Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Granting Approval of Proposed Rule Change Relating to Rule G-37, on Political Contributions and Prohibitions on Municipal Securities Business, 63873-63874 [2010-26131]
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Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / Notices
the calculation of an equity option’s net
delta would enable eligible market
participants to more fully realize the
benefit of the delta based equity hedge
exemption. The proposed delta-based
index hedge exemption would be
substantially similar to the delta-based
equity hedge exemption under ISE Rule
413. Also, the Commission has
previously stated its support for
recognizing options positions hedged on
a delta neutral basis as properly
exempted from position limits.29
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
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
No written comments were either
solicited or received.
mstockstill on DSKH9S0YB1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule change
does not: (1) Significantly affect the
protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 30 and Rule 19b–
4(f)(6) thereunder.31
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.32 However, Rule 19b–
4(f)(6)(iii) 33 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay. The Commission believes that
29 See Securities Exchange Act Release No. 40594
(October 23, 1998), 63 FR 59362, 59380 (November
3, 1998) (adopting rules relating to OTC Derivatives
Dealers).
30 15 U.S.C. 78s(b)(3)(A).
31 17 CFR 240.19b–4(f)(6).
32 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires that a self-regulatory
organization submit to the Commission written
notice of its intent to file the proposed rule change,
along with a brief description and text of the
proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
33 Id.
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16:45 Oct 15, 2010
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waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest. The
Commission notes that it has approved
a substantially similar proposal filed by
the Chicago Board Options Exchange,
Incorporated,34 and therefore believes
that no significant purpose is served by
a 30-day operative delay. For these
reasons, the Commission designates the
proposed rule change to be operative
upon filing with the Commission.35
At any time within 60 days of the
filing of such proposed rule change the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
63873
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 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 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–ISE–
2010–97 and should be submitted on or
before November 8, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.36
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–26108 Filed 10–15–10; 8:45 am]
BILLING CODE 8011–01–P
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–ISE–2010–97 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–ISE–2010–97. 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
34 See Securities Exchange Act Release No. 62190
(May 27, 2010), 75 FR 31826 (June 4, 2010) (SR–
CBOE–2010–21). See also Securities Exchange Act
Release No. 62504 (July 15, 2010), 75 FR 42797
(July 22, 2010) (SR–PHLX–2010–93).
35 For the purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63073, File No. SR–MSRB–
2010–07]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Order Granting Approval of
Proposed Rule Change Relating to
Rule G–37, on Political Contributions
and Prohibitions on Municipal
Securities Business
October 12, 2010.
I. Introduction
On August 25, 2010, the Municipal
Securities Rulemaking Board (‘‘MSRB’’),
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Exchange Act’’),1
and Rule 19b–4 thereunder,2 a proposed
rule change which consists of an
interpretive notice regarding Rule G–37,
on political contributions and
prohibitions on municipal securities
business. The proposed rule change was
published for comment in the Federal
Register on September 9, 2010.3 The
36 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 62830
(September 2, 2010), 75 FR 54930 (the
‘‘Commission’s Notice’’).
1 15
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63874
Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / Notices
Commission received no comment
letters about the proposed rule change.
This order approves the proposed rule
change.
mstockstill on DSKH9S0YB1PROD with NOTICES
II. Description of the Proposed Rule
Change
The proposed rule change consists of
an interpretive notice regarding Rule G–
37, on political contributions and
prohibitions on municipal securities
business.4 Under Rule G–37, certain
contributions to elected officials of
municipal securities issuers made by
brokers, dealers and municipal
securities dealers (‘‘dealers’’), municipal
finance professionals (‘‘MFPs’’)
associated with dealers, and political
action committees (‘‘PACs’’) controlled
by dealers and their MFPs (‘‘dealercontrolled PACs’’) 5 may result in
prohibitions on dealers from engaging in
municipal securities business with such
issuers for a period of two years from
the date of any triggering contributions.
Rule G–37 requires dealers to disclose
certain contributions to issuer officials,
state or local political parties, and bond
ballot campaigns, as well as other
information, on Form G–37 to allow
public scrutiny of such contributions
and the municipal securities business of
a dealer. In addition, dealers and MFPs
generally are prohibited from soliciting
others (including affiliates of the dealer
or any PACs) to make contributions to
officials of issuers with which the dealer
is engaging or seeking to engage in
municipal securities business, or to
political parties of a state or locality
where the dealer is engaging or seeking
to engage in municipal securities
business. Dealers and MFPs are
prohibited from circumventing Rule G–
37 by direct or indirect actions through
any other persons or means.6
4 Rule G–37 defines municipal securities business
as: (i) The purchase of a primary offering of
municipal securities from an issuer on other than
a competitive bid basis; (ii) the offer or sale of a
primary offering of municipal securities on behalf
of an issuer; (iii) the provision of financial advisory
or consultant services to or on behalf of an issuer
with respect to a primary offering of municipal
securities in which the dealer was chosen to
provide such services on other than a competitive
bid basis; or (iv) the provision of remarketing agent
services to or on behalf of an issuer with respect
to a primary offering of municipal securities in
which the dealer was chosen to provide such
services on other than a competitive bid basis.
5 The MSRB has previously stated that the matter
of control depends upon whether or not the dealer
or the MFP has the ability to direct or cause the
direction of the management or policies of the PAC
(MSRB Question & Answer No. IV. 24—Dealer
Controlled PAC).
6 Rule G–37(d) provides that no broker, dealer or
municipal securities dealer or any municipal
finance professional shall, directly or indirectly,
through or by any other person or means, do any
act which would result in a violation of sections (b)
or (c) of the rule. Section (b) relates to the ban on
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16:45 Oct 15, 2010
Jkt 223001
Due to changes in the financial
markets since the adoption of Rule G–
37 and recent market turmoil, many
dealers have become affiliated with a
broad range of other entities in
increasingly diverse organizational
structures. Some of these affiliated
entities (including but not limited to
banks, bank holding companies,
insurance companies and investment
management companies) have formed or
otherwise maintain relationships with
PACs (‘‘affiliated PACs’’) and other
political organizations, many of which
may make contributions to issuer
officials. Such relationships raise
questions regarding the extent to which
affiliated PACs may effectively be
controlled by dealers or their MFPs and
thereby constitute dealer-controlled
PACs whose contributions are subject to
Rule G–37. Further, such relationships
raise concerns regarding whether the
contributions of such affiliated PACs,
even if not viewed as dealer-controlled
PACs, may be used by dealers or their
MFPs to circumvent Rule G–37 as
indirect contributions for the purpose of
obtaining or retaining municipal
securities business. As a result, the
MSRB has filed the proposed rule
change to provide additional guidance
with regard to the potential for affiliated
PACs to be viewed as dealer-controlled
PACs. A more complete description of
the proposal is contained in the
Commission’s Notice.
The MSRB has requested an effective
date for the proposed rule change of
sixty days after Commission approval of
the proposed rule change.
III. Discussion and Commission
Findings
The Commission has carefully
considered the proposed rule change
and finds that the proposed rule change
is consistent with the requirements of
the Exchange Act and the rules and
regulations thereunder applicable to the
MSRB 7 and, in particular, the
requirements of Section 15B(b)(2)(C) of
the Exchange Act 8 and the rules and
regulations thereunder. Section
15B(b)(2)(C) of the Exchange Act
requires, among other things, that the
MSRB’s rules 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,
business and Section (c) relates to the prohibition
on soliciting and coordinating contributions.
7 In approving this proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition
and capital formation. 15 U.S.C. 78c(f).
8 15 U.S.C. 78o–4(b)(2)(C).
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Frm 00077
Fmt 4703
Sfmt 4703
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.9 The Commission believes that
the proposed rule change is consistent
with the Exchange Act because it will
help to inhibit practices constituting
real and perceived attempts to influence
the awarding of municipal securities
business through contributions made by
or through dealer-affiliated PACs. The
Commission also believes that the
proposed rule change will facilitate
dealer compliance with Rule G–37 and
Rule G–27, on supervision. The
proposal will become effective sixty
days after Commission approval of the
proposed rule change, as requested by
the MSRB.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,10
that the proposed rule change (SR–
MSRB–2010–07), be, and it hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–26131 Filed 10–15–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63076; File No. SR–
NYSEArca–2010–79]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Granting Approval of
a Proposed Rule Change To List and
Trade Shares of Cambria Global
Tactical ETF
October 12, 2010.
I. Introduction
On August 23, 2010, NYSE Arca, Inc.
(‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to list and trade shares (‘‘Shares’’)
of the Cambria Global Tactical ETF
(‘‘Fund’’) under NYSE Arca Equities
Rule 8.600. The proposed rule change
was published for comment in the
9 Id.
10 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
11 17
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]]>Agencies
[Federal Register Volume 75, Number 200 (Monday, October 18, 2010)]
[Notices]
[Pages 63873-63874]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-26131]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63073, File No. SR-MSRB-2010-07]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Order Granting Approval of Proposed Rule Change Relating to Rule
G-37, on Political Contributions and Prohibitions on Municipal
Securities Business
October 12, 2010.
I. Introduction
On August 25, 2010, the Municipal Securities Rulemaking Board
(``MSRB''), filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act''),\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change which consists of an interpretive
notice regarding Rule G-37, on political contributions and prohibitions
on municipal securities business. The proposed rule change was
published for comment in the Federal Register on September 9, 2010.\3\
The
[[Page 63874]]
Commission received no comment letters about the proposed rule change.
This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 62830 (September 2,
2010), 75 FR 54930 (the ``Commission's Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
The proposed rule change consists of an interpretive notice
regarding Rule G-37, on political contributions and prohibitions on
municipal securities business.\4\ Under Rule G-37, certain
contributions to elected officials of municipal securities issuers made
by brokers, dealers and municipal securities dealers (``dealers''),
municipal finance professionals (``MFPs'') associated with dealers, and
political action committees (``PACs'') controlled by dealers and their
MFPs (``dealer-controlled PACs'') \5\ may result in prohibitions on
dealers from engaging in municipal securities business with such
issuers for a period of two years from the date of any triggering
contributions.
---------------------------------------------------------------------------
\4\ Rule G-37 defines municipal securities business as: (i) The
purchase of a primary offering of municipal securities from an
issuer on other than a competitive bid basis; (ii) the offer or sale
of a primary offering of municipal securities on behalf of an
issuer; (iii) the provision of financial advisory or consultant
services to or on behalf of an issuer with respect to a primary
offering of municipal securities in which the dealer was chosen to
provide such services on other than a competitive bid basis; or (iv)
the provision of remarketing agent services to or on behalf of an
issuer with respect to a primary offering of municipal securities in
which the dealer was chosen to provide such services on other than a
competitive bid basis.
\5\ The MSRB has previously stated that the matter of control
depends upon whether or not the dealer or the MFP has the ability to
direct or cause the direction of the management or policies of the
PAC (MSRB Question & Answer No. IV. 24--Dealer Controlled PAC).
---------------------------------------------------------------------------
Rule G-37 requires dealers to disclose certain contributions to
issuer officials, state or local political parties, and bond ballot
campaigns, as well as other information, on Form G-37 to allow public
scrutiny of such contributions and the municipal securities business of
a dealer. In addition, dealers and MFPs generally are prohibited from
soliciting others (including affiliates of the dealer or any PACs) to
make contributions to officials of issuers with which the dealer is
engaging or seeking to engage in municipal securities business, or to
political parties of a state or locality where the dealer is engaging
or seeking to engage in municipal securities business. Dealers and MFPs
are prohibited from circumventing Rule G-37 by direct or indirect
actions through any other persons or means.\6\
---------------------------------------------------------------------------
\6\ Rule G-37(d) provides that no broker, dealer or municipal
securities dealer or any municipal finance professional shall,
directly or indirectly, through or by any other person or means, do
any act which would result in a violation of sections (b) or (c) of
the rule. Section (b) relates to the ban on business and Section (c)
relates to the prohibition on soliciting and coordinating
contributions.
---------------------------------------------------------------------------
Due to changes in the financial markets since the adoption of Rule
G-37 and recent market turmoil, many dealers have become affiliated
with a broad range of other entities in increasingly diverse
organizational structures. Some of these affiliated entities (including
but not limited to banks, bank holding companies, insurance companies
and investment management companies) have formed or otherwise maintain
relationships with PACs (``affiliated PACs'') and other political
organizations, many of which may make contributions to issuer
officials. Such relationships raise questions regarding the extent to
which affiliated PACs may effectively be controlled by dealers or their
MFPs and thereby constitute dealer-controlled PACs whose contributions
are subject to Rule G-37. Further, such relationships raise concerns
regarding whether the contributions of such affiliated PACs, even if
not viewed as dealer-controlled PACs, may be used by dealers or their
MFPs to circumvent Rule G-37 as indirect contributions for the purpose
of obtaining or retaining municipal securities business. As a result,
the MSRB has filed the proposed rule change to provide additional
guidance with regard to the potential for affiliated PACs to be viewed
as dealer-controlled PACs. A more complete description of the proposal
is contained in the Commission's Notice.
The MSRB has requested an effective date for the proposed rule
change of sixty days after Commission approval of the proposed rule
change.
III. Discussion and Commission Findings
The Commission has carefully considered the proposed rule change
and finds that the proposed rule change is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder applicable to the MSRB \7\ and, in particular, the
requirements of Section 15B(b)(2)(C) of the Exchange Act \8\ and the
rules and regulations thereunder. Section 15B(b)(2)(C) of the Exchange
Act requires, among other things, that the MSRB's rules 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.\9\ The
Commission believes that the proposed rule change is consistent with
the Exchange Act because it will help to inhibit practices constituting
real and perceived attempts to influence the awarding of municipal
securities business through contributions made by or through dealer-
affiliated PACs. The Commission also believes that the proposed rule
change will facilitate dealer compliance with Rule G-37 and Rule G-27,
on supervision. The proposal will become effective sixty days after
Commission approval of the proposed rule change, as requested by the
MSRB.
---------------------------------------------------------------------------
\7\ In approving this proposed rule change, the Commission notes
that it has considered the proposed rule's impact on efficiency,
competition and capital formation. 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78o-4(b)(2)(C).
\9\ Id.
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\10\ that the proposed rule change (SR-MSRB-2010-07), be,
and it hereby is, approved.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(2).
\11\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-26131 Filed 10-15-10; 8:45 am]
BILLING CODE 8011-01-P
