligation 
electronically if the dealer provides adequate notice of delivery, the 
electronic means provides access to information comparable to the paper 
version, and the dealer has reason to believe that electronic delivery 
will be effective. As noted in the e-Document Notice, this three-part 
requirement is not the only method by which legal delivery by 
electronic means can be accomplished. In particular, where MSRB rules 
provide different requirements for undertaking electronic 
communications, the e-Document Notice concluded that compliance with 
those rule-based requirements would satisfy the rule requirement even 
if the three-part test of the e-Document Notice is not fully met.
    The MSRB believed that modifying the original draft amendments to 
require delivery to dealers of electronic official statements only if 
the dealer explicitly requests an electronic version would be an 
appropriate first step toward the ultimate goal of having electronic 
versions generally available and routinely used for more rapid 
dissemination of disclosure in the marketplace. The proposed rule 
change requires a requesting dealer to provide an e-mail address to 
which the electronic version could be sent or other instructions 
acceptable to the managing or sole underwriter for electronic delivery. 
Similarly, the MSRB believed that modifying the original draft 
amendments to require dealer financial advisors to provide to the 
underwriters electronic official statements only if the managing or 
sole underwriter explicitly requests an electronic version and provides 
an e-mail address or instructions acceptable to the dealer financial 
advisor for electronic delivery would be appropriate. Neither provision 
requires the dealer to create an electronic version for purposes of 
meeting these requirements if the issuer has not produced an electronic 
version.\11\ In both cases, compliance with these provisions with the 
proposed rule change would fully satisfy the inter-dealer delivery 
requirement for purposes of the e-Document Notice.
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    \11\ In particular, where a dealer acting as financial advisor 
prepares an official statemetn on behalf of the issuer, the decision 
to produce an electronic version remains a matter for agreement 
between the issuer and the financial advisor.
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    Although the proposed rule change would permit the underwriter to 
forego

[[Page 42607]]

delivering a paper version of the official statement to a dealer if the 
dealer consents, this provision would not affect the obligation of a 
dealer selling a new issue municipal security to a customer to deliver 
a paper copy of the official statement to the customer unless the 
dealer has taken the necessary steps described in the e-Document Notice 
in connection with the delivery of the electronic version to customers. 
Where delivery in paper form to a customer is required, the selling 
dealer would either need to obtain a paper copy of the official 
statement or would need to print a copy from its electronic version. 
Furthermore, the revised draft amendments also would permit a dealer 
financial advisor to make available solely an electronic version of the 
official statement to the managing or sole underwriter with such 
underwriter's consent. Underwriters that agree to receive only an 
electronic version of the official statement from the dealer financial 
advisor and that become obligated to deliver a paper version to another 
dealer or to a customer would need to print a copy from their 
electronic version.
    The MSRB notes that the e-Document Notice was based on an 
interpretive release published by the SEC in 1996.\12\ The e-Document 
Notice provided guidance on the use of electronic media to satisfy 
document delivery requirements under MSRB rules in a manner consistent 
with how other sectors of the securities markets handle delivery of 
required information through electronic media. The MSRB will take the 
request to review the e-Document Notice under advisement, particularly 
in light of the recent publication by the SEC of its securities 
offering reform proposal that includes significant modifications to the 
SEC's approach to the use of electronic media under its rules.\13\
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    \12\ See Securities Act Release No. 7288 (May 9, 1996), 61 FR 
24644 (May 15, 1996).
    \13\ See Securities Act Release No. 8501 (November 3, 2004), 69 
FR 67392 (November 17, 2004).
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b. Redefining the Time Period of Official Statement Dissemination
    Under current Rule G-32, the underwriting period for a new issue 
generally ends when the underwriting syndicate (or the sole 
underwriter) has sold out the issue, but no earlier than the issuer's 
delivery of the issue to the underwriters. The duties imposed on 
dealers by current Rule G-32 (including but not limited to the 
obligation to deliver official statements to new issue customers) only 
extend to municipal securities sold during the underwriting period. 
However, the duration the underwriting period may not be definitively 
known by most market participants since underwriters currently do not 
always inform the marketplace of when the issue has been sold out. The 
original draft amendments to Rule G-32 published in the May 2004 Notice 
would have included a new clause (i)(D) requiring the managing or sole 
underwriter of a new issue of municipal securities to inform promptly, 
upon request, any dealer purchasing such securities during the 
underwriting period and during the 60 days following the end of the 
underwriting period whether the underwriting period has ended. In the 
May 2004 Notice, the MSRB also sought comment on whether the original 
draft amendments should instead amend the definition of underwriting 
period to establish a fixed time period (e.g., 60 days after bond 
closing) during which the provisions of Rule G-32 apply.
    Comments Received. Two commentators (AMS and BMA) agreed that a 
formulation based on a fixed number of days after the bond closing date 
would better achieve the goal of improved compliance.\14\ AMS stated 
that a period of 60 days after closing is appropriate. BMA suggested a 
time period of 30 days after the closing, noting that ``[m]aking the 
end of the underwriting period a readily ascertainable date calculated 
from the issue date of the securities will not only make it easier for 
brokers, dealers and municipal securities dealers to ensure compliance 
with Rule G-32, but will also simplify audits on and enforcement of 
Rule G-32.''
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    \14\ As noted above, Bandes simply stated that he was ``against 
this rule'' without elaboration.
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    MSRB Response. The MSRB believes that establishing a fixed end date 
for the obligations arising under Rule G-32 would be appropriate since 
this would provide an unambiguous timeframe for delivery of new issue 
disclosures to customers. The proposed rule change would provide in 
Rule G-32(d)(ii) that this obligation would end 25 days after the final 
delivery by the issuer of new issue municipal securities to or through 
the underwriters.\15\
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    \15\ The MSRB has proposed a 25-day period since this timeframe 
should coincide in most primary offerings to the period during which 
underwriters are required to send the final official statement to 
potential customers under SEC Rule 15c2-12(b)(4).
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    In conjunction with this change, the proposed rule change would 
discontinue the use of the term ``underwriting period'' under MSRB 
rules and replace it with the term ``new issue disclosure period.'' 
This change would more clearly reflect the actual usage of the term 
under MSRB rules and would help to eliminate certain ambiguities 
regarding the use of the term underwriting period within the municipal 
securities industry.\16\ Currently, the underwriting period is defined 
in two separate rules--Rules G-11 and G-32--depending upon whether 
there is a syndicate or a sole underwriter. The proposed rule change 
would delete the definition of underwriting period in Rule G-11(a)(ix) 
\17\ and would replace the definition of underwriting period in Rule G-
32(d)(ii) with the new definition of new issue disclosure period. ``New 
issue disclosure period'' would mean the period commencing with the 
first submission to an underwriter of an order for the purchase of new 
issue municipal securities or the purchase of such securities from the 
issuer, whichever first occurs, and ending 25 days after the final 
delivery by the issuer of the securities of the issue to or through the 
underwriting syndicate or sole underwriter (i.e., 25 days after the 
closing).\18\ Rule G-36 would be amended to replace the current 
reference to underwriting period with a reference to the new issue 
disclosure period in section (d) and to add a cross-reference to the 
new definition in clause (a)(iv).
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    \16\ For example, the term ``end of the underwriting period'' in 
SEC Rule 15c2-12(f)(2) has a different meaning for sole underwriters 
than under the definition of underwriting period in current Rule G-
32(d)(B). In addition, the MSRB has learned that many market 
participants have come to use the term underwriting period to mean 
different aspects of the underwriting process unrelated to the use 
of this term under MSRB rules.
    \17\ In addition, the title of Rule G-11 would be amended from 
``Sales of New Issue Municipal Securities During the Underwriting 
Period'' to ``New Issue Syndicate Practices.''
    \18\ The continuous nature of the offerings of municipal fund 
securities (e.g., interests in 529 college savings plans) would mean 
that no final delivery occurs so long as the issuer continues to 
offer such securities, resulting in all sales of municipal fund 
securities being treated as occurring during the new issue 
disclosure period. Thus, delivery of an official statement would be 
required for every sale of municipal fund securities under the 
revised draft amendments, just as is required under current Rule G-
31. See Rule D-12 Interpretation--Interpretation Relating to Sales 
of Municipal Fund Securities in the Primary Market (January 18, 
2001). reprinted in MSRB Rule Book.
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    In virtually all cases, the newly defined ``new issue disclosure 
period'' would extend the period during which official statements are 
required to be delivered to customers beyond the period currently 
required under the existing definition of underwriting period. The 
amendment also would have an impact on the application of Rule G-36(d) 
in that the period during which stickers or amendments to official 
statements must be submitted by

[[Page 42608]]

the underwriter to the MSRB would be similarly modified.
c. Submission of Official Statements to the MSRB Under Rule G-36
    The original draft amendments to Rule G-36 published in the May 
2004 Notice would have provided alternative timeframes for complying 
with the official statement submission requirements for primary 
offerings subject to SEC Rule 15c2-12, based on when the issues close. 
Thus, an underwriter would have been permitted to comply with Rule G-36 
by sending the official statement to the MSRB by no later than five 
business days prior to the bond closing (or three business days prior 
to closing if submitted electronically through the e-OS System). Even 
if an underwriter were to fail to meet the proposed new timeframes, it 
would still comply with Rule G-36 if it met the original timeframe of 
ten business days after the sale date, but no later than one business 
day after receipt from the issuer, as provided under Rule G-36(b)(i). 
The original draft amendments were designed to promote the availability 
of official statements in the marketplace in advance of bond closing 
and to encourage the use of electronic means for disseminating official 
statements in a more timely and efficient manner while at the same time 
reducing the incidence of technical rule violations that did not raise 
investor protection concerns.
    Comments Received. AMS supported the amendment, stating, ``The idea 
of changing the requirement to define submission no later than five or 
three days prior to the settlement date as timely is appropriate.'' AMS 
also suggested eliminating the existing timeframe for compliance based 
on submission of official statements within 10 business days of the 
sale date.
    Bandes stated it was against the rule, while BMA stated that, 
although it ``applauds the MSRB's efforts to promote the availability 
of official statements in the marketplace,'' it suggested that the MSRB 
not amend Rule G-36 at this time. BMA stated that it is ``concerned 
that these alternative timeframes will serve to frustrate good faith 
efforts to comply with Rule G-36'' and believed that they would ``cause 
unnecessary confusion amongst dealers.'' BMA further noted that ``time 
periods between sale and issue dates appear to have been decreasing. It 
is not uncommon to have an issue date be the very day after the sale 
date, particularly for variable rate issues. Therefore the use of this 
proposed alternative timeframe is likely to be low.'' \19\ BMA 
concluded that ``[t]he current uniform rule based on sale date covering 
both paper and electronic delivery of official statements is easier for 
compliance and audit purposes.''
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    \19\ The MSRB notes, however, that the original draft amendments 
to Rule G-36 would not have applied to many such variable rate 
issues, which are often exempt from SEC Rule 15c2-12 and therefore 
are governed by a different provision of Rule G-36. Instead, the 
rule proposal would have provided some relief for issues having 
extend settlement periods of other unusual features.
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    MSRB Response. The MSRB has determined not to take action on the 
original draft amendments to Rule G-36 at this time but will continue 
to closely monitor the official statement dissemination process.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-MSRB-2005-13 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.
    All submissions should refer to File Number SR-MSRB-2005-13. 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 (https://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 inspection 
and copying in the Commission's Public Reference Room. 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-2005-13 and should be submitted on or before August 15, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-3944 Filed 7-22-05; 8:45 am]
BILLING CODE 8010-01-P