Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Granting Approval of Proposed Rule Change Consisting of Amendments to Rule A-3, on Membership on the Board, 5417-5418 [2011-1985]

Download as PDF Federal Register / Vol. 76, No. 20 / Monday, January 31, 2011 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Elizabeth M. Murphy, Secretary. Act, Public Law 111–203, 124 Stat. 1376 (2010) (the ‘‘Dodd-Frank Act’’).5 The transitional rule provides that on or after October 1, 2010, and prior to the formation of the Nominating Committee for purposes of nominating Board [FR Doc. 2011–1984 Filed 1–28–11; 8:45 am] Electronic Comments members for fiscal year 2012, the Board BILLING CODE 8011–01–P will amend the provisions of Rule A– • Use the Commission’s Internet 3(c) to (a) reflect the composition of the comment form (http://www.sec.gov/ Board as provided under the DoddSECURITIES AND EXCHANGE rules/sro.shtml); or Frank Act, (b) assure that the COMMISSION • Send an e-mail to ruleNominating Committee will be [Release No. 34–63764; File No. SR–MSRB– composed of a majority of public comments@sec.gov. Please include File 2010–17] members and will have fair Number SR–CBOE–2011–005 on the representation of broker-dealers, bank subject line. Self-Regulatory Organizations; dealers, and municipal advisors, and (c) Municipal Securities Rulemaking Paper Comments reflect such other considerations Board; Order Granting Approval of consistent with the provisions of Proposed Rule Change Consisting of • Send paper comments in triplicate Section 15B of the Exchange Act and the Amendments to Rule A–3, on to Elizabeth M. Murphy, Secretary, Dodd-Frank Act as the Board deems Membership on the Board Securities and Exchange Commission, appropriate. The proposed rule change 100 F Street, NE., Washington, DC January 25, 2011. is intended to amend Rule A–3(c) to 20549–1090. comply with the requirements of I. Introduction transitional Rule A–3(i), as approved by All submissions should refer to File On November 30, 2010, the Municipal the SEC. Number SR–CBOE–2011–005. This file Securities Rulemaking Board (‘‘MSRB’’ Consistent with Rule A–3(i), the number should be included on the or ‘‘Board’’), filed with the Securities and Nominating Committee (hereinafter, subject line if e-mail is used. To help the Exchange Commission (‘‘Commission’’), ‘‘Nominating and Governance Commission process and review your pursuant to Section 19(b)(1) of the Committee’’) would consist of eleven comments more efficiently, please use Securities Exchange Act of 1934 members, six of whom would be public only one method. The Commission will (‘‘Exchange Act’’),1 and Rule 19b–4 members and five of whom would be post all comments on the Commission’s thereunder,2 a proposed rule consisting industry members. The Chair of the Internet Web site (http://www.sec.gov/ of amendments to Rule A–3, on Committee would be a public member. rules/sro.shtml). Copies of the membership on the Board, in order to Establishing an eleven member submission, all subsequent establish a Nominating Committee in committee would allow for fair amendments, all written statements compliance with MSRB transitional representation of regulated entities by with respect to the proposed rule Rule A–3(i). The proposed rule change reserving five positions for brokers, change that are filed with the was published for comment in the dealers, municipal securities dealers Federal Register on December 17, Commission, and all written and municipal advisors. 2010.3 The Commission received no communications relating to the Each constituency identified in the comment letters about the proposed rule Dodd-Frank Act would be guaranteed a proposed rule change between the Commission and any person, other than change.4 This order approves the minimum of one seat on the Nominating proposed rule change. those that may be withheld from the and Governance Committee but the level of each constituency would be public in accordance with the II. Description of the Proposed Rule capped to avoid overweighting of any provisions of 5 U.S.C. 552, will be Change one over the others. These ranges of available for Web site viewing and The purpose of the proposed rule membership are as follows: printing in the Commission’s Public change is to make changes to MSRB • Six public members consisting of Reference Room, 100 F Street, NE., Rule A–3(c) as are necessary and (a) at least one, but no more than three, Washington, DC 20549, on official appropriate prior to the creation of the representative of institutional or retail business days between the hours of 10 Nominating Committee of the MSRB. investors; (b) at least one, but no more a.m. and 3 p.m. Copies of such filing On September 30, 2010, the SEC than three, representative of municipal also will be available for inspection and approved MSRB Rule A–3(i), a entities; (c) at least one, but no more copying at the principal office of the transitional rule for MSRB fiscal year than three, members of the public with CBOE. All comments received will be 2011 intended to implement the knowledge of or experience in the posted without change; the Commission requirements of the Dodd-Frank Wall municipal industry and not does not edit personal identifying Street Reform and Consumer Protection representative of investors or municipal information from submissions. You entities;6 and 19 17 CFR 200.30–3(a)(12). should submit only information that • Five regulated members, consisting 1 15 U.S.C. 78s(b)(1). you wish to make available publicly. All of (a) at least one, but no more than two, 2 17 CFR 240.19b–4. submissions should refer to File representative of broker-dealers; (b) at 3 See Securities Exchange Act Release No. 63533 Number SR–CBOE–2011–005 and (December 13, 2010), 75 FR 79061 (December 17, 5 See Exchange Act Release No. 63025 (September should be submitted on or before 2010) (the ‘‘Commission’s Notice’’). 4 On January 13, 2011, Commissioner Aguilar, 30, 2010), 75 FR 61806 (October 6, 2010). February 22, 2011. 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: jlentini on DSKJ8SOYB1PROD with NOTICES 5417 along with Michael E. Coe, Counsel to the Commissioner, met with representatives of the National Association of Independent Public Finance Advisors to discuss the proposed rule change among other matters. See Memorandum from Michael E. Coe, dated January 13, 2011. VerDate Mar<15>2010 16:38 Jan 28, 2011 Jkt 223001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 6 In order to ensure balance on the committee and reflect the breadth of public representatives on the Board, the proposal would require one to three committee members be selected from Board members who are not representative of municipal entities or investors. E:\FR\FM\31JAN1.SGM 31JAN1 5418 Federal Register / Vol. 76, No. 20 / Monday, January 31, 2011 / Notices least one, but no more than two, representative of bank dealers; and (c) at least one, but no more than two, representative of non-dealer municipal advisors. The Board believes this formulation is consistent with the Dodd-Frank Act and Rule A–3(i) in that it provides for a majority of public members on the Committee and fair representation of regulated entities. The MSRB also believes it is important that the Chair of the Nominating and Governance Committee be a public member, both as a governance best practice and in recognition of the majority of public members on the Board, as mandated by the Dodd-Frank Act. A more complete description of the proposal is contained in the Commission’s Notice.7 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 8 and, in particular, the requirements of Section 15B(b)(2)(B) of the Exchange Act 9 and the rules and regulations thereunder. Section 15B(b)(2)(B) of the Exchange Act provides that the MSRB’s rules shall: Establish fair procedures for the nomination and election of members of the Board and assure fair representation in such nominations and elections of public representatives, broker dealer representatives, bank representatives, and advisor representatives. jlentini on DSKJ8SOYB1PROD with NOTICES The Commission believes that the proposed rule change is consistent with the Exchange Act as amended by the Dodd-Frank Act, in that it would provide for the creation of an MSRB Nominating and Governance Committee that reflects the composition of the Board as provided under the DoddFrank Act and would help assure that the Nominating and Governance Committee would be composed of a majority of public members and have fair representation of broker-dealers, bank dealers, and municipal advisors, consistent with MSRB Rule A–3(i) as approved by the SEC. It is therefore ordered, pursuant to Section 19(b)(2) of the Exchange Act,10 that the proposed rule change (SR– 7 See supra note 3. 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). 9 15 U.S.C. 78o–4(b)(2)(B). 10 15 U.S.C. 78s(b)(2). 8 In VerDate Mar<15>2010 18:04 Jan 28, 2011 Jkt 223001 MSRB–2010–17), be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–1985 Filed 1–28–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63766; File No. SR–BATS– 2011–002] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Proposed Rule Change To Amend BATS Rules in Connection With the Implementation of Amendments to Regulation SHO January 25, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b 4 thereunder,2 notice is hereby given that on January 14, 2011, BATS Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing with the Commission a proposal to amend BATS Rules 11.9, 11.13 and 11.19 to make certain changes consistent with the upcoming implementation of amendments to Regulation SHO.3 The text of the proposed rule change is available at the Exchange’s Web site at http://www.batstrading.com, at the principal office of the Exchange, 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 Exchange 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 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 17 CFR 242.200(g); 17 CFR 242.201. 1 15 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 statements may be examined at the places specified in Item IV 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 On February 26, 2010, the Commission adopted amendments to Regulation SHO under the Act in the form of Rule 201,4 pursuant to which, among other things, short sale orders in covered securities 5 generally cannot be executed or displayed by a trading center 6 such as BATS at a price that is at or below the current national best bid (‘‘NBB’’) when a short sale circuit breaker is in effect for the covered security (the ‘‘short sale price test restriction’’).7 In anticipation of the upcoming February 28, 2011 compliance date for Rule 201, the Exchange is proposing to amend certain BATS rules to describe the manner in which the System 8 will handle short 4 See Securities Exchange Act Release No. 61595 (February 26, 2010), 75 FR 11232 (March 10, 2010). In connection with the adoption of Rule 201, Rule 200(g) of Regulation SHO was also amended to include a ‘‘short exempt’’ marking requirement. The amendments to Rule 201 and Rule 200(g) have a compliance date of February 28, 2011. See Securities Exchange Act Release No. 63247 (Nov. 4, 2010), 75 FR 68702 (Nov. 9, 2010). See also Division of Trading & Markets, Responses to Frequently Asked Questions Concerning Rule 201 of Regulation SHO. 5 Rule 201(a)(1) defines the term ‘‘covered security’’ to mean any ‘‘NMS stock’’ as defined under Rule 600(b)(47) of Regulation NMS. Rule 600(b)(47) of Regulation NMS defines an ‘‘NMS stock’’ as ‘‘any NMS security other than an option.’’ Rule 600(b)(46) of Regulation NMS defines an ‘‘NMS security’’ as ‘‘any security or class of securities for which transaction reports are collected, processed, and made available pursuant to an effective transaction reporting plan, or an effective national market system plan for reporting transactions in listed options.’’ 17 CFR 242.201(a)(1); 17 CFR 242.600(b)(46); and 17 CFR 242.600(b)(47). 6 Rule 201(a)(9) states that the term ‘‘trading center’’ shall have the same meaning as in Rule 600(b)(78) of Regulation NMS. Rule 600(b)(78) defines a ‘‘trading center’’ as ‘‘a national securities exchange or national securities association that operates an SRO trading facility, an alternative trading system, an exchange market maker, an OTC market maker, or any other broker or dealer that executes orders internally by trading as principal or crossing orders as agent.’’ 17 CFR 242.600(b)(78). 7 17 CFR 242.201(b)(1). See also Division of Trading & Markets, Responses to Frequently Asked Questions Concerning Rule 201 of Regulation SHO, Q&A Nos. 2.1 and 2.2 (concerning the duration of a short sale price test restriction). 8 The ‘‘System’’ is defined in BATS Rule 1.5(aa) as ‘‘the electronic communications and trading facility designated by the Board through which securities orders of Users are consolidated for ranking, execution and, when applicable, routing away.’’ E:\FR\FM\31JAN1.SGM 31JAN1

Agencies

[Federal Register Volume 76, Number 20 (Monday, January 31, 2011)]
[Notices]
[Pages 5417-5418]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-1985]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63764; File No. SR-MSRB-2010-17]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Order Granting Approval of Proposed Rule Change Consisting of 
Amendments to Rule A-3, on Membership on the Board

January 25, 2011.

I. Introduction

    On November 30, 2010, the Municipal Securities Rulemaking Board 
(``MSRB'' or ``Board''), 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 consisting of amendments to Rule A-3, on 
membership on the Board, in order to establish a Nominating Committee 
in compliance with MSRB transitional Rule A-3(i). The proposed rule 
change was published for comment in the Federal Register on December 
17, 2010.\3\ The Commission received no comment letters about the 
proposed rule change.\4\ This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 63533 (December 13, 
2010), 75 FR 79061 (December 17, 2010) (the ``Commission's 
Notice'').
    \4\ On January 13, 2011, Commissioner Aguilar, along with 
Michael E. Coe, Counsel to the Commissioner, met with 
representatives of the National Association of Independent Public 
Finance Advisors to discuss the proposed rule change among other 
matters. See Memorandum from Michael E. Coe, dated January 13, 2011.
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II. Description of the Proposed Rule Change

    The purpose of the proposed rule change is to make changes to MSRB 
Rule A-3(c) as are necessary and appropriate prior to the creation of 
the Nominating Committee of the MSRB.
    On September 30, 2010, the SEC approved MSRB Rule A-3(i), a 
transitional rule for MSRB fiscal year 2011 intended to implement the 
requirements of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, Public Law 111-203, 124 Stat. 1376 (2010) (the ``Dodd-
Frank Act'').\5\ The transitional rule provides that on or after 
October 1, 2010, and prior to the formation of the Nominating Committee 
for purposes of nominating Board members for fiscal year 2012, the 
Board will amend the provisions of Rule A-3(c) to (a) reflect the 
composition of the Board as provided under the Dodd-Frank Act, (b) 
assure that the Nominating Committee will be composed of a majority of 
public members and will have fair representation of broker-dealers, 
bank dealers, and municipal advisors, and (c) reflect such other 
considerations consistent with the provisions of Section 15B of the 
Exchange Act and the Dodd-Frank Act as the Board deems appropriate. The 
proposed rule change is intended to amend Rule A-3(c) to comply with 
the requirements of transitional Rule A-3(i), as approved by the SEC.
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    \5\ See Exchange Act Release No. 63025 (September 30, 2010), 75 
FR 61806 (October 6, 2010).
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    Consistent with Rule A-3(i), the Nominating Committee (hereinafter, 
``Nominating and Governance Committee'') would consist of eleven 
members, six of whom would be public members and five of whom would be 
industry members. The Chair of the Committee would be a public member. 
Establishing an eleven member committee would allow for fair 
representation of regulated entities by reserving five positions for 
brokers, dealers, municipal securities dealers and municipal advisors.
    Each constituency identified in the Dodd-Frank Act would be 
guaranteed a minimum of one seat on the Nominating and Governance 
Committee but the level of each constituency would be capped to avoid 
overweighting of any one over the others. These ranges of membership 
are as follows:
     Six public members consisting of (a) at least one, but no 
more than three, representative of institutional or retail investors; 
(b) at least one, but no more than three, representative of municipal 
entities; (c) at least one, but no more than three, members of the 
public with knowledge of or experience in the municipal industry and 
not representative of investors or municipal entities;\6\ and
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    \6\ In order to ensure balance on the committee and reflect the 
breadth of public representatives on the Board, the proposal would 
require one to three committee members be selected from Board 
members who are not representative of municipal entities or 
investors.
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     Five regulated members, consisting of (a) at least one, 
but no more than two, representative of broker-dealers; (b) at

[[Page 5418]]

least one, but no more than two, representative of bank dealers; and 
(c) at least one, but no more than two, representative of non-dealer 
municipal advisors.
    The Board believes this formulation is consistent with the Dodd-
Frank Act and Rule A-3(i) in that it provides for a majority of public 
members on the Committee and fair representation of regulated entities. 
The MSRB also believes it is important that the Chair of the Nominating 
and Governance Committee be a public member, both as a governance best 
practice and in recognition of the majority of public members on the 
Board, as mandated by the Dodd-Frank Act.
    A more complete description of the proposal is contained in the 
Commission's Notice.\7\
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    \7\ See supra note 3.
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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 \8\ and, in particular, the 
requirements of Section 15B(b)(2)(B) of the Exchange Act \9\ and the 
rules and regulations thereunder. Section 15B(b)(2)(B) of the Exchange 
Act provides that the MSRB's rules shall:
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    \8\ 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).
    \9\ 15 U.S.C. 78o-4(b)(2)(B).

    Establish fair procedures for the nomination and election of 
members of the Board and assure fair representation in such 
nominations and elections of public representatives, broker dealer 
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representatives, bank representatives, and advisor representatives.

    The Commission believes that the proposed rule change is consistent 
with the Exchange Act as amended by the Dodd-Frank Act, in that it 
would provide for the creation of an MSRB Nominating and Governance 
Committee that reflects the composition of the Board as provided under 
the Dodd-Frank Act and would help assure that the Nominating and 
Governance Committee would be composed of a majority of public members 
and have fair representation of broker-dealers, bank dealers, and 
municipal advisors, consistent with MSRB Rule A-3(i) as approved by the 
SEC.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Exchange Act,\10\ that the proposed rule change (SR-MSRB-2010-17), be, 
and it hereby is, approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-1985 Filed 1-28-11; 8:45 am]
BILLING CODE 8011-01-P