Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of Proposed Rule Change Relating to the Establishment of a Pilot Phase of Its Upcoming Continuing Disclosure Service of the Electronic Municipal Market Access system (EMMA®), 15530-15533 [E9-7583]
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Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices
100 F Street, NE., Washington, DC
20549–1090.
SECURITIES AND EXCHANGE
COMMISSION
All submissions should refer to File
Number SR–CBOE–2009–022. 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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
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–CBOE–2009–022 and
should be submitted on or before April
27, 2009.
[Release No. 34–59643; File No. SR–MSRB–
2009–03]
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–7663 Filed 4–3–09; 8:45 am]
BILLING CODE 8010–01–P
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing of Proposed
Rule Change Relating to the
Establishment of a Pilot Phase of Its
Upcoming Continuing Disclosure
Service of the Electronic Municipal
Market Access system (EMMA®)
March 27, 2009.
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 25,
2009, the Municipal Securities
Rulemaking Board (‘‘MSRB’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been substantially prepared by the
MSRB. The Commission is publishing
this notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The MSRB has filed with the
Commission a proposed rule change to
establish a pilot phase (the ‘‘continuing
disclosure pilot’’) of the continuing
disclosure service of the MSRB’s
Electronic Municipal Market Access
system (‘‘EMMA’’). The continuing
disclosure pilot would receive
electronic submissions of, and would
make publicly available on the Internet,
continuing disclosure documents and
related information voluntarily
submitted by issuers, obligated persons
and their agents. The MSRB has
requested approval of the continuing
disclosure pilot to commence operation
on May 11, 2009, or such later date as
may be announced by the MSRB in a
notice published on the MSRB Web site,
which date shall be no later than 30
days after Commission approval of the
proposed rule change. In addition, the
MSRB has requested approval of the
continuing disclosure pilot for a period
ending on July 1, 2009.3
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The Commission has previously approved the
establishment of the continuing disclosure service
of EMMA, which will commence operation on July
1, 2009. See Securities Exchange Act Release No.
59061 (December 5, 2008), 73 FR 75778 (December
12, 2008) (File No. SR–MSRB–2008–05) (approving
the continuing disclosure service of EMMA with an
effective date of July 1, 2009). The EMMA
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2 17
7 17
CFR 200.30–3(a)(12).
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The text of the proposed rule change
is available on the MSRB’s Web site
(https://www.msrb.org/msrb1/sec.asp), 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 would
establish a pilot phase of the continuing
disclosure service of EMMA to provide,
pending the commencement of
operation of the permanent EMMA
continuing disclosure service on July 1,
2009, for the voluntary electronic
submission to the MSRB of continuing
disclosure documents and related
information by issuers, obligated
persons and their agents and to provide
for the free public access to such
documents through the EMMA portal.4
Under Exchange Act Rule 15c2–
12(b)(5), an underwriter for a primary
offering of municipal securities subject
to the rule currently is prohibited from
underwriting the offering unless the
underwriter has determined that the
issuer or an obligated person for whom
financial information or operating data
is presented in the final official
statement, or a designated agent, has
undertaken in writing to provide certain
continuing disclosure service is designed to
commence operation simultaneously with the
effectiveness of certain amendments to Exchange
Act Rule 15c2–12 adopted by the Commission. See
Securities Exchange Act Release No. 59062
(December 5, 2008), 73 FR 76104 (December 15,
2008) (adopting amendments to Exchange Act Rule
15c2–12).
4 The EMMA portal began operation on March 31,
2008 as a pilot facility and is accessible at https://
emma.msrb.org. See Securities Exchange Act
Release No. 57577 (March 28, 2008), 73 FR 18022
(April 2, 2008) (File No. SR–MSRB–2007–06)
(approving operation of the EMMA pilot to provide
free public access to the MSIL system collection of
official statements and advance refunding
documents and to the MSRB’s Real-Time
Transaction Reporting System historical and realtime transaction price data) (the ‘‘EMMA portal
pilot filing’’).
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items of information to the
marketplace.5 The items to be provided
include: (A) Annual financial
information concerning obligated
persons; (B) audited financial
statements for obligated persons if
available and if not included in the
annual financial information; (C) notices
of certain events, if material; and (D)
notices of failures to provide annual
financial information on or before the
date specified in the written
undertaking. The written agreement
shall identify each obligated person or
other person for whom information is to
be provided, either by name or by an
objective criteria for selecting such
person, and also shall specify (i) the
type of information to be included in
the annual financial information, (ii) the
accounting principles pursuant to
which financial statements will be
prepared and whether such financial
statements will be audited, and (iii) the
date on which the annual financial
information will be provided.
The pilot phase of the EMMA
continuing disclosure service would
accept voluntary submissions of
continuing disclosure documents,
including but not limited to items to be
provided pursuant to Exchange Act Rule
15c2–12. Submissions of continuing
disclosure documents to the pilot phase
of the EMMA continuing disclosure
service would be made solely in
electronic format by issuers, obligated
persons and their agents through a
secured, password-protected, Webbased interface with EMMA. Such
submissions would be made as portable
document format (PDF) files,
accompanied by related indexing
information, through the submission
processes established with respect to the
EMMA continuing disclosure service;
provided that such processes may
become available for use by voluntary
submitters on a phased-in basis. No
paper submissions would be accepted.
Documents submitted by issuers,
obligated persons and their agents
would be made available to the public
on the EMMA portal. The specific
features of the EMMA portal established
with respect to the EMMA continuing
disclosure service may become available
for use by public users of the EMMA
Web site on a phased-in basis during the
pilot phase. The MSRB also may make
available test versions of the computerto-computer submission processes and
5 Under Rule 15c2–12(b)(5)(i), annual filings are
to be sent to all existing nationally recognized
municipal securities information repositories
(‘‘NRMSIRs’’) and any applicable state information
depositories (‘‘SIDs’’), while material event notices
may be sent to all existing NRMSIRs or to the
MSRB, as well as to any applicable SIDs.
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data stream subscription services
established with respect to the EMMA
continuing disclosure service on a
phased-in basis during the pilot phase.
There would be no charge for the
making of submissions during the pilot
phase or for accessing such documents
on the EMMA portal.
The MSRB would view electronic
submissions of continuing disclosure
documents during the pilot phase of the
EMMA continuing disclosure service as
having been submitted to the MSRB for
purposes of any existing continuing
disclosure undertakings entered into
consistent with Exchange Act Rule
15c2–12.6 The MSRB takes no position
with regard to whether a submission
made to the pilot phase of the EMMA
continuing disclosure service that is
made publicly available through the
EMMA portal would satisfy any other
provisions of existing continuing
disclosure undertakings.
The MSRB would undertake to make
the submission and EMMA portal access
services available during the pilot phase
on the same terms as established for the
EMMA continuing disclosure service
but would reserve the right to operate
any feature on a more limited basis as
necessary or appropriate, in the sole
discretion of the MSRB, during the pilot
phase. The pilot phase would be
expected to operate for a limited period
of time as the MSRB transitions to the
permanent EMMA continuing
disclosure service anticipated to
commence operation on July 1, 2009.
The pilot phase would terminate
automatically at such time as the
permanent EMMA continuing
disclosure service becomes operational.
The MSRB has designed EMMA,
including the EMMA portal, as a
scalable system with sufficient current
capacity and the ability to add further
capacity to meet foreseeable usage levels
based on reasonable estimates of
expected usage, and the MSRB would
monitor usage levels in order to assure
continued capacity in the future.
The MSRB may restrict or terminate
malicious, illegal or abusive usage for
such periods as may be necessary and
appropriate to ensure continuous and
6 The MSRB currently operates CDINet to process
and disseminate notices of material events
submitted to the MSRB. The MSRB urges, but does
not require, submitters currently using CDINet to
instead make any future submissions to the pilot
phase of the EMMA continuing disclosure service,
solely in electronic format, upon the launch of the
pilot phase until such time as all submissions must
be made to the permanent EMMA continuing
disclosure service. The MSRB intends to file in the
near future a proposed rule change with the
Commission to discontinue CDINet as of the
commencement of operations of the permanent
EMMA continuing disclosure service on July 1,
2009.
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15531
efficient access to the EMMA portal and
to maintain the integrity of EMMA and
its operational components. Such usage
may include, without limitation, usage
intended to cause the EMMA portal to
become inaccessible by other users, to
cause the EMMA database or
operational components to become
corrupted or otherwise unusable, to
alter the appearance or functionality of
the EMMA portal, or to hyperlink to or
otherwise use the EMMA portal or the
information provided through the
EMMA portal in furtherance of
fraudulent or other illegal activities
(such as, for example, creating any
inference of MSRB complicity with or
approval of such fraudulent or illegal
activities or creating a false impression
that information used to further such
fraudulent or illegal activities has been
obtained from the MSRB or EMMA).
Measures taken by the MSRB in
response to such unacceptable usage
shall be designed to minimize any
potentially negative impact on the
ability to access the EMMA portal.
2. Statutory Basis
The MSRB believes that the proposed
rule change is consistent with Section
15B(b)(2)(C) of the Act,7 which provides
that the MSRB’s rules shall:
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 the public
interest.
The MSRB believes that the proposed
rule change is consistent with the Act.
The EMMA continuing disclosure
service, including the pilot phase
thereof, would serve as an additional
mechanism by which the MSRB works
toward removing impediments to and
helping to perfect the mechanisms of a
free and open market in municipal
securities. The pilot phase would be an
important transitional step toward
ensuring the effective and efficient
operation of the permanent EMMA
continuing disclosure service upon
launch on July 1, 2009.
The EMMA continuing disclosure
service, including the pilot phase
thereof, would help make information
useful for making investment decisions
more easily accessible to all participants
in the municipal securities market on an
equal basis throughout the life of the
7 15
E:\FR\FM\06APN1.SGM
U.S.C. 78o–4(b)(2)(C).
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Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices
securities without charge through a
centralized, searchable Internet-based
repository, thereby removing potential
barriers to obtaining such information.
Broad access to continuing disclosure
documents through the EMMA
continuing disclosure service should
assist in preventing fraudulent and
manipulative acts and practices by
improving the opportunity for public
investors to access material information
about issuers and their securities.
Furthermore, the EMMA continuing
disclosure service should reduce the
effort necessary for issuers and obligated
persons to comply with their continuing
disclosure undertakings by making
submissions to a single venue 8 using an
electronic submission process, which
should result in lower costs to issuers
and savings to their citizens. Similarly,
a single centralized and searchable
venue for free public access to
disclosure information should promote
a more fair and efficient municipal
securities market in which transactions
are effected on the basis of material
information available to all parties to
such transactions, which should allow
for fairer pricing of transactions based
on a more complete understanding of
the terms of the securities and the
potential investment risks. Free access
to this information—previously
available in most cases only through
paid subscription services or on a perdocument fee basis—should reduce
transaction costs for dealers and
investors.
All of these factors serve to promote
the statutory mandate of the MSRB to
protect investors and the public interest.
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
The MSRB does not believe that the
proposed rule change would impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act. The pilot phase of
the EMMA continuing disclosure
service would be an important
transitional step toward ensuring the
effective and efficient operation of the
permanent EMMA continuing
disclosure service upon launch on July
1, 2009. As the MSRB has previously
stated in its filing with the Commission
in connection with the permanent
EMMA continuing disclosure service
(the ‘‘permanent EMMA continuing
disclosure filing’’),9 although the MSRB
8 Some states may require issuers and/or
obligated persons to submit disclosure information
to state information depositories or other venues
pursuant to state law.
9 See Securities Exchange Act Release No. 58256
(July 30, 2008) 73 FR 46161 (August 7, 2008) (File
No. SR–MSRB–2008–05) (proposing the
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recognizes that the EMMA continuing
disclosure service might require private
enterprises to modify some aspects of
the way they undertake their current
business activities, the MSRB believes
that the continuing disclosure service
would promote, rather than hinder,
further competition, growth and
innovation in this area. The MSRB
believes that the benefits realized by the
investing public from the broader and
easier availability of disclosure
information about municipal securities
that would be provided through the
EMMA continuing disclosure service,
including the pilot phase thereof, would
justify any potentially negative impact
on existing enterprises from the
operation of EMMA.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received on the proposed
rule change. However, in connection
with the permanent EMMA continuing
disclosure filing, the Commission
received comments relating to, among
other things, the effective date of the
filing and a desire for a transition to the
permanent EMMA continuing
disclosure filing.10 In the permanent
EMMA continuing disclosure filing, the
MSRB had originally proposed an
effective date of January 1, 2009. In
response, one commentator requested
that the Commission establish a
transition period before making
electronic filings on EMMA mandatory
as a result of the submissions needing
to be submitted as PDF-word searchable
files.11 Another commentator noted a
need to address smaller issuers who
may need additional time to familiarize
themselves with an electronic system.12
A third commentator noted that
‘‘municipal issuers and obligated
persons may be confused as to where
they should file continuing disclosure
documents during the period of
transition from the current system to the
EMMA system’’ and suggested that
establishment of the continuing disclosure service
of EMMA). See also Securities Exchange Act
Release No. 59061 (December 5, 2008), 73 FR 75778
(December 12, 2008) (File No. SR–MSRB–2008–05)
(approving the continuing disclosure service of
EMMA with an effective date of July 1, 2009).
10 Comment letters to the Commission on the
permanent EMMA continuing disclosure filing are
available at https://www.sec.gov/comments/sr-msrb2008-05/msrb200805.shtml.
11 See Letter from Susan A. Gaffney, Director,
Federal Liaison Center, Government Finance
Officers Association, to Ms. Harmon, dated
September 22, 2008.
12 See Letter from William A. Holby, President,
National Association of Bond Lawyers, to Ms.
Harmon, dated September 22, 2008.
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these concerns ‘‘could be addressed
during a short transition period.’’ 13
As a result, the MSRB amended the
permanent EMMA continuing
disclosure filing to request that the
Commission delay the implementation
of the permanent EMMA continuing
disclosure service to July 1, 2009.14 The
MSRB noted that the delayed
effectiveness would provide the MSRB
with the opportunity to implement a
pilot phase of the EMMA continuing
disclosure service to allow voluntary
submissions to be made prior to the
effectiveness of the permanent EMMA
continuing disclosure service. During
this pilot period, submitters would be
able to familiarize themselves with the
submission process and receive
assistance to establish user accounts.
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 rulecomments@sec.gov. Please include File
Number SR–MSRB–2009–03 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
13 See Letter from Christopher Alwine, Head of
Municipal Money Market and Bond Groups,
Vanguard, to Ms. Harmon, dated September 24,
2008.
14 See SR–MSRB–2008–05, Amendment No. 1
(November 5, 2008).
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Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–MSRB–2009–03. 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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
the principal office of the MSRB. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–MSRB–2009–03 and should
be submitted on or before April 27,
2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–7583 Filed 4–3–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
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[Release No. 34–59652; File No. SR–
NASDAQ–2009–027)
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Order Granting Accelerated
Approval of Proposed Rule Change To
Extend the Pilot Program for NASDAQ
Last Sale Data Feeds and To Reduce
the Monthly Cap on Fees
March 30, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
15 17
CFR 200.30–3(a)(12).
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19:48 Apr 03, 2009
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(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 25,
2009, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons, and is
approving the proposal on an
accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASDAQ is proposing to extend for
three months the pilot that created the
NASDAQ Last Sale (‘‘NLS’’) market data
products. NLS allows data distributors
to have access to real-time market data
for a capped fee, enabling those
distributors to provide free access to the
data to millions of individual investors
via the internet and television.
Specifically, NASDAQ offers the
‘‘NASDAQ Last Sale for NASDAQ’’ and
‘‘NASDAQ Last Sale for NYSE/Amex’’
data feeds containing last sale activity in
US equities within the NASDAQ Market
Center and reported to the jointlyoperated FINRA/NASDAQ Trade
Reporting Facility (‘‘FINRA/NASDAQ
TRF’’). The purpose of this proposal is
to extend the existing pilot program for
three months and to reduce the cap on
applicable fees as set forth below.3
This pilot program supports the
aspiration of Regulation NMS to
increase the availability of proprietary
data by allowing market forces to
determine the amount of proprietary
market data information that is made
available to the public and at what
price. During the current pilot period,
the program has vastly increased the
availability of NASDAQ proprietary
market data to individual investors.
Based upon data from NLS distributors,
NASDAQ believes that since its launch
in July 2008, the NLS data has been
viewed by over 50,000,000 investors on
websites operated by Google, Interactive
Data, and Dow Jones, among others. The
text of the proposed rule change is
available at NASDAQ, the Commission’s
Public Reference Room, and https://
nasdaq.complinet.com.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Nasdaq will file a proposed rule change within
thirty days seeking permanenet [sic] approval oft
[sic] the Nasdaq Last Sale pilot.
2 17
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15533
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
self-regulatory organization 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 those statements may be examined at
the places specified in Item III below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Prior to the launch of NLS, public
investors that wished to view market
data to monitor their portfolios
generally had two choices: (1) Pay for
real-time market data or (2) use free data
that is 15 to 20 minutes delayed. To
increase consumer choice, NASDAQ
proposed a four-month pilot to offer
access to real-time market data to data
distributors for a capped fee, enabling
those distributors to disseminate the
data via the internet and television at no
cost to millions of internet users and
television viewers.
NASDAQ now proposes a threemonth extension of that pilot program
and to reduce the capped fee to $50,000
per month from $150,000 per month.
The NLS pilot created two separate
‘‘Level 1’’ products containing last sale
activity within the NASDAQ market and
reported to the jointly-operated FINRA/
NASDAQ TRF. First, the ‘‘NASDAQ
Last Sale for NASDAQ Data Product,’’ a
real-time data feed that provides realtime last sale information including
execution price, volume, and time for
executions occurring within the
NASDAQ system as well as those
reported to the FINRA/NASDAQ TRF.
Second, the NASDAQ Last Sale for
NYSE/Amex data product that provides
real-time last sale information including
execution price, volume, and time for
NYSE- and Amex-securities executions
occurring within the NASDAQ system
as well as those reported to the FINRA/
NASDAQ TRF.
NASDAQ established two different
pricing models, one for clients that are
able to maintain username/password
entitlement systems and/or quote
counting mechanisms to account for
usage, and a second for those that are
not. Firms with the ability to maintain
username/password entitlement systems
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[Federal Register Volume 74, Number 64 (Monday, April 6, 2009)]
[Notices]
[Pages 15530-15533]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-7583]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59643; File No. SR-MSRB-2009-03]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing of Proposed Rule Change Relating to the
Establishment of a Pilot Phase of Its Upcoming Continuing Disclosure
Service of the Electronic Municipal Market Access system (EMMA[supreg])
March 27, 2009.
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 25, 2009, the Municipal Securities Rulemaking Board (``MSRB'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been substantially 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 Commission a proposed rule change to
establish a pilot phase (the ``continuing disclosure pilot'') of the
continuing disclosure service of the MSRB's Electronic Municipal Market
Access system (``EMMA''). The continuing disclosure pilot would receive
electronic submissions of, and would make publicly available on the
Internet, continuing disclosure documents and related information
voluntarily submitted by issuers, obligated persons and their agents.
The MSRB has requested approval of the continuing disclosure pilot to
commence operation on May 11, 2009, or such later date as may be
announced by the MSRB in a notice published on the MSRB Web site, which
date shall be no later than 30 days after Commission approval of the
proposed rule change. In addition, the MSRB has requested approval of
the continuing disclosure pilot for a period ending on July 1, 2009.\3\
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\3\ The Commission has previously approved the establishment of
the continuing disclosure service of EMMA, which will commence
operation on July 1, 2009. See Securities Exchange Act Release No.
59061 (December 5, 2008), 73 FR 75778 (December 12, 2008) (File No.
SR-MSRB-2008-05) (approving the continuing disclosure service of
EMMA with an effective date of July 1, 2009). The EMMA continuing
disclosure service is designed to commence operation simultaneously
with the effectiveness of certain amendments to Exchange Act Rule
15c2-12 adopted by the Commission. See Securities Exchange Act
Release No. 59062 (December 5, 2008), 73 FR 76104 (December 15,
2008) (adopting amendments to Exchange Act Rule 15c2-12).
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The text of the proposed rule change is available on the MSRB's Web
site (https://www.msrb.org/msrb1/sec.asp), 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 would establish a pilot phase of the
continuing disclosure service of EMMA to provide, pending the
commencement of operation of the permanent EMMA continuing disclosure
service on July 1, 2009, for the voluntary electronic submission to the
MSRB of continuing disclosure documents and related information by
issuers, obligated persons and their agents and to provide for the free
public access to such documents through the EMMA portal.\4\
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\4\ The EMMA portal began operation on March 31, 2008 as a pilot
facility and is accessible at https://emma.msrb.org. See Securities
Exchange Act Release No. 57577 (March 28, 2008), 73 FR 18022 (April
2, 2008) (File No. SR-MSRB-2007-06) (approving operation of the EMMA
pilot to provide free public access to the MSIL system collection of
official statements and advance refunding documents and to the
MSRB's Real-Time Transaction Reporting System historical and real-
time transaction price data) (the ``EMMA portal pilot filing'').
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Under Exchange Act Rule 15c2-12(b)(5), an underwriter for a primary
offering of municipal securities subject to the rule currently is
prohibited from underwriting the offering unless the underwriter has
determined that the issuer or an obligated person for whom financial
information or operating data is presented in the final official
statement, or a designated agent, has undertaken in writing to provide
certain
[[Page 15531]]
items of information to the marketplace.\5\ The items to be provided
include: (A) Annual financial information concerning obligated persons;
(B) audited financial statements for obligated persons if available and
if not included in the annual financial information; (C) notices of
certain events, if material; and (D) notices of failures to provide
annual financial information on or before the date specified in the
written undertaking. The written agreement shall identify each
obligated person or other person for whom information is to be
provided, either by name or by an objective criteria for selecting such
person, and also shall specify (i) the type of information to be
included in the annual financial information, (ii) the accounting
principles pursuant to which financial statements will be prepared and
whether such financial statements will be audited, and (iii) the date
on which the annual financial information will be provided.
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\5\ Under Rule 15c2-12(b)(5)(i), annual filings are to be sent
to all existing nationally recognized municipal securities
information repositories (``NRMSIRs'') and any applicable state
information depositories (``SIDs''), while material event notices
may be sent to all existing NRMSIRs or to the MSRB, as well as to
any applicable SIDs.
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The pilot phase of the EMMA continuing disclosure service would
accept voluntary submissions of continuing disclosure documents,
including but not limited to items to be provided pursuant to Exchange
Act Rule 15c2-12. Submissions of continuing disclosure documents to the
pilot phase of the EMMA continuing disclosure service would be made
solely in electronic format by issuers, obligated persons and their
agents through a secured, password-protected, Web-based interface with
EMMA. Such submissions would be made as portable document format (PDF)
files, accompanied by related indexing information, through the
submission processes established with respect to the EMMA continuing
disclosure service; provided that such processes may become available
for use by voluntary submitters on a phased-in basis. No paper
submissions would be accepted. Documents submitted by issuers,
obligated persons and their agents would be made available to the
public on the EMMA portal. The specific features of the EMMA portal
established with respect to the EMMA continuing disclosure service may
become available for use by public users of the EMMA Web site on a
phased-in basis during the pilot phase. The MSRB also may make
available test versions of the computer-to-computer submission
processes and data stream subscription services established with
respect to the EMMA continuing disclosure service on a phased-in basis
during the pilot phase. There would be no charge for the making of
submissions during the pilot phase or for accessing such documents on
the EMMA portal.
The MSRB would view electronic submissions of continuing disclosure
documents during the pilot phase of the EMMA continuing disclosure
service as having been submitted to the MSRB for purposes of any
existing continuing disclosure undertakings entered into consistent
with Exchange Act Rule 15c2-12.\6\ The MSRB takes no position with
regard to whether a submission made to the pilot phase of the EMMA
continuing disclosure service that is made publicly available through
the EMMA portal would satisfy any other provisions of existing
continuing disclosure undertakings.
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\6\ The MSRB currently operates CDINet to process and
disseminate notices of material events submitted to the MSRB. The
MSRB urges, but does not require, submitters currently using CDINet
to instead make any future submissions to the pilot phase of the
EMMA continuing disclosure service, solely in electronic format,
upon the launch of the pilot phase until such time as all
submissions must be made to the permanent EMMA continuing disclosure
service. The MSRB intends to file in the near future a proposed rule
change with the Commission to discontinue CDINet as of the
commencement of operations of the permanent EMMA continuing
disclosure service on July 1, 2009.
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The MSRB would undertake to make the submission and EMMA portal
access services available during the pilot phase on the same terms as
established for the EMMA continuing disclosure service but would
reserve the right to operate any feature on a more limited basis as
necessary or appropriate, in the sole discretion of the MSRB, during
the pilot phase. The pilot phase would be expected to operate for a
limited period of time as the MSRB transitions to the permanent EMMA
continuing disclosure service anticipated to commence operation on July
1, 2009. The pilot phase would terminate automatically at such time as
the permanent EMMA continuing disclosure service becomes operational.
The MSRB has designed EMMA, including the EMMA portal, as a
scalable system with sufficient current capacity and the ability to add
further capacity to meet foreseeable usage levels based on reasonable
estimates of expected usage, and the MSRB would monitor usage levels in
order to assure continued capacity in the future.
The MSRB may restrict or terminate malicious, illegal or abusive
usage for such periods as may be necessary and appropriate to ensure
continuous and efficient access to the EMMA portal and to maintain the
integrity of EMMA and its operational components. Such usage may
include, without limitation, usage intended to cause the EMMA portal to
become inaccessible by other users, to cause the EMMA database or
operational components to become corrupted or otherwise unusable, to
alter the appearance or functionality of the EMMA portal, or to
hyperlink to or otherwise use the EMMA portal or the information
provided through the EMMA portal in furtherance of fraudulent or other
illegal activities (such as, for example, creating any inference of
MSRB complicity with or approval of such fraudulent or illegal
activities or creating a false impression that information used to
further such fraudulent or illegal activities has been obtained from
the MSRB or EMMA). Measures taken by the MSRB in response to such
unacceptable usage shall be designed to minimize any potentially
negative impact on the ability to access the EMMA portal.
2. Statutory Basis
The MSRB believes that the proposed rule change is consistent with
Section 15B(b)(2)(C) of the Act,\7\ which provides that the MSRB's
rules shall:
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\7\ 15 U.S.C. 78o-4(b)(2)(C).
be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect
to, and facilitating transactions in municipal securities, 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 is consistent with
the Act. The EMMA continuing disclosure service, including the pilot
phase thereof, would serve as an additional mechanism by which the MSRB
works toward removing impediments to and helping to perfect the
mechanisms of a free and open market in municipal securities. The pilot
phase would be an important transitional step toward ensuring the
effective and efficient operation of the permanent EMMA continuing
disclosure service upon launch on July 1, 2009.
The EMMA continuing disclosure service, including the pilot phase
thereof, would help make information useful for making investment
decisions more easily accessible to all participants in the municipal
securities market on an equal basis throughout the life of the
[[Page 15532]]
securities without charge through a centralized, searchable Internet-
based repository, thereby removing potential barriers to obtaining such
information. Broad access to continuing disclosure documents through
the EMMA continuing disclosure service should assist in preventing
fraudulent and manipulative acts and practices by improving the
opportunity for public investors to access material information about
issuers and their securities.
Furthermore, the EMMA continuing disclosure service should reduce
the effort necessary for issuers and obligated persons to comply with
their continuing disclosure undertakings by making submissions to a
single venue \8\ using an electronic submission process, which should
result in lower costs to issuers and savings to their citizens.
Similarly, a single centralized and searchable venue for free public
access to disclosure information should promote a more fair and
efficient municipal securities market in which transactions are
effected on the basis of material information available to all parties
to such transactions, which should allow for fairer pricing of
transactions based on a more complete understanding of the terms of the
securities and the potential investment risks. Free access to this
information--previously available in most cases only through paid
subscription services or on a per-document fee basis--should reduce
transaction costs for dealers and investors.
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\8\ Some states may require issuers and/or obligated persons to
submit disclosure information to state information depositories or
other venues pursuant to state law.
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All of these factors serve to promote the statutory mandate of the
MSRB to protect investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The MSRB does not believe that the proposed rule change would
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The pilot phase of the EMMA
continuing disclosure service would be an important transitional step
toward ensuring the effective and efficient operation of the permanent
EMMA continuing disclosure service upon launch on July 1, 2009. As the
MSRB has previously stated in its filing with the Commission in
connection with the permanent EMMA continuing disclosure service (the
``permanent EMMA continuing disclosure filing''),\9\ although the MSRB
recognizes that the EMMA continuing disclosure service might require
private enterprises to modify some aspects of the way they undertake
their current business activities, the MSRB believes that the
continuing disclosure service would promote, rather than hinder,
further competition, growth and innovation in this area. The MSRB
believes that the benefits realized by the investing public from the
broader and easier availability of disclosure information about
municipal securities that would be provided through the EMMA continuing
disclosure service, including the pilot phase thereof, would justify
any potentially negative impact on existing enterprises from the
operation of EMMA.
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\9\ See Securities Exchange Act Release No. 58256 (July 30,
2008) 73 FR 46161 (August 7, 2008) (File No. SR-MSRB-2008-05)
(proposing the establishment of the continuing disclosure service of
EMMA). See also Securities Exchange Act Release No. 59061 (December
5, 2008), 73 FR 75778 (December 12, 2008) (File No. SR-MSRB-2008-05)
(approving the continuing disclosure service of EMMA with an
effective date of July 1, 2009).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received on the
proposed rule change. However, in connection with the permanent EMMA
continuing disclosure filing, the Commission received comments relating
to, among other things, the effective date of the filing and a desire
for a transition to the permanent EMMA continuing disclosure
filing.\10\ In the permanent EMMA continuing disclosure filing, the
MSRB had originally proposed an effective date of January 1, 2009. In
response, one commentator requested that the Commission establish a
transition period before making electronic filings on EMMA mandatory as
a result of the submissions needing to be submitted as PDF-word
searchable files.\11\ Another commentator noted a need to address
smaller issuers who may need additional time to familiarize themselves
with an electronic system.\12\ A third commentator noted that
``municipal issuers and obligated persons may be confused as to where
they should file continuing disclosure documents during the period of
transition from the current system to the EMMA system'' and suggested
that these concerns ``could be addressed during a short transition
period.'' \13\
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\10\ Comment letters to the Commission on the permanent EMMA
continuing disclosure filing are available at https://www.sec.gov/comments/sr-msrb-2008-05/msrb200805.shtml.
\11\ See Letter from Susan A. Gaffney, Director, Federal Liaison
Center, Government Finance Officers Association, to Ms. Harmon,
dated September 22, 2008.
\12\ See Letter from William A. Holby, President, National
Association of Bond Lawyers, to Ms. Harmon, dated September 22,
2008.
\13\ See Letter from Christopher Alwine, Head of Municipal Money
Market and Bond Groups, Vanguard, to Ms. Harmon, dated September 24,
2008.
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As a result, the MSRB amended the permanent EMMA continuing
disclosure filing to request that the Commission delay the
implementation of the permanent EMMA continuing disclosure service to
July 1, 2009.\14\ The MSRB noted that the delayed effectiveness would
provide the MSRB with the opportunity to implement a pilot phase of the
EMMA continuing disclosure service to allow voluntary submissions to be
made prior to the effectiveness of the permanent EMMA continuing
disclosure service. During this pilot period, submitters would be able
to familiarize themselves with the submission process and receive
assistance to establish user accounts.
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\14\ See SR-MSRB-2008-05, Amendment No. 1 (November 5, 2008).
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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-2009-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission,
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100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-MSRB-2009-03. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the MSRB. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-MSRB-2009-03 and should be
submitted on or before April 27, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-7583 Filed 4-3-09; 8:45 am]
BILLING CODE 8011-01-P
