Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Waive MSRB Market Activity Fees Related to Transactions With the Municipal Liquidity Facility Established by the Board of Governors of the Federal Reserve System, 34661-34663 [2020-12167]

Download as PDF Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Notices This Notice will be published in the Federal Register. Erica A. Barker, Secretary. [FR Doc. 2020–12209 Filed 6–4–20; 8:45 am] BILLING CODE 7710–FW–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–88986; File No. SR–MSRB– 2020–03] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Waive MSRB Market Activity Fees Related to Transactions With the Municipal Liquidity Facility Established by the Board of Governors of the Federal Reserve System June 1, 2020. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 28, 2020 the Municipal Securities Rulemaking Board (‘‘MSRB’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the MSRB. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. lotter on DSK9F5VC42PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The MSRB filed with the Commission a proposed rule change consisting of a proposed amendment to MSRB Rule A– 13 regarding underwriting and transaction assessments for brokers, dealers and municipal securities dealers (collectively ‘‘dealers’’) to waive certain underwriting, transaction and technology assessments (‘‘market activity fees’’) related to transactions with the Municipal Liquidity Facility (‘‘Facility’’ or ‘‘MLF’’) established by the Board of Governors of the Federal Reserve System (‘‘Federal Reserve’’) (the ‘‘proposed rule change’’) as described below. The MSRB has designated the proposed rule change as ‘‘establishing or changing a due, fee, or other charge’’ under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) 4 thereunder, 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 2 17 VerDate Sep<11>2014 18:21 Jun 04, 2020 Jkt 250001 which renders the proposal effective upon filing with the Commission. The text of the proposed rule change is available on the MSRB’s website at www.msrb.org/Rules-andInterpretations/SEC-Filings/2020Filings.aspx, 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 MSRB is closely monitoring the impact of the coronavirus disease (‘‘COVID–19’’) pandemic on the municipal market and municipal market participants, including issuers, investors, dealers and municipal advisors.5 The Federal Reserve, noting that ‘‘[t]he municipal securities market is an important part of the financial system, which helps provide states, cities, and counties (and their political subdivisions and other governmental entities) with the funding needed to provide essential public services to their citizens,’’ 6 established the MLF, which has been authorized under Section 13(3) of the Federal Reserve Act.7 ‘‘The immediate purpose of the MLF is to enhance the liquidity of the primary short-term municipal securities market through the purchase at issuance of Tax Anticipation Notes (‘‘TANs’’), Tax and Revenue Anticipation Notes (‘‘TRANs’’), Bond Anticipation Notes (‘‘BANs’’), and similar short-term notes’’ (collectively, ‘‘Eligible Notes’’).8 5 Wall Street Journal: How the Muni Market Became the Epicenter of the Liquidity Crisis (April 2, 2020) https://www.wsj.com/articles/how-themuni-market-became-the-epicenter-of-the-liquiditycrisis-11585823404. 6 Federal Reserve Bank of New York, FAQs: Municipal Liquidity Facility (‘‘Fed FAQs’’) https:// www.newyorkfed.org/markets/municipal-liquidityfacility/municipal-liquidity-facility-faq. 7 12 U.S.C. 343 (1932). 8 Fed FAQs. PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 34661 The MSRB continues to monitor announcements by the Federal Reserve to understand how the Facility will operate in conjunction with MSRB rules.9 The Facility intends to provide a liquidity backstop to certain issuers through a special purpose vehicle (‘‘SPV’’). The SPV may purchase certain Eligible Notes through a direct sale to the SPV or, if there is a competitive sale process, the SPV generally will not submit a bid in the competitive sale process, but instead may agree to purchase such municipal securities that are not awarded to other bidders.10 Based on the information currently available regarding the operation of the MLF, the MSRB believes that the MLF would be a customer for purposes of Rule A–13 and, therefore, the underwriting, transaction and technology assessments under Rule A– 13 would be applicable to dealers’ transactions with the MLF. The MSRB recognizes that dealers are experiencing operational challenges coupled with unprecedented conditions in the municipal market due to the COVID–19 pandemic.11 The MSRB is proposing to waive these market activity fees for transactions conducted with the MLF. Specifically, the MSRB is proposing to provide a temporary waiver to dealers for the assessment of the: • Underwriting fee in the amount .00275% ($.0275 per $1,000) of the par value pursuant to Rule A–13(c)(i) on the par amount of the primary offering that is purchased by or on behalf of the MLF; • Transaction fee on sales to the MLF in the amount equal to .001% ($.01 per $1,000) of the total par value of sales to customers that it reports to the Board under MSRB Rule G–14(b), on reports of sales and purchases, pursuant to Rule A–13(d)(ii); and • Technology fee of $1.00 per transaction for sales to the MLF that it reports to the Board under Rule G–14(b), pursuant to Rule A–13(d)(iv)(b). The MSRB intends the waiver to be temporary and to expire at the same time as the MLF. The MLF is currently scheduled to cease purchasing Eligible Notes on December 31, 2020, unless the Federal Reserve Board of Governors and the Treasury Department extend the program.12 The MSRB will waive the market activity fees assessed on 9 See e.g., Federal Reserve Bank of New York, Term Sheet regarding the Facility (May 11, 2020) (‘‘Fed Term Sheet’’) https://www.federalreserve.gov/ newsevents/pressreleases/files/monetary 20200511a1.pdf. 10 See Fed FAQs. 11 Supra note 5. 12 The Federal Reserve Bank will continue to fund the SPV after such date until the SPV’s underlying assets mature or are sold. See Fed Term Sheet. E:\FR\FM\05JNN1.SGM 05JNN1 34662 Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Notices transactions with the MLF by issuing a credit for the amount of the applicable assessment. The amount of the fees to be waived will be displayed on a monthly statement as a credit against the gross billing and netted to indicate the amount due. Consistent with Rule A– 13(e), the amount due is to be paid within 30 days of the sending of the invoice by the Board. 2. Statutory Basis The MSRB believes that the proposed rule change is consistent with Section 15B(b)(2)(C) of the Act,13 which provides that the MSRB’s rules shall: lotter on DSK9F5VC42PROD with NOTICES 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 and municipal financial products, to remove impediments to and perfect the mechanism of a free and open market in municipal securities and municipal financial products, and, in general, to protect investors, municipal entities, obligated persons, and the public interest. The MSRB believes that dealers’ transactions with the MLF will serve to facilitate the smooth functioning of the municipal securities market during times of strain resulting from the COVID–19 pandemic. Providing a waiver of market activity fees resulting from such transactions will help to provide liquidity for the municipal market and serve to remove impediments to and perfect the mechanism of a free and open market in municipal securities without impacting the protection of investors, municipal entities, obligated persons, and the public interest. The MSRB also believes that the proposed rule change is consistent with Section 15B(b)(2)(J) of the Act 14 which requires, in pertinent part, that the MSRB’s rules shall provide that each municipal securities broker, municipal securities dealer, and municipal advisor shall pay to the Board such reasonable fees and charges as may be necessary or appropriate to defray the costs and expenses of operating and administering the Board and that such rules shall specify the amount of such fees and charges. The MSRB recognizes that dealers are experiencing operational challenges coupled with unprecedented conditions in the municipal market due to the COVID–19 pandemic and believes this temporary waiver of certain market activity fees will provide some relief. 13 15 14 15 U.S.C. 78o–4(b)(2)(C). U.S.C. 78o–4(b)(2)(J). VerDate Sep<11>2014 18:21 Jun 04, 2020 Jkt 250001 The temporary waiver would be applicable to a limited number of transactions for a limited duration, consistent with the operation of the MLF.15 The MSRB believes that the waiver would not materially alter the total amount of fees collected by the MSRB or negatively impact its long-term sustainability, thereby continuing to ensure that the MSRB is sufficiently capitalized to meet its regulatory responsibilities. Accordingly, the MSRB believes that the proposed waiver of certain assessments on a temporary basis is reasonable and appropriate. B. Self-Regulatory Organization’s Statement on Burden on Competition Section 15B(b)(2)(C) of the Act 16 requires that MSRB rules be designed not to impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The goal of the proposed rule change is to provide relief during the exigent circumstances of the COVID–19 pandemic. The relief will apply equally to all dealers and extend for the duration of the MLF.17 Accordingly, the MSRB does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. 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. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 18 and paragraph (f) of Rule 19b–4 thereunder.19 At any time within 60 days of the filing of the 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. 15 See Fed Term Sheet. U.S.C. 78o–4(b)(2)(C). 17 Currently, the MLF is planning to only purchase Eligible Notes until December 31, 2020. See Fed Term Sheet. 18 15 U.S.C. 78s(b)(3)(A). 19 17 CFR 240.19b–4(f). 16 15 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 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 email to rule-comments@ sec.gov. Please include File Number SR– MSRB–2020–03 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549. All submissions should refer to File Number SR–MSRB–2020–03. This file number should be included on the subject line if email 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 website (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 website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the MSRB. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–MSRB–2020–03 and should be submitted on or before June 26, 2020. E:\FR\FM\05JNN1.SGM 05JNN1 Federal Register / Vol. 85, No. 109 / Friday, June 5, 2020 / Notices For the Commission, pursuant to delegated authority.20 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–12167 Filed 6–4–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–88979; File No. SR– NYSEAMER–2020–40] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE American Equities Price List and the NYSE American Options Fee Schedule Related to Co-Location Services June 1, 2020. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on May 18, 2020, NYSE American LLC (‘‘NYSE American’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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 proposes to amend the NYSE American Equities Price List and the NYSE American Options Fee Schedule (together, the ‘‘Price List and Fee Schedule’’) related to co-location services with respect to connectivity to the ICE Data Global Index and to waive any change fees that a User would otherwise incur as a result of the proposed change. The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. lotter on DSK9F5VC42PROD with NOTICES 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, 20 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 18:21 Jun 04, 2020 Jkt 250001 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 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Price List and Fee Schedule related to co-location 4 services offered by the Exchange with respect to connectivity to the ICE Data Global Index (‘‘GIF’’) and to waive any change fees that a User would otherwise incur as a result of the proposed change. Proposed Change The Exchange offers Users 5 connectivity to data feeds from third party markets and other content service providers (‘‘Third Party Data Feeds’’).6 The list of Third Party Data Feeds is set forth in the Price List and Fee Schedule, and includes connectivity to the GIF for a monthly connectivity fee of $100.7 4 The Exchange initially filed rule changes relating to its co-location services with the Securities and Exchange Commission (‘‘Commission’’) in 2010. See Securities Exchange Act Release No. 62961 (September 21, 2010), 75 FR 59299 (September 27, 2010) (SR–NYSEAmex–2010– 80). The Exchange is an indirect subsidiary of Intercontinental Exchange, Inc. (‘‘ICE’’). Through its ICE Data Services (‘‘IDS’’) business, ICE operates a data center in Mahwah, New Jersey (the ‘‘data center’’), from which the Exchange provides colocation services to Users. 5 For purposes of the Exchange’s co-location services, a ‘‘User’’ means any market participant that requests to receive co-location services directly from the Exchange. See Securities Exchange Act Release No. 76009 (September 29, 2015), 80 FR 60213 (October 5, 2015) (SR–NYSEMKT–2015–67). As specified in the Price List and Fee Schedule, a User that incurs co-location fees for a particular colocation service pursuant thereto would not be subject to co-location fees for the same co-location service charged by the Exchange’s affiliates the New York Stock Exchange LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE National, Inc. (collectively, the ‘‘Affiliate SROs’’). Each Affiliate SRO has submitted substantially the same proposed rule change to propose the changes described herein. See SR–NYSE–2020–46, SR–NYSEArca–2020–49, SR–NYSECHX–2020–17, and SR–NYSENAT–2020– 19. 6 See Securities Exchange Act Release No. 80309 (March 24, 2017), 82 FR 15725 (March 30, 2017) (SR–NYSEMKT–2016–63) (notice of filing of Partial Amendment No. 4 and order granting accelerated approval of a proposed rule change, as modified by Amendment Nos. 1 through 4, to amend the colocation services offered by the Exchange to add certain access and connectivity fees). 7 The Exchange has an indirect interest in the GIF because ICE is the Exchange’s ultimate parent. See id., at 15733, and Securities Exchange Act Release PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 34663 ICE, which publishes the GIF, announced to its customers that connect to the GIF that it will no longer offer the GIF as a stand-alone product. Accordingly, the Exchange proposes to cease offering connectivity to the GIF once it is no longer available. The Exchange has been informed by ICE that cessation is currently expected to occur before the end of 2020. The Exchange will announce the operative date through a customer notice. Users are subject to a change fee if they request a change to one or more existing co-location services.8 The Exchange proposes to waive any change fees that a User would otherwise incur as a result of the proposed change. In order to implement the proposed change, the Exchange proposes to make the following changes to the section entitled ‘‘Connectivity to Third Party Data Feeds’’: • In the first paragraph and in the table of Third Party Data Feeds, add an asterisk after ‘‘ICE Data Global Index.’’ • Following the table of Third Party Data Feeds, add the following text: * ICE will cease to offer the GIF as a stand-alone product, which the Exchange has been informed by ICE is currently expected to occur before the end of 2020. The Exchange will announce the operative date through a customer notice. Any change fees that a User would otherwise incur as a result of the proposed change will be waived. The GIF includes the values of various indices and exchange traded product data.9 Based on information published by ICE Data Services, all the data in the GIF was already available on the ICE Data Services Consolidated Feed (‘‘Consolidated Feed’’).10 The Exchange offers connectivity to the Consolidated Feed, and does not propose to change No. 79672 (December 22, 2016), 81 FR 96080 (December 29, 2016) (SR–NYSEMKT–2016–63) (notice of filing of Amendments Nos. 2 and 3 to proposed rule change to amend the co-location services offered by the Exchange to add certain access and connectivity fees). 8 See Securities Exchange Act Release Nos. 67664 (August 15, 2012), 77 FR 50733 (August 22, 2012) (SR–NYSEMKT–2012–10) (order approving a proposed rule change amending the NYSE MKT Price List to provide for additional co-location services and establish related fees), and 67665 (August 15, 2012), 77 FR 50734 (August 22, 2012) (SR–NYSEMKT–2012–11) (order approving a proposed rule change amending the NYSE Amex Options Fee Schedule to provide for additional colocation services and establish related fees). 9 The Exchange understands that some of the indices may include Exchange or Affiliate SRO data as underlying components, but the GIF does not include those underlying components or other information directly from the Exchange and Affiliate SROs. 10 See ‘‘Consolidated Data Feed Coverage List— Indices and Indicators’’ at https://www.theice.com/ market-data/connectivity-and-feeds/consolidatedfeed/coverage-list. E:\FR\FM\05JNN1.SGM 05JNN1

Agencies

[Federal Register Volume 85, Number 109 (Friday, June 5, 2020)]
[Notices]
[Pages 34661-34663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12167]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88986; File No. SR-MSRB-2020-03]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change To Waive MSRB Market Activity Fees Related to Transactions With 
the Municipal Liquidity Facility Established by the Board of Governors 
of the Federal Reserve System

June 1, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on May 28, 2020 the Municipal Securities 
Rulemaking Board (``MSRB'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the MSRB. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \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 filed with the Commission a proposed rule change 
consisting of a proposed amendment to MSRB Rule A-13 regarding 
underwriting and transaction assessments for brokers, dealers and 
municipal securities dealers (collectively ``dealers'') to waive 
certain underwriting, transaction and technology assessments (``market 
activity fees'') related to transactions with the Municipal Liquidity 
Facility (``Facility'' or ``MLF'') established by the Board of 
Governors of the Federal Reserve System (``Federal Reserve'') (the 
``proposed rule change'') as described below. The MSRB has designated 
the proposed rule change as ``establishing or changing a due, fee, or 
other charge'' under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 
19b-4(f)(2) \4\ thereunder, which renders the proposal effective upon 
filing with the Commission.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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    The text of the proposed rule change is available on the MSRB's 
website at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2020-Filings.aspx, 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 MSRB is closely monitoring the impact of the coronavirus 
disease (``COVID-19'') pandemic on the municipal market and municipal 
market participants, including issuers, investors, dealers and 
municipal advisors.\5\ The Federal Reserve, noting that ``[t]he 
municipal securities market is an important part of the financial 
system, which helps provide states, cities, and counties (and their 
political subdivisions and other governmental entities) with the 
funding needed to provide essential public services to their 
citizens,'' \6\ established the MLF, which has been authorized under 
Section 13(3) of the Federal Reserve Act.\7\ ``The immediate purpose of 
the MLF is to enhance the liquidity of the primary short-term municipal 
securities market through the purchase at issuance of Tax Anticipation 
Notes (``TANs''), Tax and Revenue Anticipation Notes (``TRANs''), Bond 
Anticipation Notes (``BANs''), and similar short-term notes'' 
(collectively, ``Eligible Notes'').\8\
---------------------------------------------------------------------------

    \5\ Wall Street Journal: How the Muni Market Became the 
Epicenter of the Liquidity Crisis (April 2, 2020) https://www.wsj.com/articles/how-the-muni-market-became-the-epicenter-of-the-liquidity-crisis-11585823404.
    \6\ Federal Reserve Bank of New York, FAQs: Municipal Liquidity 
Facility (``Fed FAQs'') https://www.newyorkfed.org/markets/municipal-liquidity-facility/municipal-liquidity-facility-faq.
    \7\ 12 U.S.C. 343 (1932).
    \8\ Fed FAQs.
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    The MSRB continues to monitor announcements by the Federal Reserve 
to understand how the Facility will operate in conjunction with MSRB 
rules.\9\ The Facility intends to provide a liquidity backstop to 
certain issuers through a special purpose vehicle (``SPV''). The SPV 
may purchase certain Eligible Notes through a direct sale to the SPV 
or, if there is a competitive sale process, the SPV generally will not 
submit a bid in the competitive sale process, but instead may agree to 
purchase such municipal securities that are not awarded to other 
bidders.\10\
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    \9\ See e.g., Federal Reserve Bank of New York, Term Sheet 
regarding the Facility (May 11, 2020) (``Fed Term Sheet'') https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200511a1.pdf.
    \10\ See Fed FAQs.
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    Based on the information currently available regarding the 
operation of the MLF, the MSRB believes that the MLF would be a 
customer for purposes of Rule A-13 and, therefore, the underwriting, 
transaction and technology assessments under Rule A-13 would be 
applicable to dealers' transactions with the MLF. The MSRB recognizes 
that dealers are experiencing operational challenges coupled with 
unprecedented conditions in the municipal market due to the COVID-19 
pandemic.\11\ The MSRB is proposing to waive these market activity fees 
for transactions conducted with the MLF. Specifically, the MSRB is 
proposing to provide a temporary waiver to dealers for the assessment 
of the:
---------------------------------------------------------------------------

    \11\ Supra note 5.
---------------------------------------------------------------------------

     Underwriting fee in the amount .00275% ($.0275 per $1,000) 
of the par value pursuant to Rule A-13(c)(i) on the par amount of the 
primary offering that is purchased by or on behalf of the MLF;
     Transaction fee on sales to the MLF in the amount equal to 
.001% ($.01 per $1,000) of the total par value of sales to customers 
that it reports to the Board under MSRB Rule G-14(b), on reports of 
sales and purchases, pursuant to Rule A-13(d)(ii); and
     Technology fee of $1.00 per transaction for sales to the 
MLF that it reports to the Board under Rule G-14(b), pursuant to Rule 
A-13(d)(iv)(b).
    The MSRB intends the waiver to be temporary and to expire at the 
same time as the MLF. The MLF is currently scheduled to cease 
purchasing Eligible Notes on December 31, 2020, unless the Federal 
Reserve Board of Governors and the Treasury Department extend the 
program.\12\ The MSRB will waive the market activity fees assessed on

[[Page 34662]]

transactions with the MLF by issuing a credit for the amount of the 
applicable assessment. The amount of the fees to be waived will be 
displayed on a monthly statement as a credit against the gross billing 
and netted to indicate the amount due. Consistent with Rule A-13(e), 
the amount due is to be paid within 30 days of the sending of the 
invoice by the Board.
---------------------------------------------------------------------------

    \12\ The Federal Reserve Bank will continue to fund the SPV 
after such date until the SPV's underlying assets mature or are 
sold. See Fed Term Sheet.
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2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with 
Section 15B(b)(2)(C) of the Act,\13\ which provides that the MSRB's 
rules shall:
---------------------------------------------------------------------------

    \13\ 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 and 
municipal financial products, to remove impediments to and perfect 
the mechanism of a free and open market in municipal securities and 
municipal financial products, and, in general, to protect investors, 
---------------------------------------------------------------------------
municipal entities, obligated persons, and the public interest.

    The MSRB believes that dealers' transactions with the MLF will 
serve to facilitate the smooth functioning of the municipal securities 
market during times of strain resulting from the COVID-19 pandemic. 
Providing a waiver of market activity fees resulting from such 
transactions will help to provide liquidity for the municipal market 
and serve to remove impediments to and perfect the mechanism of a free 
and open market in municipal securities without impacting the 
protection of investors, municipal entities, obligated persons, and the 
public interest.
    The MSRB also believes that the proposed rule change is consistent 
with Section 15B(b)(2)(J) of the Act \14\ which requires, in pertinent 
part, that the MSRB's rules shall provide that each municipal 
securities broker, municipal securities dealer, and municipal advisor 
shall pay to the Board such reasonable fees and charges as may be 
necessary or appropriate to defray the costs and expenses of operating 
and administering the Board and that such rules shall specify the 
amount of such fees and charges.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78o-4(b)(2)(J).
---------------------------------------------------------------------------

    The MSRB recognizes that dealers are experiencing operational 
challenges coupled with unprecedented conditions in the municipal 
market due to the COVID-19 pandemic and believes this temporary waiver 
of certain market activity fees will provide some relief. The temporary 
waiver would be applicable to a limited number of transactions for a 
limited duration, consistent with the operation of the MLF.\15\ The 
MSRB believes that the waiver would not materially alter the total 
amount of fees collected by the MSRB or negatively impact its long-term 
sustainability, thereby continuing to ensure that the MSRB is 
sufficiently capitalized to meet its regulatory responsibilities. 
Accordingly, the MSRB believes that the proposed waiver of certain 
assessments on a temporary basis is reasonable and appropriate.
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    \15\ See Fed Term Sheet.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Section 15B(b)(2)(C) of the Act \16\ requires that MSRB rules be 
designed not to impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act. The goal of the 
proposed rule change is to provide relief during the exigent 
circumstances of the COVID-19 pandemic. The relief will apply equally 
to all dealers and extend for the duration of the MLF.\17\ Accordingly, 
the MSRB does not believe that the proposed rule change would result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Exchange Act.
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    \16\ 15 U.S.C. 78o-4(b)(2)(C).
    \17\ Currently, the MLF is planning to only purchase Eligible 
Notes until December 31, 2020. See Fed Term Sheet.
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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.

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

    The foregoing proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \18\ and paragraph (f) of Rule 19b-4 
thereunder.\19\ At any time within 60 days of the filing of the 
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.
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change 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 email to [email protected]. Please include 
File Number SR-MSRB-2020-03 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to File Number SR-MSRB-2020-03. This file 
number should be included on the subject line if email 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 website (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 website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the MSRB. All comments received 
will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-MSRB-2020-03 and should be submitted on 
or before June 26, 2020.


[[Page 34663]]


    For the Commission, pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-12167 Filed 6-4-20; 8:45 am]
 BILLING CODE 8011-01-P
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