80 FR 26310 - Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Consisting of the Specifications for the Selection of Examination Questions and Content Outline for the Municipal Advisor Representative Qualification Examination
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 88 (May 7, 2015)
Federal Register Volume 80, Issue 88 (May 7, 2015)
| Page Range | 26310-26313 | |
| FR Document | 2015-10946 |
[Federal Register Volume 80, Number 88 (Thursday, May 7, 2015)] [Notices] [Pages 26310-26313] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-10946] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74858; File No. SR-MSRB-2015-04] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Consisting of the Specifications for the Selection of Examination Questions and Content Outline for the Municipal Advisor Representative Qualification Examination May 1, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on April 22, 2015, the Municipal Securities Rulemaking Board (the ``MSRB'' or ``Board'') filed with the Securities and Exchange Commission (the ``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 the specifications for the selection of examination questions (``selection specifications'') and content outline for the Municipal Advisor Representative Qualification Examination (``Series 50 examination'') (the ``proposed rule change'').\3\ The MSRB is not proposing in this filing any textual changes to its rules. --------------------------------------------------------------------------- \3\ The MSRB is also proposing the question bank for the Series 50, but based upon instructions from the Commission staff, the MSRB is submitting SR-MSRB-2015-04 for immediate effectiveness pursuant to Section 19(b)(3)(A)(i) of the Act and Rule 19b-4(f)(6) thereunder, and is not filing the question bank for Commission review. See letter to Diane G. Klinke, General Counsel, MSRB, from Belinda Blaine, Associate Director, Division of Market Regulation, SEC, dated July 24, 2000, attached as Exhibit 3b. The question bank is available for Commission review. The selection specifications for the Series 50 examination, Exhibit 3c, have been omitted and filed separately with the Commission for confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act. --------------------------------------------------------------------------- The text of the proposed rule change is available on the MSRB's Web site at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2015-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. [[Page 26311]] A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Section 15B of the Act requires the MSRB to establish professional standards for municipal advisors.\4\ The Act further requires associated persons of municipal advisors to pass such examinations as the Board may establish to demonstrate that such individuals meet the standards as the Board finds necessary or appropriate in the public interest or for the protection of investors and municipal entities or obligated persons.\5\ A professional qualification examination is intended to determine whether an individual meets the MSRB's basic qualification standards for a particular registration category. The examination measures a candidate's knowledge of the business activities, as well as the regulatory requirements, including MSRB rules, SEC rules, rule interpretations and other federal law, applicable to a particular registration category. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78o-4(b)(2)(L)(iii). \5\ See Section 15B(b)(2)(A)(iii) of the Act, 15 U.S.C. 78o- 4(b)(2)(A)(iii). --------------------------------------------------------------------------- On February 26, 2015, the Commission approved amendments to MSRB Rule G-3, which established the qualification examination requirements for municipal advisor representative and municipal advisor principal candidates.\6\ Individuals who engage in municipal advisory activities must qualify as municipal advisor representatives and individuals who engage in the management, direction or supervision of the municipal advisory activities of municipal advisors and their associated persons must qualify as municipal advisor principals. To qualify as either a municipal advisor representative or municipal advisor principal, an individual must pass the Series 50 examination. The examination requirement in MSRB Rule G-3(d) is intended, among other things, to increase municipal advisor representative and municipal advisor principal candidates' awareness and knowledge that they are operating in a regulated environment designed to protect municipal entities, obligated persons and the integrity of the municipal market. --------------------------------------------------------------------------- \6\ See Exchange Act Release No. 74384 (Feb. 26, 2015), 80 FR 11706 (Mar. 4, 2015), File No. SR-MSRB-2014-08. --------------------------------------------------------------------------- The MSRB developed the Series 50 examination content outline in accordance with The Standards for Educational and Psychological Testing (``APA Standard''),\7\ including the engagement of a psychometrician and a committee of industry subject matter experts. The Series 50 examination content outline has been developed to provide reasonable assurance that municipal advisor representative candidates understand their professional responsibilities, including key regulatory requirements and duties and obligations. The examination will test applicants on their general knowledge of the municipal advisory industry and the associated municipal advisor regulatory framework.\8\ To develop the examination to fulfill these purposes, the MSRB in July of 2014 completed a job analysis of municipal advisors based on a web- based survey that was sent to all MSRB-registered municipal advisors.\9\ The MSRB received 565 responses to the survey from individuals who engage in a variety of municipal advisory activities for different-sized firms in different areas of the country. The survey results provided the MSRB with certain data on municipal advisors, such as the duties, tasks, and responsibilities performed by individuals who engage in various municipal advisory activities and the level of knowledge an individual should possess to be sufficiently qualified to perform municipal advisory activities. The job analysis, coupled with focus panels, provided the empirical basis for the representation of topic areas on the Series 50 examination. --------------------------------------------------------------------------- \7\ See American Educational Research Association, American Psychological Association, & National Council on Measurement in Education, The Standards for Educational and Psychological Testing (2d ed. 2014). \8\ See Series 50 examination content outline attached hereto as Exhibit 3a. \9\ A job analysis is an assessment of the essential skills and functions that are required to complete a particular job. --------------------------------------------------------------------------- The Series 50 examination will consist of 100 multiple-choice questions. Candidates are allowed 180 minutes to complete the examination.\10\ Consistent with other financial regulatory qualification examinations, candidates may receive (at the option of their firm) an informational breakdown of their performance on each section of the examination and their pass/fail status at the completion of the testing session. As provided for in MSRB Rule G-3(g) and consistent with other MSRB examinations, candidates that fail to pass the Series 50 examination are permitted to take the examination again after a period of 30 days has elapsed from the date of the prior examination. Any person, however, who fails to pass the Series 50 examination three or more times in succession is prohibited from taking the Series 50 examination again until six months has elapsed from the date the candidate last failed the examination. --------------------------------------------------------------------------- \10\ Prior to beginning the examination, candidates will receive a tutorial on how to complete the computerized examination. Candidates will be given 30 minutes to complete the tutorial in addition to the 180 minutes allowed to complete the examination. --------------------------------------------------------------------------- The Series 50 examination content outline has been developed to assist municipal advisor representative candidates in preparing for the Series 50 examination and will be available on the MSRB's Web site. The Series 50 examination content outline describes the following five topical sections comprising the examination: (1) Understanding SEC and MSRB Rules Regarding Municipal Advisors (12 questions); (2) Understanding Municipal Finance (35 questions); (3) Performing Issuer's Credit Analysis and Due Diligence (12 questions); (4) Structuring, Pricing and Executing Municipal Debt Products (31 questions); and (5) Understanding Requirements Related to the Issuance of Municipal Debt (10 questions). The reference materials section of the Series 50 examination content outline is intended to provide candidates with a list of resources, which when used in conjunction with the Series 50 examination content outline, can assist candidates in preparing for the Series 50 examination. The reference materials were recommended by municipal advisors as having been helpful resources in carrying out the job functions of a municipal advisor. The reference materials are not intended to be all-inclusive, nor are the reference materials intended to specifically represent content that may be covered on the examination. Prior to announcing the effective date of the Series 50 examination, the MSRB will conduct a pilot for the Series 50 examination. The Series 50 pilot examination will assist the MSRB in validating the bank of examination questions and establishing the passing score. The Series 50 pilot examination will consist of 120-125 questions. Candidates will have 240 minutes to complete the Series 50 pilot examination.\11\ The Series 50 pilot examination will be available for a limited time this fall and open to all municipal advisor representative and municipal advisor principal candidates. Those candidates who take and pass the [[Page 26312]] Series 50 pilot examination will have the municipal advisor representative qualification and will not be required to take the permanent Series 50 examination.\12\ The MSRB will notify candidates who take the Series 50 pilot examination of their results approximately three months after taking the examination. The MSRB will announce the dates and the registration process for the Series 50 pilot examination in a notice published on the MSRB's Web site no later than three months from the date of this filing and with at least thirty days advance notice.\13\ The MSRB will announce an effective date for the permanent Series 50 examination in a notice published on the MSRB's Web site no later than one year from the date of this filing and with at least 60 days advance notice.\14\ --------------------------------------------------------------------------- \11\ Prior to beginning the pilot examination, candidates will receive a tutorial on how to complete the computerized examination. Candidates will be given 30 minutes to complete the tutorial in addition to the 240 minutes allowed to complete the examination. \12\ An individual who fails to pass the Series 50 pilot examination will, consistent with MSRB Rule G-3(g), still be allowed three attempts to pass the permanent Series 50 examination before having to wait a period of 6 months to take the permanent Series 50 examination again. \13\ For the most up-to-date information on the Series 50 pilot examination visit the Municipal Advisor Professional Qualifications page on the MSRB's Web site. \14\ To provide for an orderly transition to the new examination requirement for municipal advisor representatives and municipal advisor principals, the MSRB will allow municipal advisor professionals one year from the announced effective date of the Series 50 examination to pass the examination. This one-year grace period is intended to provide municipal advisor representatives and municipal advisor principals with sufficient time to study for and take the examination without causing undue business disruption. --------------------------------------------------------------------------- The selection specifications for the Series 50 examination, which the MSRB has submitted under separate cover with a request for confidential treatment to the Commission's Secretary pursuant to Rule 24b-2 under the Act,\15\ describe additional confidential information regarding the Series 50 examination. --------------------------------------------------------------------------- \15\ 17 CFR 240.24b-2. --------------------------------------------------------------------------- 2. Statutory Basis Section 15B(b)(2)(A) of the Act authorizes the MSRB to prescribe standards of training, experience, competence, and such other qualifications for associated persons of municipal advisors as the Board finds necessary or appropriate in the public interest or for the protection of investors and municipal entities or obligated persons.\16\ Section 15B(b)(2)(A)(i)-(iii) of the Act also provides that the Board may appropriately classify municipal advisors and persons associated with municipal advisors and require persons in any such class to pass tests prescribed by the Board.\17\ --------------------------------------------------------------------------- \16\ 15 U.S.C. 78o-4(b)(2)(A). \17\ 15 U.S.C. 78o-4(b)(2)(A)(i)-(iii). --------------------------------------------------------------------------- The MSRB believes that the Series 50 examination content outline for the Series 50 examination is consistent with the provisions of Section 15B(b)(2)(A) of the Act in that the Series 50 examination content outline is designed to ensure that individuals are sufficiently qualified to perform municipal advisory activities. B. Self-Regulatory Organization's Statement on Burden on Competition Section 15B(b)(2)(C) of the Act \18\ requires that MSRB rules not be designed to impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. In addition, Section 15B(b)(2)(L)(iv) of the Act provides that MSRB rules may ``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.'' \19\ --------------------------------------------------------------------------- \18\ 15 U.S.C. 78o-4(b)(2)(C). \19\ 15 U.S.C. 78o-4(b)(2)(L)(iv). --------------------------------------------------------------------------- In considering these standards, the MSRB was guided by the Board's Policy on the Use of Economic Analysis. The MSRB does not believe that the Series 50 examination content outline will impose any burdens that are not necessary or appropriate in furtherance of the purposes of the Act. Need for Rule The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (``Dodd-Frank Act'') amended Section 15B of the Exchange Act to provide for the regulation by the SEC and the MSRB of municipal advisors and to grant the MSRB certain authority to protect municipal entities and obligated persons.\20\ The Dodd-Frank Act's legislative history indicates Congress was concerned that ``[d]uring the [financial] crisis, a number of municipalities suffered losses from complex derivatives products that were marketed by unregulated financial intermediaries.'' \21\ --------------------------------------------------------------------------- \20\ Public Law 111-203, 124 Stat. 1376 (2010). \21\ S. Rep. No. 111-176, at 38 (2010). --------------------------------------------------------------------------- Baseline The economic baseline for the Series 50 examination content outline includes the Dodd-Frank Act which established the federal regulatory framework for municipal advisors, required the MSRB to establish standards of training, experience, competence and other qualifications for municipal advisors and their associated persons, and required associated persons of municipal advisors to pass examinations to demonstrate that they meet the standards the Board finds necessary or appropriate in the public interest or for the protection of investors, and municipal entities or obligated persons.\22\ The baseline also includes MSRB Rule G-3(d), which established the municipal advisor representative qualification examination requirement for municipal advisor representative candidates.\23\ --------------------------------------------------------------------------- \22\ See Section 15B(b)(2)(A) of the Act, 15 U.S.C. 78o- 4(b)(2)(A). \23\ See supra note 6. --------------------------------------------------------------------------- Alternatives The MSRB developed the Series 50 examination content outline in accordance with The Standards for Educational and Psychological Testing (``APA Standard''),\24\ including the engagement of a psychometrician and a committee of industry subject matter experts, as is consistent with the development of other financial industry qualification examinations. This process resulted in the identification and consideration of a range of alternatives. Decisions about which alternatives to select for the final Series 50 examination content outline were made consistent with the APA Standard. --------------------------------------------------------------------------- \24\ See supra note 7. --------------------------------------------------------------------------- Economic Impact Relative to the economic baseline, which includes the requirement that municipal advisors demonstrate by passing an examination that they meet standards deemed necessary or appropriate in the public interest or for the protection of investors, municipal entities and obligated persons, the MSRB believes that the economic impact of the Series 50 examination content outline is de minimis and no greater than what is necessary or appropriate in furtherance of the purposes of the Act.\25\ --------------------------------------------------------------------------- \25\ As noted above, many of the costs and burdens, including impacts on competition, associated with the Series 50 examination content outline are accounted for in the baseline which is made up, in part, by the Dodd-Frank Act. In 2013, the SEC concluded that the municipal advisory services market was competitive and not highly concentrated under a similar baseline. See Registration of Municipal Advisors, Exchange Act Release No. 70462 (Sept. 20, 2013), 78 FR 67608 at n.1723 (Nov. 12, 2013). --------------------------------------------------------------------------- While any examination intended to identify those individuals who meet a particular standard of competence may represent a barrier to entry, the MSRB believes that the standard that successful completion of the examination will demonstrate is necessary to protect investors and [[Page 26313]] municipal entities or obligated persons and will help ensure that those offering municipal advisory service do so on a level playing field. As such, the MSRB believes that the Series 50 examination content outline poses no burden on competition that is not necessary or appropriate in furtherance of the Act and may enhance the competiveness of the market. Based on the well-established and nationally-accepted process used by the MSRB to develop the Series 50 examination content outline, the MSRB has no reason to believe that the Series 50 examination content outline will pose any greater burden on individuals associated with smaller firms than those associated with larger firms or that the burden could be materially reduced while still achieving the purposes of the Act. While it is possible that small municipal advisors may have access to fewer resources to prepare for this examination, the MSRB does not believe this will affect the competitiveness of the market. 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. --------------------------------------------------------------------------- \26\ 15 U.S.C. 78s(b)(3)(A). \27\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- 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 upon filing,\31\ as specified in Rule 19b-4(f)(6)(iii),\32\ which would make the proposed rule change operative on April 22, 2015. The MSRB has stated that an earlier operative date would provide municipal advisor professionals with an earlier opportunity to begin preparation for the qualification requirement.\33\ --------------------------------------------------------------------------- \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 MSRB satisfied this requirement on April 14, 2015. \31\ See SR-MSRB-2015-04. \32\ 17 CFR 240.19b-4(f)(6)(iii). \33\ See supra note 31. --------------------------------------------------------------------------- The Commission hereby grants the MSRB's request and believes that designating the proposed rule change operative upon filing is consistent with the protection of investors and the public interest.\34\ According to the MSRB, the Series 50 examination content outline is designed to ensure that individuals are sufficiently qualified to perform municipal advisory activities.\35\ The Commission believes that designating the proposed rule change operative upon filing is consistent with the protection of investors and the public interest because it will allow individuals to prepare for the Series 50 examination without delay. In addition, the proposed rule change is not proposing any textual changes to MSRB rules. Therefore, the Commission hereby designates the proposed rule change operative upon filing. --------------------------------------------------------------------------- \34\ For the purposes only of accelerating the operative date of this proposal, the Commission has considered the proposed rule change's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \35\ See supra note 31. --------------------------------------------------------------------------- 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-MSRB-2015-04 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-2015-04. 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 Web site (http://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 Web site 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; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-MSRB-2015-04 and should be submitted on or before May 28, 2015. For the Commission, pursuant to delegated authority.\36\ --------------------------------------------------------------------------- \36\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-10946 Filed 5-6-15; 8:45 am] BILLING CODE 8011-01-P
![26310 Federal Register / Vol. 80, No. 88 / Thursday, May 7, 2015 / Notices
expects firms to make decisions on how Commission process and review your 2015, the Municipal Securities
much and what types of data to comments more efficiently, please use Rulemaking Board (the ‘‘MSRB’’ or
consume on the basis of the total cost of only one method. The Commission will ‘‘Board’’) filed with the Securities and
interacting with MIAX or other post all comments on the Commission’s Exchange Commission (the ‘‘SEC’’ or
exchanges. Of course, the explicit data Internet Web site (http://www.sec.gov/ ‘‘Commission’’) the proposed rule
fees are only one factor in a total rules/sro.shtml). Copies of the change as described in Items I and II
platform analysis. Some competitors submission, all subsequent below, which Items have been prepared
have lower transactions fees and higher amendments, all written statements by the MSRB. The Commission is
data fees, and others are vice versa. The with respect to the proposed rule publishing this notice to solicit
market for this proprietary information change that are filed with the
comments on the proposed rule change
is highly competitive and continually Commission, and all written
from interested persons.
evolves as products develop and communications relating to the
change. proposed rule change between the I. Self-Regulatory Organization’s
Commission and any person, other than Statement of the Terms of Substance of
C. Self-Regulatory Organization’s those that may be withheld from the
Statement on Comments on the the Proposed Rule Change
public in accordance with the
Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be The MSRB filed with the Commission
Members, Participants, or Others available for Web site viewing and the specifications for the selection of
Written comments were neither printing in the Commission’s Public examination questions (‘‘selection
solicited nor received. Reference Room, 100 F Street NE., specifications’’) and content outline for
Washington, DC 20549 on official the Municipal Advisor Representative
III. Date of Effectiveness of the
business days between the hours of Qualification Examination (‘‘Series 50
Proposed Rule Change and Timing for 10:00 a.m. and 3:00 p.m. Copies of such
Commission Action examination’’) (the ‘‘proposed rule
filing also will be available for change’’).3 The MSRB is not proposing
The foregoing rule change has become inspection and copying at the principal in this filing any textual changes to its
effective pursuant to section offices of the Exchange. All comments rules.
19(b)(3)(A)(ii) of the Act.14 At any time received will be posted without change;
within 60 days of the filing of the the Commission does not edit personal The text of the proposed rule change
proposed rule change, the Commission identifying information from is available on the MSRB’s Web site at
summarily may temporarily suspend submissions. You should submit only www.msrb.org/Rules-and-
such rule change if it appears to the information that you wish to make Interpretations/SEC-Filings/2015-
Commission that such action is available publicly. All submissions Filings.aspx, at the MSRB’s principal
necessary or appropriate in the public should refer to File Number SR–MIAX– office, and at the Commission’s Public
interest, for the protection of investors, 2015–32, and should be submitted on or Reference Room.
or otherwise in furtherance of the before May 28, 2015.
purposes of the Act. If the Commission II. Self-Regulatory Organization’s
For the Commission, by the Division of Statement of the Purpose of, and
takes such action, the Commission shall Trading and Markets, pursuant to delegated
institute proceedings to determine authority.15 Statutory Basis for, the Proposed Rule
whether the proposed rule should be Brent J. Fields, Change
approved or disapproved. Secretary. In its filing with the Commission, the
IV. Solicitation of Comments [FR Doc. 2015–10957 Filed 5–6–15; 8:45 am] MSRB included statements concerning
Interested persons are invited to BILLING CODE 8011–01–P the purpose of and basis for the
submit written data, views, and proposed rule change and discussed any
arguments concerning the foregoing, comments it received on the proposed
SECURITIES AND EXCHANGE
including whether the proposed rule rule change. The text of these statements
COMMISSION
change is consistent with the Act. may be examined at the places specified
Comments may be submitted by any of [Release No. 34–74858; File No. SR–MSRB– in Item IV below. The MSRB has
the following methods: 2015–04] prepared summaries, set forth in
Sections A, B, and C below, of the most
Electronic Comments Self-Regulatory Organizations;
Municipal Securities Rulemaking significant aspects of such statements.
• Use the Commission’s Internet
comment form (http://www.sec.gov/ Board; Notice of Filing and Immediate
rules/sro.shtml); or Effectiveness of a Proposed Rule
• Send an email to rule-comments@ Change Consisting of the
sec.gov. Please include File Number SR– Specifications for the Selection of 3 The MSRB is also proposing the question bank
MIAX–2015–32 on the subject line. Examination Questions and Content for the Series 50, but based upon instructions from
Outline for the Municipal Advisor the Commission staff, the MSRB is submitting SR–
Paper Comments Representative Qualification MSRB–2015–04 for immediate effectiveness
pursuant to Section 19(b)(3)(A)(i) of the Act and
• Send paper comments in triplicate Examination
Rule 19b–4(f)(6) thereunder, and is not filing the
to Secretary, Securities and Exchange May 1, 2015. question bank for Commission review. See letter to
Commission, 100 F Street NE.,
mstockstill on DSK4VPTVN1PROD with NOTICES
Pursuant to Section 19(b)(1) of the Diane G. Klinke, General Counsel, MSRB, from
Washington, DC 20549–1090. Securities Exchange Act of 1934 (the Belinda Blaine, Associate Director, Division of
All submissions should refer to File Market Regulation, SEC, dated July 24, 2000,
‘‘Act’’) 1 and Rule 19b–4 thereunder,2 attached as Exhibit 3b. The question bank is
Number SR–MIAX–2015–32. This file notice is hereby given that on April 22, available for Commission review. The selection
number should be included on the specifications for the Series 50 examination, Exhibit
subject line if email is used. To help the 15 17 CFR 200.30–3(a)(12). 3c, have been omitted and filed separately with the
1 15 U.S.C. 78s(b)(1). Commission for confidential treatment pursuant to
14 15 U.S.C. 78s(b)(3)(A)(ii). 2 17 CFR 240.19b–4. Rule 24b–2 of the Securities Exchange Act.
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![26312 Federal Register / Vol. 80, No. 88 / Thursday, May 7, 2015 / Notices
Series 50 pilot examination will have The MSRB believes that the Series 50 required associated persons of
the municipal advisor representative examination content outline for the municipal advisors to pass
qualification and will not be required to Series 50 examination is consistent with examinations to demonstrate that they
take the permanent Series 50 the provisions of Section 15B(b)(2)(A) of meet the standards the Board finds
examination.12 The MSRB will notify the Act in that the Series 50 necessary or appropriate in the public
candidates who take the Series 50 pilot examination content outline is designed interest or for the protection of
examination of their results to ensure that individuals are investors, and municipal entities or
approximately three months after taking sufficiently qualified to perform obligated persons.22 The baseline also
the examination. The MSRB will municipal advisory activities. includes MSRB Rule G–3(d), which
announce the dates and the registration established the municipal advisor
B. Self-Regulatory Organization’s
process for the Series 50 pilot representative qualification examination
Statement on Burden on Competition
examination in a notice published on requirement for municipal advisor
the MSRB’s Web site no later than three Section 15B(b)(2)(C) of the Act 18 representative candidates.23
months from the date of this filing and requires that MSRB rules not be
designed to impose any burden on Alternatives
with at least thirty days advance
notice.13 The MSRB will announce an competition not necessary or The MSRB developed the Series 50
effective date for the permanent Series appropriate in furtherance of the examination content outline in
50 examination in a notice published on purposes of the Act. In addition, Section accordance with The Standards for
the MSRB’s Web site no later than one 15B(b)(2)(L)(iv) of the Act provides that Educational and Psychological Testing
year from the date of this filing and with MSRB rules may ‘‘not impose a (‘‘APA Standard’’),24 including the
at least 60 days advance notice.14 regulatory burden on small municipal engagement of a psychometrician and a
The selection specifications for the advisors that is not necessary or committee of industry subject matter
Series 50 examination, which the MSRB appropriate in the public interest and experts, as is consistent with the
has submitted under separate cover with for the protection of investors, development of other financial industry
a request for confidential treatment to municipal entities, and obligated qualification examinations. This process
the Commission’s Secretary pursuant to persons, provided that there is robust resulted in the identification and
Rule 24b-2 under the Act,15 describe protection of investors against fraud.’’ 19 consideration of a range of alternatives.
additional confidential information In considering these standards, the Decisions about which alternatives to
regarding the Series 50 examination. MSRB was guided by the Board’s Policy select for the final Series 50
on the Use of Economic Analysis. examination content outline were made
2. Statutory Basis The MSRB does not believe that the consistent with the APA Standard.
Section 15B(b)(2)(A) of the Act Series 50 examination content outline
will impose any burdens that are not Economic Impact
authorizes the MSRB to prescribe
standards of training, experience, necessary or appropriate in furtherance Relative to the economic baseline,
competence, and such other of the purposes of the Act. which includes the requirement that
qualifications for associated persons of municipal advisors demonstrate by
Need for Rule
municipal advisors as the Board finds passing an examination that they meet
The Dodd-Frank Wall Street Reform standards deemed necessary or
necessary or appropriate in the public
and Consumer Protection Act of 2010 appropriate in the public interest or for
interest or for the protection of investors
(‘‘Dodd-Frank Act’’) amended Section the protection of investors, municipal
and municipal entities or obligated
15B of the Exchange Act to provide for entities and obligated persons, the
persons.16 Section 15B(b)(2)(A)(i)-(iii) of
the regulation by the SEC and the MSRB MSRB believes that the economic
the Act also provides that the Board
of municipal advisors and to grant the impact of the Series 50 examination
may appropriately classify municipal
MSRB certain authority to protect content outline is de minimis and no
advisors and persons associated with
municipal entities and obligated greater than what is necessary or
municipal advisors and require persons
persons.20 The Dodd-Frank Act’s appropriate in furtherance of the
in any such class to pass tests
legislative history indicates Congress purposes of the Act.25
prescribed by the Board.17
was concerned that ‘‘[d]uring the While any examination intended to
12 An individual who fails to pass the Series 50
[financial] crisis, a number of identify those individuals who meet a
pilot examination will, consistent with MSRB Rule
municipalities suffered losses from particular standard of competence may
G–3(g), still be allowed three attempts to pass the complex derivatives products that were represent a barrier to entry, the MSRB
permanent Series 50 examination before having to marketed by unregulated financial believes that the standard that
wait a period of 6 months to take the permanent intermediaries.’’ 21 successful completion of the
Series 50 examination again.
13 For the most up-to-date information on the Baseline examination will demonstrate is
Series 50 pilot examination visit the Municipal necessary to protect investors and
Advisor Professional Qualifications page on the The economic baseline for the Series
MSRB’s Web site. 50 examination content outline includes 22 See Section 15B(b)(2)(A) of the Act, 15 U.S.C.
14 To provide for an orderly transition to the new
the Dodd-Frank Act which established 78o–4(b)(2)(A).
examination requirement for municipal advisor the federal regulatory framework for 23 See supra note 6.
representatives and municipal advisor principals, 24 See supra note 7.
the MSRB will allow municipal advisor municipal advisors, required the MSRB
25 As noted above, many of the costs and burdens,
professionals one year from the announced effective to establish standards of training, including impacts on competition, associated with
mstockstill on DSK4VPTVN1PROD with NOTICES
date of the Series 50 examination to pass the experience, competence and other the Series 50 examination content outline are
examination. This one-year grace period is intended qualifications for municipal advisors accounted for in the baseline which is made up, in
to provide municipal advisor representatives and part, by the Dodd-Frank Act. In 2013, the SEC
municipal advisor principals with sufficient time to and their associated persons, and
concluded that the municipal advisory services
study for and take the examination without causing market was competitive and not highly
undue business disruption. 18 15 U.S.C. 78o–4(b)(2)(C). concentrated under a similar baseline. See
15 17 CFR 240.24b–2. 19 15 U.S.C. 78o–4(b)(2)(L)(iv). Registration of Municipal Advisors, Exchange Act
16 15 U.S.C. 78o–4(b)(2)(A). 20 Public Law 111–203, 124 Stat. 1376 (2010).
Release No. 70462 (Sept. 20, 2013), 78 FR 67608 at
17 15 U.S.C. 78o–4(b)(2)(A)(i)–(iii). 21 S. Rep. No. 111–176, at 38 (2010). n.1723 (Nov. 12, 2013).
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![Federal Register / Vol. 80, No. 88 / Thursday, May 7, 2015 / Notices 26313
municipal entities or obligated persons the Commission designate the proposed • Send an email to rule-comments@
and will help ensure that those offering rule change operative upon filing,31 as sec.gov. Please include File Number SR–
municipal advisory service do so on a specified in Rule 19b–4(f)(6)(iii),32 MSRB–2015–04 on the subject line.
level playing field. As such, the MSRB which would make the proposed rule
believes that the Series 50 examination change operative on April 22, 2015. The Paper Comments
content outline poses no burden on MSRB has stated that an earlier • Send paper comments in triplicate
competition that is not necessary or operative date would provide municipal to Secretary, Securities and Exchange
appropriate in furtherance of the Act advisor professionals with an earlier
Commission, 100 F Street NE.,
and may enhance the competiveness of opportunity to begin preparation for the
Washington, DC 20549.
the market. qualification requirement.33
Based on the well-established and The Commission hereby grants the All submissions should refer to File
nationally-accepted process used by the MSRB’s request and believes that Number SR–MSRB–2015–04. This file
MSRB to develop the Series 50 designating the proposed rule change number should be included on the
examination content outline, the MSRB operative upon filing is consistent with subject line if email is used. To help the
has no reason to believe that the Series the protection of investors and the Commission process and review your
50 examination content outline will public interest.34 According to the comments more efficiently, please use
pose any greater burden on individuals MSRB, the Series 50 examination only one method. The Commission will
associated with smaller firms than those content outline is designed to ensure post all comments on the Commission’s
associated with larger firms or that the that individuals are sufficiently Internet Web site (http://www.sec.gov/
burden could be materially reduced qualified to perform municipal advisory rules/sro.shtml). Copies of the
while still achieving the purposes of the activities.35 The Commission believes submission, all subsequent
Act. While it is possible that small that designating the proposed rule amendments, all written statements
municipal advisors may have access to change operative upon filing is
fewer resources to prepare for this with respect to the proposed rule
consistent with the protection of change that are filed with the
examination, the MSRB does not believe investors and the public interest
this will affect the competitiveness of Commission, and all written
because it will allow individuals to communications relating to the
the market. prepare for the Series 50 examination proposed rule change between the
C. Self-Regulatory Organization’s without delay. In addition, the proposed
Commission and any person, other than
Statement on Comments on the rule change is not proposing any textual
those that may be withheld from the
Proposed Rule Change Received From changes to MSRB rules. Therefore, the
public in accordance with the
Members, Participants, or Others Commission hereby designates the
proposed rule change operative upon provisions of 5 U.S.C. 552, will be
Written comments were neither available for Web site viewing and
filing.
solicited nor received on the proposed printing in the Commission’s Public
rule change. At any time within 60 days of the
Reference Room, 100 F Street NE.,
filing of the proposed rule change, the
III. Date of Effectiveness of the Washington, DC 20549 on official
Commission summarily may
Proposed Rule Change and Timing for business days between the hours of
temporarily suspend such rule change if
Commission Action it appears to the Commission that such 10:00 a.m. and 3:00 p.m. Copies of the
action is necessary or appropriate in the filing also will be available for
Pursuant to Section 19(b)(3)(A) 26 of
the Act and Rule 19b–4(f)(6) 27 public interest, for the protection of inspection and copying at the principal
thereunder, the MSRB has designated investors, or otherwise in furtherance of office of the MSRB. All comments
the proposed rule change as one that the purposes of the Act. received will be posted without change;
effects a change that: (i) Does not the Commission does not edit personal
IV. Solicitation of Comments identifying information from
significantly affect the protection of
investors or the public interest; (ii) does Interested persons are invited to submissions. You should submit only
not impose any significant burden on submit written data, views, and information that you wish to make
competition; and (iii) by its terms, does arguments concerning the foregoing, available publicly. All submissions
not become operative for 30 days after including whether the proposed rule should refer to File Number SR–MSRB–
the date of the filing, or such shorter change is consistent with the Act. 2015–04 and should be submitted on or
time as the Commission may designate. Comments may be submitted by any of before May 28, 2015.
A proposed rule change filed under the following methods: For the Commission, pursuant to delegated
Rule 19b–4(f)(6) normally does not authority.36
become operative until 30 days after the Electronic Comments
Brent J. Fields,
date of filing.28 However, Rule • Use the Commission’s Internet
19b–4(f)(6)(iii) 29 permits the Secretary.
comment form (http://www.sec.gov/
Commission to designate a shorter time rules/sro.shtml); or [FR Doc. 2015–10946 Filed 5–6–15; 8:45 am]
if such action is consistent with the BILLING CODE 8011–01–P
protection of investors and the public days prior to the date of filing, or such shorter time
interest.30 The MSRB has requested that as designated by the Commission. The MSRB
satisfied this requirement on April 14, 2015.
mstockstill on DSK4VPTVN1PROD with NOTICES
26 15 U.S.C. 78s(b)(3)(A). 31 See SR–MSRB–2015–04.
27 17 CFR 240.19b–4(f)(6). 32 17 CFR 240.19b–4(f)(6)(iii).
28 Id. 33 See supra note 31.
29 17CFR 240.19b–4(f)(6)(iii). 34 For the purposes only of accelerating the
30 Inaddition, Rule 19b–4(f)(6)(iii) requires a self- operative date of this proposal, the Commission has
regulatory organization to give the Commission considered the proposed rule change’s impact on
written notice of its intent to file a proposed rule efficiency, competition, and capital formation. See
change, along with a brief description and text of 15 U.S.C. 78c(f).
such proposed rule change, at least five business 35 See supra note 31. 36 17 CFR 200.30–3(a)(12).
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Document Created: 2015-12-16 07:50:04
Document Modified: 2015-12-16 07:50:04
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 80 FR 26310 |
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