Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of Amendment No. 2 to Proposed Rule Change Relating to Definition of Solicitation Under MSRB Rules G-37 and G-38, 26575-26577 [E6-6804]
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Federal Register / Vol. 71, No. 87 / Friday, May 5, 2006 / Notices
Section 141 of the Amex Company
Guide provides that an annual fee of
$3,500 is payable in January of each
year for Bonds and Debentures. The
Exchange notes that its Bonds and
Debentures are primarily structured
products (e.g., notes with returns tied to
the performance of an underlying index,
basket of commodities, etc.). The
increased annual fees will be applicable
to Bonds and Debentures currently
listed as well as new listings. The
increased fees will be assessed
commencing January 2007. Beginning
January 2007, the increased fees will be
payable by all issuers of Bonds and
Debentures.
The Exchange asserts that the
proposed fee increase will allow Amex
to better recoup its costs in connection
with the delivery of services relating to
the trading of Bonds and Debentures.
The Exchange believes that the
proposed increase in annual fees will
provide approximately $250,000 of
additional revenue to Amex for the 2007
calendar year.
The Exchange notes that the
analogous New York Stock Exchange
LLC (‘‘NYSE’’) and NYSE Arca, L.L.C.
(‘‘NYSE Arca Marketplace’’) fees
applicable to structured products and
The Nasdaq Stock Market, Inc. fees
applicable to other securities are $5,000,
$5,000 and $15,000, respectively.6
Accordingly, Amex believes that the
proposed fee increase will have a
minimal impact on volume but will
provide additional revenue needed for
the Exchange to effectively compete.
The Exchange notes that in recent
years it has revised a number of fees to
better align its fees with the actual cost
of delivering services.7 Amex believes
that the increased fees will help to
allocate to those market participants
trading in Bonds and Debentures a fair
share of the related costs of offering
such products.
2. Statutory Basis
The Exchange believes that the
proposal is equitable as required by
Section 6(b)(4) of the Act.8 The
Exchange notes that charging an
cchase on PROD1PC60 with NOTICES
6 See
18:48 May 04, 2006
Jkt 208001
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that the
proposed rule change will not impose
any burden on competition that is 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
No written comments were solicited
or received with respect to the proposed
rule change.
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 Exchange consents,
the Commission will:
(A) By order approve such proposed
rule change, as amended, or
(B) Institute proceedings to determine
whether the proposed rule change, as
amended, 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, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic Comments
NYSE Listed Company Manual Section
902.05 (Fees for Listing Structured Products); NYSE
Arca Marketplace Annual Listing Maintenance Fee
for Structured Products; NASD Rule 4530(b) (Other
Securities, Annual Fee).
7 See Securities Exchange Act Release No. 45360
(January 29, 2002), 67 FR 5626 (February 6, 2002);
Securities Exchange Act Release No. 44286 (May 9,
2001), 66 FR 27187 (May 16, 2001).
8 15 U.S.C. 78f(b)(4). Section 6(b)(4) of the Act
states that the rules of a national securities
exchange must provide for ‘‘the equitable allocation
of reasonable dues, fees, and other charges among
its members and issuers and other persons using its
facilities.’’
VerDate Aug<31>2005
increased annual fee commencing
January 2007 to issuers of Bonds and
Debentures is reasonable given the
competitive pressures in the industry.
Accordingly, the Exchange seeks
through this proposal to better align its
transaction charges with the cost of
providing products.
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–Amex–2006–20 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Amex–2006–20. This file
PO 00000
Frm 00127
Fmt 4703
Sfmt 4703
26575
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 the filing also will be
available for inspection and copying at
the principal office of the Exchange. 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–Amex–2006–20 and should
be submitted on or before May 26, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Nancy M. Morris,
Secretary.
[FR Doc. E6–6777 Filed 5–4–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53747; File No. SR–MSRB–
2005–11]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing of Amendment
No. 2 to Proposed Rule Change
Relating to Definition of Solicitation
Under MSRB Rules G–37 and G–38
May 1, 2006.
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 March 17,
2006, the Municipal Securities
Rulemaking Board (‘‘MSRB’’ or
‘‘Board’’) filed with the Securities and
Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) Amendment No. 2 to
the proposed rule change as described
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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05MYN1
26576
Federal Register / Vol. 71, No. 87 / Friday, May 5, 2006 / Notices
in Items I, II, and III below, which Items
have been substantially prepared by the
MSRB. The proposed rule change,
incorporating Amendment No. 1 (the
‘‘original proposed rule change’’), was
published for comment in the Federal
Register on December 20, 2005.3 The
Commission received one comment
letter regarding the proposal.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as amended by Amendment No.
2, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
In response to comments on the
original proposal, the MSRB is
proposing Amendment No. 2 to the
original proposed rule change. The
original proposed rule change consists
of an interpretive notice relating to the
definition of solicitation for purposes of
Rule G–37, on political contributions
and prohibitions of municipal securities
business, and Rule G–38, on solicitation
of municipal securities business. The
original proposed rule change, as
amended by Amendment No. 2, is
hereinafter referred to as the
‘‘Solicitation Guidance.’’ The text of
Amendment No. 2 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. The discussion section of this
notice focuses on the changes made in
Amendment No. 2. For an explanation
of the original proposed rule change, see
the release cited in footnote 3.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
cchase on PROD1PC60 with NOTICES
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.
3 See Securities Exchange Act Release No. 52948
(December 13, 2005), 70 FR 75514.
4 See letter to Jonathan G. Katz, Secretary,
Commission, from Leslie M. Norwood, Vice
President and Assistant General Counsel, The Bond
Market Association, dated January 10, 2006.
VerDate Aug<31>2005
18:48 May 04, 2006
Jkt 208001
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The MSRB previously filed the
original proposed rule change to
provide guidance on the definition of
‘‘solicitation’’ as used in Rules G–37 and
G–38. Among other things, the original
proposed rule change incorporated, by
means of footnote 2 thereof and the text
accompanying such footnote, guidance
on the meaning of solicitation under
Rule G–37 previously provided in
certain Question and Answer
interpretations (the ‘‘Rule G–37
solicitation Qs&As’’). In response to
comments received by the Commission
from a commentator on the original
proposed rule change,5 the MSRB has
determined to file Amendment No. 2
and simultaneously withdraw the Rule
G–37 solicitation Qs&As. The MSRB has
also determined to withdraw
simultaneously obsolete guidance
previously provided in Question and
Answer interpretations under former
Rule G–38 relating to consultants (the
‘‘former Rule G–38 Qs&As’’) since, as a
result of the adoption of current Rule G–
38 in 2005, the consultant provisions to
which the former Rule G–38 Qs&As
relate have been superseded and are no
longer in effect.6
The commentator on the original
proposed rule change stated that, in
certain respects, the guidance on
solicitation and related matters
provided in the original proposed rule
change may not be wholly consistent
with guidance previously provided by
the MSRB and that such prior guidance
should be withdrawn. The commentator
noted in particular an apparent
inconsistency between the original
proposed rule change and a former Rule
G–38 Q&A published on March 4, 1999
relating to circumstances where joint
ventures between dealers might give rise
to one of the dealers being considered
a consultant under former Rule G–38.
The MSRB agrees that it would be
appropriate to consolidate its guidance
on the definition of solicitation for
purposes of Rules G–37 and G–38 in the
Solicitation Guidance and therefore is
filing Amendment No. 2. Amendment
No. 2 deletes the footnote in the original
proposed rule change referencing the
Rule G–37 Solicitation Qs&As (which
are being withdrawn in the companion
proposed rule change) and instead
5 See
supra note 4.
File No. SR–MSRB–2006–1 relating to the
withdrawal of the Rule G–37 solicitation Qs&As
and the former Rule G–38 Qs&As (the ‘‘companion
proposed rule change’’).
6 See
PO 00000
Frm 00128
Fmt 4703
Sfmt 4703
inserts the substantive language of such
Qs&As into the text of the Solicitation
Guidance. Amendment No. 2 and the
withdrawal of the Rule G–37 solicitation
Qs&As and former Rule G–38 Qs&As do
not effect a substantive change in the
MSRB’s guidance on the definition of
solicitation as set forth in the original
proposed rule change.
With respect to the commentator’s
discussion of former Rule G–38 Q&A of
March 4, 1999, the range of
professionals covered by the final
paragraph of the Solicitation Guidance
relating to communications by nonaffiliated professionals is broader than
the range of professionals previously
designated within an exception to the
definition of consultant under former
Rule G–38.7 Such professionals would
not be subject to current Rule G–38
under the Solicitation Guidance only so
long as they are not being paid directly
or indirectly by the dealer for
communicating with an issuer for the
purpose of obtaining or retaining
municipal securities business for the
dealer (i.e., the professionals are paid
solely for the provision of professional
services with respect to the business).
Professional services provided by a nonaffiliated person in connection with
municipal securities business for which
payments may be made under the final
paragraph of the Solicitation Guidance
must in fact constitute bona fide
services and not be illusory in nature.
Finally, the MSRB notes that the
application of the Solicitation Guidance
is dependent upon the specific facts and
circumstances and the MSRB has no
opinion on how the Solicitation
Guidance would be applied in any
particular scenario.
2. Statutory Basis
The MSRB believes that the proposed
rule change, as amended by
Amendment No. 2, is consistent with
Section 15B(b)(2)(C) of the Act,8 which
provides that the MSRB’s rules shall:
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
7 Former Rule G–38 identified only those persons
providing legal, accounting or engineering advice as
qualifying for the exception under appropriate
conditions, whereas the Solicitation Guidance
identifies those non-affiliated persons providing
legal, accounting, engineering or other professional
services as not being subject to current Rule G–38
under appropriate conditions.
8 15 U.S.C. 78o–4(b)(2)(C).
E:\FR\FM\05MYN1.SGM
05MYN1
Federal Register / Vol. 71, No. 87 / Friday, May 5, 2006 / Notices
general, to protect investors and the public
interest.
The MSRB believes that the original
proposed rule change, as amended by
Amendment No. 2, is consistent with
the Act because it will further investor
protection and the public interest by
ensuring that dealers understand their
obligations under MSRB rules designed
to maintain standards of fair practice
and professionalism, thereby helping to
maintain public trust and confidence in
the integrity of the municipal securities
market.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The MSRB does not believe that the
original proposed rule change, as
amended by Amendment No. 2, will
result in any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
since it would apply equally to all
dealers.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments on Amendment
No. 2 were neither solicited nor
received.
cchase on PROD1PC60 with NOTICES
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.
The MSRB has requested accelerated
approval of the proposed rule change.
The Commission is not granting
accelerated approval at this time in
order to allow interested persons to
comment on this proposal and on the
companion proposed rule change
relating to the withdrawal of obsolete
Question-and-Answer Interpretive
Guidance under former Rule G–38, on
consultants, and certain Question-andAnswer Interpretive Guidance relating
to the definition of ‘‘solicitation’’ under
Rule G–37, on political contributions
and prohibition on municipal securities
VerDate Aug<31>2005
18:48 May 04, 2006
Jkt 208001
business.9 The MSRB also requested
that the Commission approve
Amendment No. 2 and the original
proposed rule change simultaneously
with the companion proposed rule
change. The Commission expects to
consider these proposals simultaneously
after the close of their respective
comment periods.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, 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 rulecomments@sec.gov. Please include File
Number SR–MSRB–2005–11 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–MSRB–2005–11. 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–
9 See
PO 00000
File No. SR–MSRB–2006–01.
Frm 00129
Fmt 4703
Sfmt 4703
26577
2005–11 and should be submitted on or
before May 26, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Nancy M. Morris,
Secretary.
[FR Doc. E6–6804 Filed 5–4–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53746; File No. SR–MSRB–
2006–01]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing of Proposed
Rule Change and Amendment No. 1
Relating to Withdrawal of Obsolete
Question-and-Answer Interpretive
Guidance Under Former Rule G–38, on
Consultants, and Certain Questionand-Answer Interpretive Guidance
Relating to the Definition of
‘‘Solicitation’’ Under Rule G–37, on
Political Contributions and
Prohibitions on Municipal Securities
Business
May 1, 2006.
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 March 28,
2006, 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. On April 20,
2006, the MSRB filed Amendment
No. 1 to the proposed rule change.3 The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as amended, from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The MSRB is filing with the
Commission a proposed rule change to
delete obsolete Question-and-Answer
(‘‘Q&A’’) interpretive guidance under
former Rule G–38, on consultants, and
certain Q&A interpretive guidance
relating to the definition of
‘‘solicitation’’ under Rule G–37, on
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Amendment No. 1 deletes one additional Q&A
providing interpretive guidance under Rule G–37
and former Rule G–38.
1 15
E:\FR\FM\05MYN1.SGM
05MYN1
Agencies
[Federal Register Volume 71, Number 87 (Friday, May 5, 2006)]
[Notices]
[Pages 26575-26577]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-6804]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53747; File No. SR-MSRB-2005-11]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing of Amendment No. 2 to Proposed Rule Change
Relating to Definition of Solicitation Under MSRB Rules G-37 and G-38
May 1, 2006.
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 March 17, 2006, the Municipal Securities Rulemaking Board (``MSRB''
or ``Board'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') Amendment No. 2 to the proposed rule change
as described
[[Page 26576]]
in Items I, II, and III below, which Items have been substantially
prepared by the MSRB. The proposed rule change, incorporating Amendment
No. 1 (the ``original proposed rule change''), was published for
comment in the Federal Register on December 20, 2005.\3\ The Commission
received one comment letter regarding the proposal.\4\ The Commission
is publishing this notice to solicit comments on the proposed rule
change, as amended by Amendment No. 2, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 52948 (December 13,
2005), 70 FR 75514.
\4\ See letter to Jonathan G. Katz, Secretary, Commission, from
Leslie M. Norwood, Vice President and Assistant General Counsel, The
Bond Market Association, dated January 10, 2006.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
In response to comments on the original proposal, the MSRB is
proposing Amendment No. 2 to the original proposed rule change. The
original proposed rule change consists of an interpretive notice
relating to the definition of solicitation for purposes of Rule G-37,
on political contributions and prohibitions of municipal securities
business, and Rule G-38, on solicitation of municipal securities
business. The original proposed rule change, as amended by Amendment
No. 2, is hereinafter referred to as the ``Solicitation Guidance.'' The
text of Amendment No. 2 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. The discussion section of this notice focuses on
the changes made in Amendment No. 2. For an explanation of the original
proposed rule change, see the release cited in footnote 3.
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 previously filed the original proposed rule change to
provide guidance on the definition of ``solicitation'' as used in Rules
G-37 and G-38. Among other things, the original proposed rule change
incorporated, by means of footnote 2 thereof and the text accompanying
such footnote, guidance on the meaning of solicitation under Rule G-37
previously provided in certain Question and Answer interpretations (the
``Rule G-37 solicitation Qs&As''). In response to comments received by
the Commission from a commentator on the original proposed rule
change,\5\ the MSRB has determined to file Amendment No. 2 and
simultaneously withdraw the Rule G-37 solicitation Qs&As. The MSRB has
also determined to withdraw simultaneously obsolete guidance previously
provided in Question and Answer interpretations under former Rule G-38
relating to consultants (the ``former Rule G-38 Qs&As'') since, as a
result of the adoption of current Rule G-38 in 2005, the consultant
provisions to which the former Rule G-38 Qs&As relate have been
superseded and are no longer in effect.\6\
---------------------------------------------------------------------------
\5\ See supra note 4.
\6\ See File No. SR-MSRB-2006-1 relating to the withdrawal of
the Rule G-37 solicitation Qs&As and the former Rule G-38 Qs&As (the
``companion proposed rule change'').
---------------------------------------------------------------------------
The commentator on the original proposed rule change stated that,
in certain respects, the guidance on solicitation and related matters
provided in the original proposed rule change may not be wholly
consistent with guidance previously provided by the MSRB and that such
prior guidance should be withdrawn. The commentator noted in particular
an apparent inconsistency between the original proposed rule change and
a former Rule G-38 Q&A published on March 4, 1999 relating to
circumstances where joint ventures between dealers might give rise to
one of the dealers being considered a consultant under former Rule G-
38.
The MSRB agrees that it would be appropriate to consolidate its
guidance on the definition of solicitation for purposes of Rules G-37
and G-38 in the Solicitation Guidance and therefore is filing Amendment
No. 2. Amendment No. 2 deletes the footnote in the original proposed
rule change referencing the Rule G-37 Solicitation Qs&As (which are
being withdrawn in the companion proposed rule change) and instead
inserts the substantive language of such Qs&As into the text of the
Solicitation Guidance. Amendment No. 2 and the withdrawal of the Rule
G-37 solicitation Qs&As and former Rule G-38 Qs&As do not effect a
substantive change in the MSRB's guidance on the definition of
solicitation as set forth in the original proposed rule change.
With respect to the commentator's discussion of former Rule G-38
Q&A of March 4, 1999, the range of professionals covered by the final
paragraph of the Solicitation Guidance relating to communications by
non-affiliated professionals is broader than the range of professionals
previously designated within an exception to the definition of
consultant under former Rule G-38.\7\ Such professionals would not be
subject to current Rule G-38 under the Solicitation Guidance only so
long as they are not being paid directly or indirectly by the dealer
for communicating with an issuer for the purpose of obtaining or
retaining municipal securities business for the dealer (i.e., the
professionals are paid solely for the provision of professional
services with respect to the business). Professional services provided
by a non-affiliated person in connection with municipal securities
business for which payments may be made under the final paragraph of
the Solicitation Guidance must in fact constitute bona fide services
and not be illusory in nature. Finally, the MSRB notes that the
application of the Solicitation Guidance is dependent upon the specific
facts and circumstances and the MSRB has no opinion on how the
Solicitation Guidance would be applied in any particular scenario.
---------------------------------------------------------------------------
\7\ Former Rule G-38 identified only those persons providing
legal, accounting or engineering advice as qualifying for the
exception under appropriate conditions, whereas the Solicitation
Guidance identifies those non-affiliated persons providing legal,
accounting, engineering or other professional services as not being
subject to current Rule G-38 under appropriate conditions.
---------------------------------------------------------------------------
2. Statutory Basis
The MSRB believes that the proposed rule change, as amended by
Amendment No. 2, is consistent with Section 15B(b)(2)(C) of the Act,\8\
which provides that the MSRB's rules shall:
---------------------------------------------------------------------------
\8\ 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
[[Page 26577]]
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general, to protect investors and the public interest.
The MSRB believes that the original proposed rule change, as amended by
Amendment No. 2, is consistent with the Act because it will further
investor protection and the public interest by ensuring that dealers
understand their obligations under MSRB rules designed to maintain
standards of fair practice and professionalism, thereby helping to
maintain public trust and confidence in the integrity of the municipal
securities market.
B. Self-Regulatory Organization's Statement on Burden on Competition
The MSRB does not believe that the original proposed rule change,
as amended by Amendment No. 2, will result in any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act since it would apply equally to all dealers.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments on Amendment No. 2 were neither solicited nor
received.
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.
The MSRB has requested accelerated approval of the proposed rule
change. The Commission is not granting accelerated approval at this
time in order to allow interested persons to comment on this proposal
and on the companion proposed rule change relating to the withdrawal of
obsolete Question-and-Answer Interpretive Guidance under former Rule G-
38, on consultants, and certain Question-and-Answer Interpretive
Guidance relating to the definition of ``solicitation'' under Rule G-
37, on political contributions and prohibition on municipal securities
business.\9\ The MSRB also requested that the Commission approve
Amendment No. 2 and the original proposed rule change simultaneously
with the companion proposed rule change. The Commission expects to
consider these proposals simultaneously after the close of their
respective comment periods.
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\9\ See File No. SR-MSRB-2006-01.
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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, as amended, 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-2005-11 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-MSRB-2005-11. 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-2005-11 and should be submitted on or before May 26, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-6804 Filed 5-4-06; 8:45 am]
BILLING CODE 8010-01-P