Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend MSRB Rule A-12, on Registration, and Accompanying Form A-12 Changes, 78730-78735 [2022-27783]
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more disclosure events or proceedings
to $155; (2) the $45 FINRA Annual
System Processing Fee Assessed only
during Renewals to $70; and (3) the
electronic Fingerprint Fees from $15 to
$20 in accordance with an adjustment to
FINRA’s fees 21 does not impose an
undue burden on competition because
the Exchange will not be collecting or
retaining these fees, therefore, the
Exchange will not be in a position to
apply them in an inequitable or unfairly
discriminatory manner. The proposal
will reflect the fees that will be assessed
by FINRA to all Members who register
or require fingerprints as of January 2,
2023, and January 2, 2024 respectively.
Similarly, the Exchange believes it
does not impose an undue burden on
competition to correct the paper
Fingerprint Fees to reflect the reduced
FBI Fee of $11.25 because the Exchange
will not be collecting or retaining these
fees, therefore, the Exchange will not be
in a position to apply them in an
inequitable or unfairly discriminatory
manner.
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.
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act,22 and Rule
19b–4(f)(2) 23 thereunder. 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. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or 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:
21 The $20 FINRA Fee is in addition to the $11.25
FBI Fee except for the second fingerprint
transaction.
22 15 U.S.C. 78s(b)(3)(A)(ii).
23 17 CFR 240.19b–4(f)(2).
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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–
EMERALD–2022–36 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–EMERALD–2022–36. 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 Exchange. 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–EMERALD–2022–36 and
should be submitted on or before
January 12, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–27788 Filed 12–21–22; 8:45 am]
BILLING CODE 8011–01–P
24 17
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CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96516; File No. SR–MSRB–
2022–10]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend MSRB Rule A–12,
on Registration, and Accompanying
Form A–12 Changes
December 16, 2022.
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 December 13, 2022 the Municipal
Securities Rulemaking Board (‘‘MSRB’’
or ‘‘Board’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I and II,
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.
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
amendments to MSRB Rule A–12, on
registration, and accompanying Form
A–12 3 changes that are intended to
modernize and streamline the MSRB
registration process for brokers, dealers
and municipal securities dealers
(collectively, a ‘‘dealer’’ or ‘‘dealers’’)
and municipal advisors, (together with
dealers, a ‘‘registrant,’’ ‘‘registrants’’ or
‘‘regulated entities’’) and provide
additional information to the MSRB and
examining authorities for regulatory
purposes. Specifically, the proposed
rule change consists of amendments to
Rule A–12 to (i) remove a PDF upload
requirement for notification to the
appropriate regulatory agency or
registered securities association and
replace it with a requirement to provide
the required notice information directly
on Form A–12; (ii) make explicit the
notification requirement for dealers
when adding a new line of business via
Form A–12; (iii) require registrants to
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Form A–12 is the MSRB’s single, consolidated
registration form used for initial registration as a
dealer or municipal advisor, all registration
amendments, including withdrawal from
registration, and the annual affirmation process.
Prior to registration with the MSRB, each dealer and
municipal advisor must first register with, and
receive approval from, the Commission.
2 17
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provide, as applicable, information
about predecessor firm registrations; (iv)
require municipal securities dealers to
identify the appropriate regulatory
agency that is their designated
examining authority; (v) require the
primary regulatory contact of a
municipal advisor firm to be duly
qualified as a municipal advisor
principal by having passed the
Municipal Advisor Principal
Qualification Examination (Series 54);
(vi) extend the time period for regulated
entities to annually affirm the
information on Form A–12; (vii) make
technical amendments to Rule A–12;
and finally, make accompanying
amendments to Form A–12
(collectively, the ‘‘proposed rule
change’’).
The MSRB has designated the
proposed rule change as constituting a
‘‘non-controversial’’ rule change under
Section 19(b)(3)(A) 4 of the Act and Rule
19b–4(f)(6) 5 thereunder, which renders
the proposal effective upon receipt of
this filing by the Commission. The
MSRB proposes an operative date of
January 1, 2023.
The text of the proposed rule change
is available on the MSRB’s website at
https://msrb.org/2022-SEC-Filings, at
the MSRB’s principal office, and at the
Commission’s Public Reference Room.
MSRB believes that these changes will
make it more efficient and less
burdensome for regulated entities to
complete the form. Also, the proposed
rule change would make clarifying
changes to Form A–12, in furtherance of
form modernization.6 The MSRB also
believes the proposed rule change
would provide additional information to
support the MSRB and the appropriate
regulatory agencies in their regulatory
purposes.
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.
Remove Separate Documentation for the
Notice Requirement
Rule A–12(a) requires that prior to
registering with the MSRB, regulated
entities must register with, and be
approved by the SEC. In addition, Rule
A–12(a) requires, as applicable, that
notification be made to the appropriate
regulatory agency or registered
securities association of the intent to
engage in municipal securities and/or
municipal advisory activities and then
provide written evidence of such notice
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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
amend Rule A–12, on registration, to
modify certain MSRB registration
requirements. In addition, the rule
change reflects accompanying Form A–
12 changes that are designed to
modernize, streamline and improve the
data collected when registrants
complete, update or annually affirm
their Form A–12 information. The
4 15
5 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
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Proposed Rule Change and
Accompanying Form A–12 Changes
Rule A–12 requires regulated entities
to register with the MSRB prior to
engaging in any municipal securities
business or municipal advisory
activities and to complete Form A–12 in
the designated electronic format.7 The
MSRB proposed, and the SEC approved,
amendments to Rule A–12 in 2014 to
streamline MSRB registration
requirements into one rule and simplify
and clarify the MSRB registration
process and rule requirements for
registrants.8 As part of its ongoing
retrospective review, the MSRB has
identified aspects of the rule and the
accompanying proposed Form A–12
changes that can benefit from greater
clarity, simplification, and
modernization, as discussed below.
6 The MSRB’s Registration Manual would be
updated to reflect the proposed rule change and
proposed Form A–12 changes. The MSRB
Registration Manual is available at https://
www.msrb.org/sites/default/files/MSRBRegistration-Manual.pdf.
7 The information required by Form A–12 must be
submitted electronically through a web portal
located on the MSRB’s website. Registration with
the MSRB does not become effective until the
regulated entity is notified by the MSRB that its
Form A–12 is complete, and its initial registration
and annual registration fees have been received and
processed.
8 See Exchange Act Release No. 71255 (January 8,
2014), 79 FR 2483 (January 14, 2014) (File No. SR–
MSRB–2013–09) (Notice of Filing of a Proposed
Rule Change, as Modified by Amendment No. 1),
available at https://www.sec.gov/rules/sro/msrb/
2014/34-71255.pdf; See Exchange Act Release No.
71616 (February 26, 2014), 79 FR 12254 (March 4,
2014) (File No. SR–MSRB–2013–09) (Order
Granting Approval of Proposed Rule Change),
available at https://www.sec.gov/rules/sro/msrb/
2014/34-71616.pdf.
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to the MSRB.9 Because approval of
registration with the SEC is a
prerequisite to registration with the
MSRB, Rule A–12 does not require
registrants to evidence such notice to
the SEC. Currently dealers provide
written evidence to the MSRB of notice
having been provided to FINRA or, as
applicable, the FRB, FDIC, or OCC by
uploading a PDF document to Form A–
12.10
The proposed rule change to add
Supplementary Material .02, on
notification requirements, would
specify that dealers that, after initial
registration, subsequently amend their
registration status to add municipal
advisory activities as a line of business
must provide notice to FINRA or, as
applicable, the FRB, FDIC, or OCC of the
dealer’s intent to conduct the new
business activity. This aligns with the
goal that the appropriate regulatory
authority primarily responsible for
examining dealers’ compliance with
MSRB rules is continuously kept abreast
of such line of business changes that
subsequently add a new registration
category for a firm post the dealer’s
initial registration.11
The proposed rule change also would
streamline the process for a dealer to
inform the MSRB that the requisite
notification was made. Rather than
creating a separate written statement,
the proposed rule change would require
information relevant to the requisite
notification be provided on Form A–12.
Specifically, rather than uploading a
PDF document, dealers will be required
to input the requisite information (the
name of the person who is the firm’s
point of contact at the registered
9 The term ‘‘appropriate regulatory agency,’’ with
respect to a municipal securities dealer, means the
Comptroller of the Currency (OCC), Board of
Governors of the Federal Reserve System (FRB), or
the Federal Deposit Insurance Corporation (FDIC),
and the SEC. With respect to municipal advisors,
‘‘appropriate regulatory agency’’ means the SEC.
See 15 U.S.C. 78c(a)(34)(A) and MSRB Rule D–14.
The appropriate registered securities association for
broker-dealers is the Financial Industry Regulatory
Authority (FINRA), as defined in 15 U.S.C. 78o–3.
10 Pursuant to Rule A–12(l), the MSRB
Registration Manual, as updated or amended from
time to time, is comprised of the specifications for
the reporting of information required under Rule A–
12. The Registration Manual notes that a signed
written notice must be uploaded as a PDF
document and should include, among other things,
the regulatory agency that was notified and the date
notification was given. See MSRB Registration
Manual at 13.
11 In instances where a FINRA-member firm may
have initially registered with the MSRB only as a
municipal advisor (i.e., the firm is not registered as
a dealer firm with the MSRB) and then
subsequently amends its registration status to add
the dealer registration category and municipal
securities business, notification must be provided to
FINRA and evidenced to the MSRB via a Form A–
12 amended filing.
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securities association or appropriate
regulatory agency, the email address
where the notification was sent, the date
of such notification and the intended
effective date the firm intends to begin
engaging in municipal securities and/or
municipal advisory activities) directly
into proposed Form A–12.
The MSRB believes that removing the
requirement to upload a PDF would
simplify completion of Form A–12
without diminishing the information
provided on the form. In addition,
removing the PDF upload requirement
and replacing it with the requirement to
provide the name and contact
information for a contact person at the
registered securities association or
appropriate regulatory agency would
provide the MSRB with more fulsome
and relevant information.
Succession Information
Presently, Rule A–12 does not require,
and Form A–12 does not collect,
information about successor firms. The
proposed rule change would amend
Rule A–12 to require regulated entities
to provide, as applicable, information
on successor firms on Form A–12. The
SEC’s applications for registration, Form
MA, application for municipal advisor
registration; Form BD, application for
broker-dealer registration; and Form
MSD, application for registration as a
municipal securities dealer all contain
questions about successor registrations
that must be completed as part of the
SEC registration process.12 As SEC
registration is a prerequisite to
registration with the MSRB, the
collection of this information would
align the collection of succession
information on Form A–12 with the
SEC, which would provide more
comprehensive and complete
registration information for the MSRB in
furtherance of regulatory consistency.
Proposed Form A–12 changes would
capture the required new succession
information by including a question
asking regulated entities to identify
whether it is a successor firm and if yes,
to provide the prior SEC and/or MSRB
identification number(s) of the
predecessor firm. The MSRB believes
that this information will support the
examination and enforcement activities
of other regulators by combining such
information with other information on
Form A–12 in one convenient location
accessible to such staff.
Appropriate Regulatory Agency
New subparagraph A–12(f) would be
added to require a municipal securities
12 See Form MA Item 3: Successions; Form BD
Section III; Form MSD Item 1(a).
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dealer to provide the name of the firm’s
appropriate regulatory agency (i.e., OCC,
FRB, or FDIC) and proposed Form A–12
changes would capture this information.
This new requirement would ensure
that the MSRB is kept informed of the
appropriate regulatory agency that is
responsible for examining the
registrant’s compliance with MSRB
rules and any changes thereto.
Designated Contacts
Pursuant to A–12(f), on designated
contacts, registrants must designate, on
Form A–12, a primary regulatory
contact, master account administrator,
billing contact, compliance contact, and
primary data quality contact.13
Registrants are required to provide the
name, title, address, phone number, and
email address of each of these
designated contacts on Form A–12 and
are permitted to designate one
individual for any or all the required
contacts.
The proposed rule change does not
alter any obligations of each of the
designated contacts, but promotes
consistency across the regulatory
framework, and makes technical
amendments to the rule to aid
registrants in the registration process.
Specifically, the proposed rule change
would create a similar requirement as
that under current subparagraph A–12(f)
for dealers by requiring the primary
regulatory contact 14 of a municipal
advisor firm (and optional regulatory
contact, if the firm opts to include this
contact on Form A–12) to be a duly
qualified municipal advisor principal by
having taken and passed the ‘‘Series
54.’’ 15 The proposed rule change is not
establishing a new regulatory or
compliance obligation since persons
associated with a municipal advisor
who are directly engaged in the
management, direction or supervision of
the municipal advisory activities of the
municipal advisor and its associated
persons have been required to be
qualified with the Series 54 since
November 30, 2021. The proposed rule
change is solely specifying that the
designated primary regulatory contact
and, if applicable, the optional
regulatory contact, who are persons
with the authority to receive official
communications from the Board are
qualified as a municipal advisor
13 Registrants may also provide an optional
regulatory contact, optional data quality contact
and/or optional technical contact.
14 The primary regulatory contact is charged with
receiving official communications from the MSRB.
15 As of November 30, 2021, all individuals acting
in the capacity of a municipal advisor principal
were required to become duly qualified with the
Series 54.
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principal. Additionally, the proposed
rule change aligns with existing
requirements for the primary regulatory
contact and optional regulatory contact,
as applicable, of dealers pursuant to
Rule A–12(f).
The proposed amendments to current
subparagraph A–12(f) would result in
the subparagraph being re-lettered as
Rule A–12(g) and current subparagraphs
A–12(g)–(l) would be re-lettered to
subparagraphs (h)–(m).
Form A–12 Annual Affirmation
The proposed rule change to current
subparagraph A–12(k), on Form A–12
annual affirmation, would extend and
set the dates for the annual affirmation
period. As a result, the current
regulatory requirement, which has the
annual affirmation period beginning on
January 1st and ending 17 business days
after that date each year, would be
amended to reflect an annual
affirmation period that runs from
January 1 to January 31 each year. This
proposed rule change would alleviate
confusion about the annual affirmation
filing deadline and simplify the
affirmation obligation to provide more
regulatory certainty for registrants.
Additionally, under this subparagraph,
any regulated entity that submits its
initial Form A–12 during the annual
affirmation period would not be
required to affirm Form A–12 during
that period for that calendar year. The
proposed rule change would reduce
regulated entities’ burdens and provide
greater certainty in the filing
requirements by providing that any
Form A–12 amendments made by
regulated entities during the month of
January would be deemed an annual
affirmation.16
Other Form A–12 Changes
In addition to the Rule A–12 and
accompanying Form A–12 changes
noted above, Form A–12 would include
the revisions identified below.
• General Information regarding
Registrant:
Æ Name: The field for ‘‘Name’’ would
be renamed to ‘‘Firm’s Legal Name.’’
Æ Doing-Business-As (DBA) Name:
The MSRB would add an optional text
field to Form A–12 for registrants to
include a ‘‘doing business as’’ name that
may differ from the firm’s legal name
provided on Form A–12.
• Types of Business Activity: Each
registrant is presently required to
identify its types of business activities
and multiple activities may be selected.
16 The annual affirmation is required to be
completed by the designated primary regulatory
contact, optional regulatory contact or compliance
contact.
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The following reflects the proposed
changes to the business activities
section of Form A–12 for the specified
registration categories.
Æ Broker/Dealer—Municipal Fund
Securities: ‘‘ABLE Program
Underwriting’’ and ‘‘ABLE Program
Sales’’ would be added to the list of
business activities from which to select.
Æ Broker/Dealer—Other: If registrants
select ‘‘Alternate Trading System’’ from
the existing list of business activities, a
new field ‘‘SEC Form ATS has been
filed’’ would then be displayed.
Registrants to whom such business
activity applies would check the box
affirming that the dealer is an SEC Form
ATS filer.
2. Statutory Basis
The MSRB believes that the proposed
rule change is consistent with Section
15B(b)(2)) of the Act,17 which provides
that the Board shall propose and adopt
rules to effect the purposes of the
Exchange Act with respect to
transactions in municipal securities
effected by brokers, dealers, and
municipal securities dealers and advice
provided to or on behalf of municipal
entities or obligated persons by brokers,
dealers, municipal securities dealers,
and municipal advisors with respect to
municipal financial products, the
issuance of municipal securities, and
solicitations of municipal entities or
obligated persons undertaken by
brokers, dealers municipal securities
dealers, and municipal advisors.
Section 15B(b)(2)(C) of the Act 18
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 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 the proposed rule
change is consistent with Section
15B(b)(2)(C) of the Act 19 because the
proposed rule change would remove
impediments to and perfect the
mechanism of a free and open market by
streamlining and simplifying the
registration process for new registrants
and the annual affirmation process for
existing regulated entities. Similarly, the
proposed rule change would remove
impediments by streamlining certain
registration-related processes, such as
removing the PDF upload requirement
and replacing it with a requirement to
complete requisite fields on Form A–12,
which would be a simpler and less
onerous component of the MSRB
registration process. Additionally, the
proposed rule change would promote
just and equitable principles of trade
because reducing burdens in the
registration process and annual
affirmation process would facilitate
better and timelier compliance with
Rule A–12 without negatively impacting
investors, issuers, or the public interest.
Moreover, the inclusion of a few
additional fields on Form A–12 would
promote clarity and ease in completing
Form A–12 during the initial
registration process and the subsequent
review, updating and affirming of such
information thereby removing
impediments to a free and open
municipal securities market by creating
a more efficient process.
The MSRB also believes that the
proposed rule change is consistent with
Section 15B(b)(2)(L)(iv) of the Act,20
which requires that rules adopted by the
Board not impose a regulatory burden
on small municipal advisors that is not
necessary or appropriate in the public
interest and for the protection of
investors, municipal entities, and
obligated persons, provided that there is
robust protection of investors against
fraud. The MSRB believes the proposed
rule change is consistent with Section
15B(b)(2)(L)(iv) 21 because the proposed
rule change would clarify and simplify
the registration process, as well as the
annual affirmation process, for all
municipal advisors, including small
municipal advisors.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Section 15B(b)(2)(C) of the Act
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.22 Section
15B(b)(2)(L)(iv) of the Act,23 requires
that rules adopted by the Board not
impose a regulatory burden on small
municipal advisors that is not necessary
or appropriate in the public interest and
for the protection of investors,
municipal entities, and obligated
20 15
17 15
U.S.C. 78o–4(b)(2).
18 15 U.S.C. 78o–4(b)(2)(C).
19 Id.
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18:01 Dec 21, 2022
U.S.C. 78o–4(b)(2)(L)(iv).
21 Id.
22 15
23 15
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U.S.C. 78o–4(b)(2)(C).
U.S.C. 78o–4(b)(2)(L)(iv).
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78733
persons, provided that there is robust
protection of investors against fraud.
The Board’s policy on the use of
economic analysis limits its application
regarding those rules for which the
Board seeks immediate effectiveness.24
The MSRB believes that on aggregate,
with offsetting impacts from various
components, the proposed rule changes
and proposed Form A–12 changes
would reduce the compliance burden
for regulated entities because the
proposed rule change would clarify and
simplify the registration process, as well
as the annual affirmation process, for all
municipal advisors, including small
municipal advisors. Small municipal
advisors typically have fewer associated
persons and, as a result, their resources
may be more limited, and the benefits
of the proposed rule change may
provide smaller municipal advisors a
greater benefit given their limited
resources. Finally, the proposed changes
to Form A–12 are designed to promote
the collection of information from all
municipal advisors so that the MSRB
and appropriate regulatory authorities
have more fulsome and useful
information from the Form A–12 data
submitted by registrants. Therefore, the
proposed rule change would not impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Exchange Act.
The proposed rule change would
modify Rule A–12 and Form A–12 for
the purposes of reducing regulatory
burdens, clarifying relevant information,
and enhancing usability for regulated
entities. First, on reducing regulatory
burdens, the proposed rule change
would extend the annual affirmation
period allowing regulated entities added
time to comply with the rule’s
requirements, and the proposed Form
A–12 changes are designed to reduce
the complexity of the form format.
Additionally, regulatory burdens are
reduced by simplification and
clarification of the regulatory
requirement—that being making the
annual affirmation period the whole
month of January (i.e., January 1 to
January 31 of each calendar year) rather
than seventeen business days after
January 1 of each calendar year. The
proposed rule change would also
streamline the process of notification to
the MSRB that the applicable
appropriate regulatory agency or
registered securities association has
been notified of the regulated entities
intent to engage in municipal securities
24 Policy on the Use of Economic Analysis in
MSRB Rulemaking, available at https://msrb.org/
Rules-and-Interpretations/Economic-AnalysisPolicy.aspx.
E:\FR\FM\22DEN1.SGM
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78734
Federal Register / Vol. 87, No. 245 / Thursday, December 22, 2022 / Notices
and/or municipal advisor activities by
removing the prescribed requirement of
uploading a PDF document. In place of
a document upload feature, Rule A–12
would require dealers to complete the
requisite fields on Form A–12 to fulfill
the notification requirement.
Next, the proposed changes specific to
Form A–12 would, among other things,
require municipal securities dealers to
identity the appropriate regulatory
agency that is the firm’s designated
examining authority.25 Also, proposed
form changes would require registrants
to provide the information for any
applicable predecessor firm as well as
optionally providing a ‘‘doing business
as’’ name that differs from a firm’s legal
name. All of the aforementioned
required information should be readily
available to regulated entities and thus
would not impose much burden on
regulated entities. Finally, on enhancing
usability, the proposed changes to Form
A–12 would also provide clearer
language to improve form usability for
regulated entities.
Finally, with respect to the proposed
rule change prescribing that the primary
regulatory contact and optional
regulatory contact, as applicable, be
qualified with the Series 54, the
proposed rule change is not establishing
a new regulatory nor compliance
obligation for municipal advisors.
Individuals associated with a municipal
advisor firm who are directly engaged in
the management, direction or
supervision of the municipal advisory
activities of the municipal advisor and
its associated persons have been
required to be qualified with the Series
54 since November 30, 2021. Thus, the
proposed rule change is only specifying
that the persons with the authority to
receive official communications from
the Board are qualified as a municipal
advisor principal. Additionally, the
proposed rule change aligns with
existing requirements for the primary
regulatory contact and optional
regulatory contact, as applicable, of
dealers pursuant to Rule A–12(f).
The MSRB believes that the proposed
rule change may improve the
operational efficiency of the municipal
securities market by eliminating
complexity concerning the annual
affirmation period, modifying outdated
requirements in the registration process,
and improving the usability of Form A–
12. Additionally, the proposed rule
change would lead to providing more
streamlined information to the SEC,
FINRA and other appropriate regulatory
25 For example, for municipal securities dealers,
the appropriate regulatory agency would be FDIC,
OCC, or the FRB.
VerDate Sep<11>2014
18:01 Dec 21, 2022
Jkt 259001
agencies. Finally, the MSRB believes the
proposed rule change would not impose
any burden on competition, as the
proposed rule change is equally
applicable to all regulated entities. The
MSRB does not believe that small,
regulated entities would be
disadvantaged by the proposed rule
change.
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
Pursuant to Section 19(b)(3)(A) 26 of
the Act and Rule 19b–4(f)(6) 27
thereunder, the MSRB has designated
the proposed rule change as one that
effects a change that: (i) does not
significantly affect the protection of
investors or the public interest; (ii) does
not impose any significant burden on
competition; and (iii) by its terms, does
not become operative for 30 days after
the date of the filing, or such shorter
time as the Commission may designate.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative until 30 days after the
date of filing.28 However, Rule 19b–
4(f)(6)(iii) 29 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest.30 The
MSRB has requested that the
Commission designate the proposed
rule change operative on January 1,
2023,31 as specified in Rule 19b–
4(f)(6)(iii).32
The MSRB notes that the proposed
rule change would not significantly alter
the substantive or underlying regulatory
obligations of regulated entities, and
would not require regulated entities to
make material changes to current
procedures. The proposed amendments
are designed to reduce compliance
26 15
U.S.C. 78s(b)(3)(A).
27 17 CFR 240.19b–4(f)(6).
28 Id.
29 17 CFR 240.19b–4(f)(6)(iii).
30 In addition, Rule 19b–4(f)(6)(iii) requires a selfregulatory organization to give the Commission
written notice of its intent to file a proposed rule
change, along with a brief description and text of
such proposed rule change, at least five business
days prior to the date of filing, or such shorter time
as designated by the Commission. The Commission
has designated a shorter time for delivery of such
written notice.
31 See SR–MSRB–2022–10 available at https://
msrb.org/sites/default/files/2022-12/SR-MSRB2022-10.pdf.
32 17 CFR 240.19b–4(f)(6)(iii).
PO 00000
Frm 00104
Fmt 4703
Sfmt 4703
burdens for regulated entities by
modernizing Rule A–12 and enhancing
the usability of Form A–12. The MSRB
further believes that an operative date of
January 1, 2023 would allow regulated
entities to benefit from the
enhancements to Form A–12 and would
promote regulatory consistency; as Form
A–12 data collected during the 2023
affirmation period will be consistent
whether a registrant completes the
annual affirmation on January 1, 2023,
or on or after January 12, 2023 (i.e., 30
days from the date of the filing). In
addition, the MSRB notes that a January
1st effective date would alleviate any
confusion about when the annual
affirmation period ends.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest. An
operative date of January 1, 2023 will
alleviate operational challenges and
confusion for regulated entities by
allowing the proposed rule change to
become operative on the first day of the
calendar year. Accordingly, the
Commission hereby waives the 30-day
operative delay specified in Rule 19b–
4(f)(6)(iii) and designates the proposed
rule change to be operative on January
1, 2023.33
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.
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–2022–10 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
33 For the purpose of waiving the 30-day
operative delay for this proposal, 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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Federal Register / Vol. 87, No. 245 / Thursday, December 22, 2022 / Notices
Commission, 100 F Street NE,
Washington, DC 20549.
All submissions should refer to File
Number SR–MSRB–2022–10. 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–2022–10 and should
be submitted on or before January 12,
2023.
For the Commission, pursuant to delegated
authority.34
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–27783 Filed 12–21–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
lotter on DSK11XQN23PROD with NOTICES1
[Release No. 34–96523; File No. SR–
PEARL–2022–58]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fee
Schedule Relating to FINRA Fees
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
18:01 Dec 21, 2022
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the MIAX Pearl Options Fee
Schedule (the ‘‘Fee Schedule’’) to reflect
adjustments to the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
Registration Fees and Fingerprinting
Fees.
While the changes proposed herein
are effective upon filing, the Exchange
has designated the additional processing
of each initial or amended Form U4,
Form U5 or Form BD and electronic
Fingerprint Processing Fees to become
operative on January 2, 2023.
Additionally, the Exchange designates
that the FINRA Annual System
Processing Fee Assessed only during
Renewals become operative on January
2, 2024.3 The amendments to the paper
Fingerprint Fees are immediately
effective.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/pearl at MIAX Pearl’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
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
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 aspects of such
statements.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 90176
(October 14, 2020), 85 FR 66592 (October 20, 2020)
(SR–FINRA–2020–032) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change
to Adjust FINRA Fees to Provide Sustainable
Funding for FINRA’s Regulatory Mission).
2 17
December 16, 2022.
34 17
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on December 8, 2022, MIAX PEARL,
LLC (‘‘MIAX Pearl’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I, II, and III 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.
Jkt 259001
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
78735
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Section 2)c) of the Fee Schedule, Web
CRD Fees, to reflect adjustments to the
FINRA Registration Fees and
Fingerprinting Fees.4 The FINRA fees
are collected and retained by FINRA via
Web CRD for the registration of
employees of Exchange Members 5
organizations that are not also FINRA
members (‘‘Non-FINRA members’’). The
Exchange merely lists these fees in its
Fee Schedule. The Exchange does not
collect or retain these fees.
The Exchange proposes to amend: (1)
the $110 fee for the additional
processing of each initial or amended
Form U4, Form U5 or Form BD that
includes the initial reporting,
amendment, or certification or one or
more disclosure events or proceedings
to $155; (2) the $45 FINRA Annual
System Processing Fee Assessed only
during Renewals to $70; and (3) the $15
Second Submission (Electronic)
Fingerprint Processing Fee to $20. Each
of these fees are listed within Section
2)c) of the Fee Schedule, Web CRD Fees.
These amendments are being made in
accordance with a FINRA rule change to
adjust to its fees.6
The Exchange also proposes to amend
the following Fingerprint Fees: (1) the
$29.50 Initial Submission (Electronic)
fee to $31.25; 7 (2) the $44.50 Initial
Submission (Paper) fee to $41.25; 8 (3)
the $29.50 Third Submission
(Electronic) fee to $31.25; 9 and (4) the
$44.50 Third Submission (Paper) fee to
$41.25.10 Specifically, today, the FBI
4 FINRA operates Web CRD, the central licensing
and registration system for the U.S. securities
industry. FINRA uses Web CRD to maintain the
qualification, employment and disciplinary
histories or registered associated persons of brokerdealers.
5 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
6 See note 3. FINRA noted in its rule change that
it was adjusting its fees to provide sustainable
funding for FINRA’s regulatory mission.
7 This fee includes a $20.00 FINRA fee and $11.25
FBI fee. See https://www.finra.org/registrationexams-ce/classic-crd/fingerprints/fingerprint-fees.
8 This fee includes a $30.00 FINRA fee and a
$11.25 FBI fee. See https://www.finra.org/
registration-exams-ce/classic-crd/fingerprints/
fingerprint-fees.
9 This fee includes a $20.00 FINRA fee and $11.25
FBI fee. See https://www.finra.org/registrationexams-ce/classic-crd/fingerprints/fingerprint-fees.
10 This fee includes a $30.00 FINRA fee and a
$11.25 FBI fee. See https://www.finra.org/
E:\FR\FM\22DEN1.SGM
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22DEN1
]]>Agencies
[Federal Register Volume 87, Number 245 (Thursday, December 22, 2022)]
[Notices]
[Pages 78730-78735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27783]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96516; File No. SR-MSRB-2022-10]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change To Amend MSRB Rule A-12, on Registration, and Accompanying Form
A-12 Changes
December 16, 2022.
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 December 13, 2022 the Municipal Securities
Rulemaking Board (``MSRB'' or ``Board'') filed with the Securities and
Exchange Commission (``SEC'' or ``Commission'') the proposed rule
change as described in Items I and II, 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.
---------------------------------------------------------------------------
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 amendments to MSRB Rule A-12, on registration, and
accompanying Form A-12 \3\ changes that are intended to modernize and
streamline the MSRB registration process for brokers, dealers and
municipal securities dealers (collectively, a ``dealer'' or
``dealers'') and municipal advisors, (together with dealers, a
``registrant,'' ``registrants'' or ``regulated entities'') and provide
additional information to the MSRB and examining authorities for
regulatory purposes. Specifically, the proposed rule change consists of
amendments to Rule A-12 to (i) remove a PDF upload requirement for
notification to the appropriate regulatory agency or registered
securities association and replace it with a requirement to provide the
required notice information directly on Form A-12; (ii) make explicit
the notification requirement for dealers when adding a new line of
business via Form A-12; (iii) require registrants to
[[Page 78731]]
provide, as applicable, information about predecessor firm
registrations; (iv) require municipal securities dealers to identify
the appropriate regulatory agency that is their designated examining
authority; (v) require the primary regulatory contact of a municipal
advisor firm to be duly qualified as a municipal advisor principal by
having passed the Municipal Advisor Principal Qualification Examination
(Series 54); (vi) extend the time period for regulated entities to
annually affirm the information on Form A-12; (vii) make technical
amendments to Rule A-12; and finally, make accompanying amendments to
Form A-12 (collectively, the ``proposed rule change'').
---------------------------------------------------------------------------
\3\ Form A-12 is the MSRB's single, consolidated registration
form used for initial registration as a dealer or municipal advisor,
all registration amendments, including withdrawal from registration,
and the annual affirmation process. Prior to registration with the
MSRB, each dealer and municipal advisor must first register with,
and receive approval from, the Commission.
---------------------------------------------------------------------------
The MSRB has designated the proposed rule change as constituting a
``non-controversial'' rule change under Section 19(b)(3)(A) \4\ of the
Act and Rule 19b-4(f)(6) \5\ thereunder, which renders the proposal
effective upon receipt of this filing by the Commission. The MSRB
proposes an operative date of January 1, 2023.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
The text of the proposed rule change is available on the MSRB's
website at https://msrb.org/2022-SEC-Filings, 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 amend Rule A-12, on registration, to
modify certain MSRB registration requirements. In addition, the rule
change reflects accompanying Form A-12 changes that are designed to
modernize, streamline and improve the data collected when registrants
complete, update or annually affirm their Form A-12 information. The
MSRB believes that these changes will make it more efficient and less
burdensome for regulated entities to complete the form. Also, the
proposed rule change would make clarifying changes to Form A-12, in
furtherance of form modernization.\6\ The MSRB also believes the
proposed rule change would provide additional information to support
the MSRB and the appropriate regulatory agencies in their regulatory
purposes.
---------------------------------------------------------------------------
\6\ The MSRB's Registration Manual would be updated to reflect
the proposed rule change and proposed Form A-12 changes. The MSRB
Registration Manual is available at https://www.msrb.org/sites/default/files/MSRB-Registration-Manual.pdf.
---------------------------------------------------------------------------
Proposed Rule Change and Accompanying Form A-12 Changes
Rule A-12 requires regulated entities to register with the MSRB
prior to engaging in any municipal securities business or municipal
advisory activities and to complete Form A-12 in the designated
electronic format.\7\ The MSRB proposed, and the SEC approved,
amendments to Rule A-12 in 2014 to streamline MSRB registration
requirements into one rule and simplify and clarify the MSRB
registration process and rule requirements for registrants.\8\ As part
of its ongoing retrospective review, the MSRB has identified aspects of
the rule and the accompanying proposed Form A-12 changes that can
benefit from greater clarity, simplification, and modernization, as
discussed below.
---------------------------------------------------------------------------
\7\ The information required by Form A-12 must be submitted
electronically through a web portal located on the MSRB's website.
Registration with the MSRB does not become effective until the
regulated entity is notified by the MSRB that its Form A-12 is
complete, and its initial registration and annual registration fees
have been received and processed.
\8\ See Exchange Act Release No. 71255 (January 8, 2014), 79 FR
2483 (January 14, 2014) (File No. SR-MSRB-2013-09) (Notice of Filing
of a Proposed Rule Change, as Modified by Amendment No. 1),
available at https://www.sec.gov/rules/sro/msrb/2014/34-71255.pdf;
See Exchange Act Release No. 71616 (February 26, 2014), 79 FR 12254
(March 4, 2014) (File No. SR-MSRB-2013-09) (Order Granting Approval
of Proposed Rule Change), available at https://www.sec.gov/rules/sro/msrb/2014/34-71616.pdf.
---------------------------------------------------------------------------
Remove Separate Documentation for the Notice Requirement
Rule A-12(a) requires that prior to registering with the MSRB,
regulated entities must register with, and be approved by the SEC. In
addition, Rule A-12(a) requires, as applicable, that notification be
made to the appropriate regulatory agency or registered securities
association of the intent to engage in municipal securities and/or
municipal advisory activities and then provide written evidence of such
notice to the MSRB.\9\ Because approval of registration with the SEC is
a prerequisite to registration with the MSRB, Rule A-12 does not
require registrants to evidence such notice to the SEC. Currently
dealers provide written evidence to the MSRB of notice having been
provided to FINRA or, as applicable, the FRB, FDIC, or OCC by uploading
a PDF document to Form A-12.\10\
---------------------------------------------------------------------------
\9\ The term ``appropriate regulatory agency,'' with respect to
a municipal securities dealer, means the Comptroller of the Currency
(OCC), Board of Governors of the Federal Reserve System (FRB), or
the Federal Deposit Insurance Corporation (FDIC), and the SEC. With
respect to municipal advisors, ``appropriate regulatory agency''
means the SEC. See 15 U.S.C. 78c(a)(34)(A) and MSRB Rule D-14. The
appropriate registered securities association for broker-dealers is
the Financial Industry Regulatory Authority (FINRA), as defined in
15 U.S.C. 78o-3.
\10\ Pursuant to Rule A-12(l), the MSRB Registration Manual, as
updated or amended from time to time, is comprised of the
specifications for the reporting of information required under Rule
A-12. The Registration Manual notes that a signed written notice
must be uploaded as a PDF document and should include, among other
things, the regulatory agency that was notified and the date
notification was given. See MSRB Registration Manual at 13.
---------------------------------------------------------------------------
The proposed rule change to add Supplementary Material .02, on
notification requirements, would specify that dealers that, after
initial registration, subsequently amend their registration status to
add municipal advisory activities as a line of business must provide
notice to FINRA or, as applicable, the FRB, FDIC, or OCC of the
dealer's intent to conduct the new business activity. This aligns with
the goal that the appropriate regulatory authority primarily
responsible for examining dealers' compliance with MSRB rules is
continuously kept abreast of such line of business changes that
subsequently add a new registration category for a firm post the
dealer's initial registration.\11\
---------------------------------------------------------------------------
\11\ In instances where a FINRA-member firm may have initially
registered with the MSRB only as a municipal advisor (i.e., the firm
is not registered as a dealer firm with the MSRB) and then
subsequently amends its registration status to add the dealer
registration category and municipal securities business,
notification must be provided to FINRA and evidenced to the MSRB via
a Form A-12 amended filing.
---------------------------------------------------------------------------
The proposed rule change also would streamline the process for a
dealer to inform the MSRB that the requisite notification was made.
Rather than creating a separate written statement, the proposed rule
change would require information relevant to the requisite notification
be provided on Form A-12. Specifically, rather than uploading a PDF
document, dealers will be required to input the requisite information
(the name of the person who is the firm's point of contact at the
registered
[[Page 78732]]
securities association or appropriate regulatory agency, the email
address where the notification was sent, the date of such notification
and the intended effective date the firm intends to begin engaging in
municipal securities and/or municipal advisory activities) directly
into proposed Form A-12.
The MSRB believes that removing the requirement to upload a PDF
would simplify completion of Form A-12 without diminishing the
information provided on the form. In addition, removing the PDF upload
requirement and replacing it with the requirement to provide the name
and contact information for a contact person at the registered
securities association or appropriate regulatory agency would provide
the MSRB with more fulsome and relevant information.
Succession Information
Presently, Rule A-12 does not require, and Form A-12 does not
collect, information about successor firms. The proposed rule change
would amend Rule A-12 to require regulated entities to provide, as
applicable, information on successor firms on Form A-12. The SEC's
applications for registration, Form MA, application for municipal
advisor registration; Form BD, application for broker-dealer
registration; and Form MSD, application for registration as a municipal
securities dealer all contain questions about successor registrations
that must be completed as part of the SEC registration process.\12\ As
SEC registration is a prerequisite to registration with the MSRB, the
collection of this information would align the collection of succession
information on Form A-12 with the SEC, which would provide more
comprehensive and complete registration information for the MSRB in
furtherance of regulatory consistency.
---------------------------------------------------------------------------
\12\ See Form MA Item 3: Successions; Form BD Section III; Form
MSD Item 1(a).
---------------------------------------------------------------------------
Proposed Form A-12 changes would capture the required new
succession information by including a question asking regulated
entities to identify whether it is a successor firm and if yes, to
provide the prior SEC and/or MSRB identification number(s) of the
predecessor firm. The MSRB believes that this information will support
the examination and enforcement activities of other regulators by
combining such information with other information on Form A-12 in one
convenient location accessible to such staff.
Appropriate Regulatory Agency
New subparagraph A-12(f) would be added to require a municipal
securities dealer to provide the name of the firm's appropriate
regulatory agency (i.e., OCC, FRB, or FDIC) and proposed Form A-12
changes would capture this information. This new requirement would
ensure that the MSRB is kept informed of the appropriate regulatory
agency that is responsible for examining the registrant's compliance
with MSRB rules and any changes thereto.
Designated Contacts
Pursuant to A-12(f), on designated contacts, registrants must
designate, on Form A-12, a primary regulatory contact, master account
administrator, billing contact, compliance contact, and primary data
quality contact.\13\ Registrants are required to provide the name,
title, address, phone number, and email address of each of these
designated contacts on Form A-12 and are permitted to designate one
individual for any or all the required contacts.
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\13\ Registrants may also provide an optional regulatory
contact, optional data quality contact and/or optional technical
contact.
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The proposed rule change does not alter any obligations of each of
the designated contacts, but promotes consistency across the regulatory
framework, and makes technical amendments to the rule to aid
registrants in the registration process. Specifically, the proposed
rule change would create a similar requirement as that under current
subparagraph A-12(f) for dealers by requiring the primary regulatory
contact \14\ of a municipal advisor firm (and optional regulatory
contact, if the firm opts to include this contact on Form A-12) to be a
duly qualified municipal advisor principal by having taken and passed
the ``Series 54.'' \15\ The proposed rule change is not establishing a
new regulatory or compliance obligation since persons associated with a
municipal advisor who are directly engaged in the management, direction
or supervision of the municipal advisory activities of the municipal
advisor and its associated persons have been required to be qualified
with the Series 54 since November 30, 2021. The proposed rule change is
solely specifying that the designated primary regulatory contact and,
if applicable, the optional regulatory contact, who are persons with
the authority to receive official communications from the Board are
qualified as a municipal advisor principal. Additionally, the proposed
rule change aligns with existing requirements for the primary
regulatory contact and optional regulatory contact, as applicable, of
dealers pursuant to Rule A-12(f).
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\14\ The primary regulatory contact is charged with receiving
official communications from the MSRB.
\15\ As of November 30, 2021, all individuals acting in the
capacity of a municipal advisor principal were required to become
duly qualified with the Series 54.
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The proposed amendments to current subparagraph A-12(f) would
result in the subparagraph being re-lettered as Rule A-12(g) and
current subparagraphs A-12(g)-(l) would be re-lettered to subparagraphs
(h)-(m).
Form A-12 Annual Affirmation
The proposed rule change to current subparagraph A-12(k), on Form
A-12 annual affirmation, would extend and set the dates for the annual
affirmation period. As a result, the current regulatory requirement,
which has the annual affirmation period beginning on January 1st and
ending 17 business days after that date each year, would be amended to
reflect an annual affirmation period that runs from January 1 to
January 31 each year. This proposed rule change would alleviate
confusion about the annual affirmation filing deadline and simplify the
affirmation obligation to provide more regulatory certainty for
registrants. Additionally, under this subparagraph, any regulated
entity that submits its initial Form A-12 during the annual affirmation
period would not be required to affirm Form A-12 during that period for
that calendar year. The proposed rule change would reduce regulated
entities' burdens and provide greater certainty in the filing
requirements by providing that any Form A-12 amendments made by
regulated entities during the month of January would be deemed an
annual affirmation.\16\
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\16\ The annual affirmation is required to be completed by the
designated primary regulatory contact, optional regulatory contact
or compliance contact.
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Other Form A-12 Changes
In addition to the Rule A-12 and accompanying Form A-12 changes
noted above, Form A-12 would include the revisions identified below.
General Information regarding Registrant:
[cir] Name: The field for ``Name'' would be renamed to ``Firm's
Legal Name.''
[cir] Doing-Business-As (DBA) Name: The MSRB would add an optional
text field to Form A-12 for registrants to include a ``doing business
as'' name that may differ from the firm's legal name provided on Form
A-12.
Types of Business Activity: Each registrant is presently
required to identify its types of business activities and multiple
activities may be selected.
[[Page 78733]]
The following reflects the proposed changes to the business activities
section of Form A-12 for the specified registration categories.
[cir] Broker/Dealer--Municipal Fund Securities: ``ABLE Program
Underwriting'' and ``ABLE Program Sales'' would be added to the list of
business activities from which to select.
[cir] Broker/Dealer--Other: If registrants select ``Alternate
Trading System'' from the existing list of business activities, a new
field ``SEC Form ATS has been filed'' would then be displayed.
Registrants to whom such business activity applies would check the box
affirming that the dealer is an SEC Form ATS filer.
2. Statutory Basis
The MSRB believes that the proposed rule change is consistent with
Section 15B(b)(2)) of the Act,\17\ which provides that the Board shall
propose and adopt rules to effect the purposes of the Exchange Act with
respect to transactions in municipal securities effected by brokers,
dealers, and municipal securities dealers and advice provided to or on
behalf of municipal entities or obligated persons by brokers, dealers,
municipal securities dealers, and municipal advisors with respect to
municipal financial products, the issuance of municipal securities, and
solicitations of municipal entities or obligated persons undertaken by
brokers, dealers municipal securities dealers, and municipal advisors.
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\17\ 15 U.S.C. 78o-4(b)(2).
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Section 15B(b)(2)(C) of the Act \18\ 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 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.
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\18\ 15 U.S.C. 78o-4(b)(2)(C).
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The MSRB believes the proposed rule change is consistent with
Section 15B(b)(2)(C) of the Act \19\ because the proposed rule change
would remove impediments to and perfect the mechanism of a free and
open market by streamlining and simplifying the registration process
for new registrants and the annual affirmation process for existing
regulated entities. Similarly, the proposed rule change would remove
impediments by streamlining certain registration-related processes,
such as removing the PDF upload requirement and replacing it with a
requirement to complete requisite fields on Form A-12, which would be a
simpler and less onerous component of the MSRB registration process.
Additionally, the proposed rule change would promote just and equitable
principles of trade because reducing burdens in the registration
process and annual affirmation process would facilitate better and
timelier compliance with Rule A-12 without negatively impacting
investors, issuers, or the public interest. Moreover, the inclusion of
a few additional fields on Form A-12 would promote clarity and ease in
completing Form A-12 during the initial registration process and the
subsequent review, updating and affirming of such information thereby
removing impediments to a free and open municipal securities market by
creating a more efficient process.
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\19\ Id.
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The MSRB also believes that the proposed rule change is consistent
with Section 15B(b)(2)(L)(iv) of the Act,\20\ which requires that rules
adopted by the Board not impose a regulatory burden on small municipal
advisors that is not necessary or appropriate in the public interest
and for the protection of investors, municipal entities, and obligated
persons, provided that there is robust protection of investors against
fraud. The MSRB believes the proposed rule change is consistent with
Section 15B(b)(2)(L)(iv) \21\ because the proposed rule change would
clarify and simplify the registration process, as well as the annual
affirmation process, for all municipal advisors, including small
municipal advisors.
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\20\ 15 U.S.C. 78o-4(b)(2)(L)(iv).
\21\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition
Section 15B(b)(2)(C) of the Act 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.\22\ Section
15B(b)(2)(L)(iv) of the Act,\23\ requires that rules adopted by the
Board not impose a regulatory burden on small municipal advisors that
is not necessary or appropriate in the public interest and for the
protection of investors, municipal entities, and obligated persons,
provided that there is robust protection of investors against fraud.
The Board's policy on the use of economic analysis limits its
application regarding those rules for which the Board seeks immediate
effectiveness.\24\ The MSRB believes that on aggregate, with offsetting
impacts from various components, the proposed rule changes and proposed
Form A-12 changes would reduce the compliance burden for regulated
entities because the proposed rule change would clarify and simplify
the registration process, as well as the annual affirmation process,
for all municipal advisors, including small municipal advisors. Small
municipal advisors typically have fewer associated persons and, as a
result, their resources may be more limited, and the benefits of the
proposed rule change may provide smaller municipal advisors a greater
benefit given their limited resources. Finally, the proposed changes to
Form A-12 are designed to promote the collection of information from
all municipal advisors so that the MSRB and appropriate regulatory
authorities have more fulsome and useful information from the Form A-12
data submitted by registrants. Therefore, the proposed rule change
would not impose any burden on competition not necessary or appropriate
in furtherance of the purposes of the Exchange Act.
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\22\ 15 U.S.C. 78o-4(b)(2)(C).
\23\ 15 U.S.C. 78o-4(b)(2)(L)(iv).
\24\ Policy on the Use of Economic Analysis in MSRB Rulemaking,
available at https://msrb.org/Rules-and-Interpretations/Economic-Analysis-Policy.aspx.
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The proposed rule change would modify Rule A-12 and Form A-12 for
the purposes of reducing regulatory burdens, clarifying relevant
information, and enhancing usability for regulated entities. First, on
reducing regulatory burdens, the proposed rule change would extend the
annual affirmation period allowing regulated entities added time to
comply with the rule's requirements, and the proposed Form A-12 changes
are designed to reduce the complexity of the form format. Additionally,
regulatory burdens are reduced by simplification and clarification of
the regulatory requirement--that being making the annual affirmation
period the whole month of January (i.e., January 1 to January 31 of
each calendar year) rather than seventeen business days after January 1
of each calendar year. The proposed rule change would also streamline
the process of notification to the MSRB that the applicable appropriate
regulatory agency or registered securities association has been
notified of the regulated entities intent to engage in municipal
securities
[[Page 78734]]
and/or municipal advisor activities by removing the prescribed
requirement of uploading a PDF document. In place of a document upload
feature, Rule A-12 would require dealers to complete the requisite
fields on Form A-12 to fulfill the notification requirement.
Next, the proposed changes specific to Form A-12 would, among other
things, require municipal securities dealers to identity the
appropriate regulatory agency that is the firm's designated examining
authority.\25\ Also, proposed form changes would require registrants to
provide the information for any applicable predecessor firm as well as
optionally providing a ``doing business as'' name that differs from a
firm's legal name. All of the aforementioned required information
should be readily available to regulated entities and thus would not
impose much burden on regulated entities. Finally, on enhancing
usability, the proposed changes to Form A-12 would also provide clearer
language to improve form usability for regulated entities.
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\25\ For example, for municipal securities dealers, the
appropriate regulatory agency would be FDIC, OCC, or the FRB.
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Finally, with respect to the proposed rule change prescribing that
the primary regulatory contact and optional regulatory contact, as
applicable, be qualified with the Series 54, the proposed rule change
is not establishing a new regulatory nor compliance obligation for
municipal advisors. Individuals associated with a municipal advisor
firm who are directly engaged in the management, direction or
supervision of the municipal advisory activities of the municipal
advisor and its associated persons have been required to be qualified
with the Series 54 since November 30, 2021. Thus, the proposed rule
change is only specifying that the persons with the authority to
receive official communications from the Board are qualified as a
municipal advisor principal. Additionally, the proposed rule change
aligns with existing requirements for the primary regulatory contact
and optional regulatory contact, as applicable, of dealers pursuant to
Rule A-12(f).
The MSRB believes that the proposed rule change may improve the
operational efficiency of the municipal securities market by
eliminating complexity concerning the annual affirmation period,
modifying outdated requirements in the registration process, and
improving the usability of Form A-12. Additionally, the proposed rule
change would lead to providing more streamlined information to the SEC,
FINRA and other appropriate regulatory agencies. Finally, the MSRB
believes the proposed rule change would not impose any burden on
competition, as the proposed rule change is equally applicable to all
regulated entities. The MSRB does not believe that small, regulated
entities would be disadvantaged by the proposed rule change.
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
Pursuant to Section 19(b)(3)(A) \26\ of the Act and Rule 19b-
4(f)(6) \27\ thereunder, the MSRB has designated the proposed rule
change as one that effects a change that: (i) does not significantly
affect the protection of investors or the public interest; (ii) does
not impose any significant burden on competition; and (iii) by its
terms, does not become operative for 30 days after the date of the
filing, or such shorter time as the Commission may designate. A
proposed rule change filed under Rule 19b-4(f)(6) normally does not
become operative until 30 days after the date of filing.\28\ However,
Rule 19b-4(f)(6)(iii) \29\ permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest.\30\ The MSRB has requested that the
Commission designate the proposed rule change operative on January 1,
2023,\31\ as specified in Rule 19b-4(f)(6)(iii).\32\
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\26\ 15 U.S.C. 78s(b)(3)(A).
\27\ 17 CFR 240.19b-4(f)(6).
\28\ Id.
\29\ 17 CFR 240.19b-4(f)(6)(iii).
\30\ In addition, Rule 19b-4(f)(6)(iii) requires a self-
regulatory organization to give the Commission written notice of its
intent to file a proposed rule change, along with a brief
description and text of such proposed rule change, at least five
business days prior to the date of filing, or such shorter time as
designated by the Commission. The Commission has designated a
shorter time for delivery of such written notice.
\31\ See SR-MSRB-2022-10 available at https://msrb.org/sites/default/files/2022-12/SR-MSRB-2022-10.pdf.
\32\ 17 CFR 240.19b-4(f)(6)(iii).
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The MSRB notes that the proposed rule change would not
significantly alter the substantive or underlying regulatory
obligations of regulated entities, and would not require regulated
entities to make material changes to current procedures. The proposed
amendments are designed to reduce compliance burdens for regulated
entities by modernizing Rule A-12 and enhancing the usability of Form
A-12. The MSRB further believes that an operative date of January 1,
2023 would allow regulated entities to benefit from the enhancements to
Form A-12 and would promote regulatory consistency; as Form A-12 data
collected during the 2023 affirmation period will be consistent whether
a registrant completes the annual affirmation on January 1, 2023, or on
or after January 12, 2023 (i.e., 30 days from the date of the filing).
In addition, the MSRB notes that a January 1st effective date would
alleviate any confusion about when the annual affirmation period ends.
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest. An
operative date of January 1, 2023 will alleviate operational challenges
and confusion for regulated entities by allowing the proposed rule
change to become operative on the first day of the calendar year.
Accordingly, the Commission hereby waives the 30-day operative delay
specified in Rule 19b-4(f)(6)(iii) and designates the proposed rule
change to be operative on January 1, 2023.\33\
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\33\ For the purpose of waiving the 30-day operative delay for
this proposal, 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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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.
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-2022-10 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange
[[Page 78735]]
Commission, 100 F Street NE, Washington, DC 20549.
All submissions should refer to File Number SR-MSRB-2022-10. 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-2022-10 and should be submitted on
or before January 12, 2023.
For the Commission, pursuant to delegated authority.\34\
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\34\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27783 Filed 12-21-22; 8:45 am]
BILLING CODE 8011-01-P
