82 FR 7898 - Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Extend the MSRB's Customer Complaint and Related Recordkeeping Rules to Municipal Advisors and To Modernize Those Rules
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 13 (January 23, 2017)
Federal Register Volume 82, Issue 13 (January 23, 2017)
| Page Range | 7898-7904 | |
| FR Document | 2017-01300 |
[Federal Register Volume 82, Number 13 (Monday, January 23, 2017)] [Notices] [Pages 7898-7904] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-01300] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79801; File No. SR-MSRB-2016-15] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Extend the MSRB's Customer Complaint and Related Recordkeeping Rules to Municipal Advisors and To Modernize Those Rules January 13, 2017. I. Introduction On November 1, 2016, the Municipal Securities Rulemaking Board (the ``MSRB'' or ``Board'') filed with the Securities and Exchange Commission (the ``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change consisting of (i) proposed amendments to Rule G-10, on delivery of investor brochure, Rule G-8, on books and records to be made by brokers, dealers, and municipal securities dealers and municipal advisors, and Rule G-9, on preservation of records, and (ii) a proposed Board notice regarding electronic delivery and receipt of information by municipal advisors under Rule G-32, on disclosures in connection with primary offerings (collectively, the ``proposed rule change''). The proposed rule change was published for comment in the Federal Register on November 18, 2016.\3\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ Securities Exchange Act Release No. 79295 (November 14, 2016) (the ``Notice of Filing''), 81 FR 81837 (November 18, 2016). --------------------------------------------------------------------------- The Commission received five comment letters on the proposed rule change.\4\ On January 10, 2017, the MSRB responded to the comments received by the Commission \5\ and filed Amendment No. 1 to the proposed rule change (``Amendment No. 1'').\6\ The Commission is publishing this notice to solicit comments on Amendment No. 1 to the proposed rule change from interested persons and is approving the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. --------------------------------------------------------------------------- \4\ See Letters to Secretary, Commission, from Mike Nicholas, Chief Executive Officer, Bond Dealers of America (``BDA''), dated December 9, 2016 (the ``BDA Letter''); Matthew J. Gavaghan, Associate General Counsel, Janney Montgomery Scott LLC (``Janney''), dated December 9, 2016 (the ``Janney Letter''); Marnie Lambert, President, Public Investors Arbitration Bar Association (``PIABA''), dated December 9, 2016 (the ``PIABA Letter''); Susan Gaffney, Executive Director, National Association of Municipal Advisors (``NAMA''), dated December 12, 2016 (the ``NAMA Letter''); and Leo Karwejna, Chief Compliance Officer and Cheryl Maddox, General Counsel, Public Financial Management, Inc. and PFM Financial Advisors LLC (collectively, ``PFM''), dated December 13, 2016 (the ``PFM Letter''). \5\ See Letter to Secretary, Commission, from Pamela K. Ellis, Associate General Counsel, MSRB, dated January 10, 2017 (the ``MSRB Response Letter''), available at https://www.sec.gov/comments/sr-msrb-2016-15/msrb201615-1473509-130471.pdf. \6\ See Letter to Secretary, Commission, from Pamela K. Ellis, Associate General Counsel, MSRB, dated January 10, 2017, available at https://www.sec.gov/comments/sr-msrb-2016-15/msrb201615-1473522-130450.pdf. In Amendment No. 1, the MSRB partially amended the text of the proposed rule change to provide certain clarifications relating to the notifications that would be provided by municipal advisors to their municipal advisory clients and to the terms used with the recordkeeping of municipal advisory client complaints, to extend the proposed effective date, and to make other technical changes to clarify or simplify rule text. --------------------------------------------------------------------------- II. Description of Proposed Rule Change The proposed rule change, as modified by Amendment No. 1, consists of (i) proposed amendments to Rule G-10, on delivery of investor brochure, Rule G-8, on books and records to be made by brokers, dealers, and municipal securities dealers and municipal advisors, and Rule G-9, on preservation of records, and (ii) a proposed MSRB notice regarding electronic delivery and receipt of information by municipal advisors under Rule G-32, on disclosures in connection with primary offerings.\7\ --------------------------------------------------------------------------- \7\ See Notice of Filing. --------------------------------------------------------------------------- Following the financial crisis of 2008, Congress enacted the Dodd- Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank Act'').\8\ The Dodd-Frank Act amended Section 15B of the Exchange Act to establish a new federal regulatory regime requiring municipal advisors to register with the Commission, deeming them to owe a fiduciary duty to their municipal entity clients and granting the MSRB rulemaking authority over them. The MSRB, in the exercise of that rulemaking authority, has been developing a comprehensive regulatory framework for municipal advisors and their associated persons.\9\ --------------------------------------------------------------------------- \8\ Public Law No. 111-203, 124 Stat. 1376 (2010). \9\ MSRB Rule D-11 defines ``associated persons'' as follows: Unless the context otherwise requires or a rule of the Board otherwise specifically provides, the terms ``broker,'' ``dealer,'' ``municipal securities broker,'' ``municipal securities dealer,'' ``bank dealer,'' and ``municipal advisor'' shall refer to and include their respective associated persons. Unless otherwise specified, persons whose functions are solely clerical or ministerial shall not be considered associated persons for purposes of the Board's rules. --------------------------------------------------------------------------- Further, and concurrent with its efforts to develop a comprehensive regulatory framework for municipal advisors and their associated persons, the MSRB initiated a review of its rules and related interpretive guidance for brokers, dealers and municipal securities dealers (collectively, ``dealers'') and municipal advisors (municipal advisors, together with dealers, ``regulated entities''). The MSRB initiated that review in the context of the Board's obligation to protect investors, municipal entities, obligated persons, and the public interest. As part of that review, the MSRB solicited comments from market participants.\10\ In response, market participants recommended that the Board update Rule G-10.\11\ The MSRB has stated that the proposed rule change, as modified by Amendment No. 1, consisting of amendments to Rule G-10 and its related recordkeeping rules, Rules G-8 and G-9, and guidance under Rule G-32, is an important element of both MSRB regulatory initiatives.\12\ --------------------------------------------------------------------------- \10\ MSRB Notice 2012-63, Request for Comment on MSRB Rules and Interpretive Guidance (Dec. 18, 2012). \11\ See, e.g., Letter from David L. Cohen, Managing Director and Associate General Counsel, Securities Industry and Financial Markets Association, dated February 19, 2013, to Ronald W. Smith, Corporate Secretary, Municipal Securities Rulemaking Board (commenting that (i) the requirement to deliver an investor brochure under Rule G-10 should be eliminated, (ii) the investor brochure is of limited value, if any, to institutional investors as well as investors in municipal fund securities, and (iii) alternatively, the MSRB could accomplish the objective of Rule G-10 by posting the investor brochure on its Web site); Letter from Gerald K. Mayfield, Senior Counsel, Wells Fargo & Company Law Department, dated February 19, 2013, to Ronald W. Smith, Corporate Secretary, Municipal Securities Rulemaking Board (commenting that (i) the requirement to deliver an investor brochure under Rule G-10 should be eliminated, (ii) the investor brochure is of limited value, if any, to institutional investors as well as investors in municipal fund securities, and (iii) alternatively, the MSRB could accomplish the objective of Rule G-10 by posting the investor brochure on its Web site). \12\ See Notice of Filing. --------------------------------------------------------------------------- To extend its customer complaint and recordkeeping rules to municipal advisors and to modernize those rules, the Board filed the proposed rule change, as modified by Amendment No. 1, with the Commission. Specifically, [[Page 7899]] the proposed rule change would (i) extend the Board's customer complaint recordkeeping requirements to all municipal advisors (i.e., non-solicitor and solicitor municipal advisors) as well as align those recordkeeping requirements more closely with the customer complaint recordkeeping requirements of other financial regulators, (ii) require that all regulated entities retain their customer or municipal advisory client \13\ complaint records for six years, (iii) overhaul Rule G-10 so that the rule would more closely focus on customer and municipal advisory client education and protection as well as align that rule with customer education and protection rules of other financial regulators, and (iv) extend the Board's guidance under Rule G-32, Notice Regarding Electronic Delivery and Receipt of Information by Brokers, Dealers and Municipal Securities Dealers (Nov. 20, 1998) (the ``1998 Notice''), to municipal advisors. --------------------------------------------------------------------------- \13\ The proposed rule change, as amended by Amendment No. 1, in Rule G-8(e)(ii), would define a municipal advisory client as either a municipal entity or obligated person for whom the municipal advisor engages in municipal advisory activities as defined in MSRB Rule G-42(f)(iv), or a broker, dealer, municipal securities dealer, municipal advisor, or investment adviser (as defined in section 202 of the Investment Advisers Act of 1940) on behalf of whom the municipal advisor undertakes a solicitation of a municipal entity or obligated person, as defined in Rule 15Ba1-1(n), 17 CFR 240.15Ba1- 1(n), under the Act. --------------------------------------------------------------------------- In summary, by regulated entity, the proposed rule change, as modified by Amendment No. 1, would do the following: Municipal Advisorsamend Rule G-8 to exclude municipal advisors from the definition of ``customers;'' amend Rule G-8 to include the definition of ``municipal advisory client;'' amend Rule G-8 to extend the requirements that are similar to the rule's customer complaint recordkeeping requirements to municipal advisory client complaint recordkeeping; amend Rule G-8 to provide guidance in supplementary material that would define electronic recordkeeping; amend Rule G-8 to provide guidance in supplementary material that would remind a municipal advisor that it may be required to promptly report certain municipal advisory client complaints to other regulatory authorities; amend Rule G-9 to require that the records of municipal advisory client complaints be kept for at least six years; amend Rule G-10 to extend requirements that are similar to the rule's dealer customer protection and education requirements to municipal advisory client protection and education; and extend to municipal advisors, under Rule G-32, the guidance provided by the 1998 Notice, as relevant. Dealers Amend Rule G-8 to require that dealers keep a standardized complaint log electronically, using product and problem codes tailored for municipal securities, to document the written complaints of customers; amend Rule G-8 to define written customer complaints to include complaints received electronically by the dealer; amend Rule G-8 to provide guidance in supplementary material that would define electronic recordkeeping; amend Rule G-8 to provide guidance in supplementary material that would remind a dealer that it may be required to promptly report certain written customer complaints to other regulatory authorities; and amend Rule G-10 in its entirety so that the rule would more clearly focus on customer protection and education. A detailed rule discussion of the proposed rule change's recordkeeping requirements, customer and municipal advisory client education and protection requirements, and electronic delivery guidance to municipal advisors is contained in the Notice of Filing. The MSRB requested in the Notice of Filing that the proposed rule change be approved with an implementation date of six months after the Commission approval date for all changes.\14\ Pursuant to Amendment No. 1, the MSRB now requests that the proposed rule change be approved with an implementation date of nine months after the Commission approval date for all changes.\15\ --------------------------------------------------------------------------- \14\ See Notice of Filing. \15\ See Amendment No. 1. --------------------------------------------------------------------------- III. Summary of Comments Received and MSRB's Responses to Comments As noted previously, the Commission received five comment letters on the proposed rule change, and the MSRB Response Letter. Commenters generally expressed support for the principles behind the proposed rule change, but also expressed various concerns or suggested revisions. 1. Effective Date BDA urged that the MSRB provide at least 12 months, rather than the six months proposed in the Notice of Filing, to provide dealers with adequate time for implementation, especially given the resources required to implement other ongoing regulatory initiatives.\16\ The MSRB acknowledged that those other regulatory initiatives require significant attention by compliance and technology staff. In response, the MSRB, pursuant to Amendment No. 1, proposes an effective date of nine months after the Commission's approval date of all changes.\17\ --------------------------------------------------------------------------- \16\ See BDA Letter. \17\ See MSRB Response Letter. --------------------------------------------------------------------------- 2. Municipal Advisor Terms NAMA suggested that certain terms used in the proposed amendments to Rule G-8 be revised to more closely reflect terms more commonly used by municipal advisors. In particular, NAMA noted that the proposed rulemaking refers to a municipal advisory client's ``account.'' \18\ NAMA stated that such a phrase does not ``translate'' to municipal advisors. In response, the MSRB, pursuant to Amendment No. 1, proposes to replace ``account'' when used with a municipal advisory client with the phrase ``number or code, if any.'' \19\ --------------------------------------------------------------------------- \18\ See NAMA Letter. \19\ See MSRB Response Letter. --------------------------------------------------------------------------- 3. Customer and Municipal Advisory Client Brochures PIABA supported giving investors information about the protections provided by the MSRB and about how to file a complaint with a regulator, noting that the proposed amendments to Rule G-10 would provide for the education of customers or municipal advisory clients before they encounter a problem.\20\ PFM submitted that the ``proposed Rules . . . unnecessarily impose undue encumbrances of additional brochure delivery.'' \21\ BDA also requested clarity about when a municipal advisor should send the investor brochure to a municipal advisory client, and suggested that it was not necessary to send the investor brochure to an institutional investor. BDA suggested that the Board should develop a brochure that focuses on municipal advisory clients.\22\ NAMA and PFM commented that they needed [[Page 7900]] to review the brochure to provide sufficient comment.\23\ --------------------------------------------------------------------------- \20\ See PIABA Letter. \21\ See PFM Letter. \22\ BDA states that it ``requests clarity with when a municipal advisor should send the G-10 brochure to a municipal advisory client.'' BDA also stated that ``[i]f the MSRB is committed to requiring dealers to send the investor brochure to institutional investors, BDA recommends that MSRB provide clarity on `customer' for the purposes of G-10.'' See BDA Letter. \23\ See NAMA Letter, PFM Letter. --------------------------------------------------------------------------- The MSRB responded by stating that, unlike the current requirements of Rule G-10, the proposed amendments to Rule G-10 would not require that a regulated entity deliver a Rule G-10 brochure to its customer or municipal advisory client, but would require that a regulated entity provide only annual notifications to its customer or municipal advisory client about the availability of the brochure on the MSRB's Web site.\24\ Further, after carefully considering BDA's request for clarity regarding the use of the term ``promptly'' relating to when a municipal advisor must send the annual notifications required by the amendments to Rule G-10 to its municipal advisory client, the MSRB provided a technical change in Amendment No. 1 to clarify that ``promptly'' means ``promptly, after the establishment of a municipal advisory relationship.'' \25\ Although municipal advisors may elect to provide the first notification earlier, the MSRB believes this standard is consistent with the flexibility provided by the proposed rule change to include the proposed annual notifications with other materials required to be given by municipal advisors.\26\ --------------------------------------------------------------------------- \24\ See MSRB Response Letter. \25\ Id. \26\ Id. --------------------------------------------------------------------------- The MSRB further states that it believes that all customers and municipal advisory clients should be aware of the important protections provided by the MSRB's rules, the reminder that regulated entities are registered with the Commission, and the information about how to file a complaint with a regulator. Rule G-10 currently provides no exception from its requirements for institutional investors, and the MSRB believes that there is no reason why institutional investors should receive less of this information about the protections provided by MSRB rules and education than other investors.\27\ As discussed in the Notice of Filing, the MSRB believes that the annual notifications required by Rule G-10 present only a slight burden to regulated entities, but could represent a significant enhancement to customer or municipal advisory client protection and education.\28\ --------------------------------------------------------------------------- \27\ Id. \28\ See Notice of Filing. --------------------------------------------------------------------------- The MSRB agrees with BDA's view that the Board should use a separate brochure focused on municipal advisory activities. The Notice of Filing contemplated a separate brochure focused on municipal advisory activities, and the MSRB has stated that it will develop such a brochure.\29\ However, the MSRB notes that the content of the current investor brochure was not made part of Rule G-10. Likewise, the content of the future brochures has not been made part of the proposed amendment text. --------------------------------------------------------------------------- \29\ See MSRB Response Letter. --------------------------------------------------------------------------- 4. Product and Problem Codes BDA, Janney, NAMA and PFM commented on the problem and product codes that would be required by the proposed amendments to Rule G-8 for the electronic customer or municipal advisory client complaint logs.\30\ BDA and Janney commented that such codes should harmonize with the problem and product codes required by FINRA Rule 4530. BDA also commented that it believed that the MSRB and the Commission have existing independent reporting systems that allow municipal entities or obligated persons to file complaints directly to a regulator, which are more appropriate systems to monitor complaints than the MSRB developing an ``expansive set of problem codes.'' BDA, NAMA, and PFM urged that the Board publish the product and problem codes for comment.\31\ --------------------------------------------------------------------------- \30\ See BDA Letter, NAMA Letter, Janney Letter, PFM Letter. \31\ See BDA Letter, NAMA Letter, PFM Letter. --------------------------------------------------------------------------- The MSRB notes that it coordinates its rule interpretations and requirements with those of other financial regulators, including FINRA. This coordination has been and is occurring on an ongoing basis with respect to the product and problem codes. The MSRB is aware that having two different sets of compliance codes for dually registered regulated entities would impose significant compliance and cost burdens, and to lessen such burdens, the MSRB states that it would coordinate and harmonize the product and problem codes, and the methods for determining the appropriate codes, required by the proposed amendments to Rule G-8 with FINRA.\32\ --------------------------------------------------------------------------- \32\ See MSRB Response Letter. --------------------------------------------------------------------------- In response to BDA's comment that the MSRB and the SEC have existing independent reporting systems that allow municipal entities or obligated persons to file complaints directly with a regulator, the MSRB states that its complaint referral system is quite different than, for example, the Commission's well-established and comprehensive independent reporting system through its Office of Investor Education and Advocacy. The MSRB notes that its role has been to provide information about how an individual or firm may make a complaint to a regulator. If an individual or a regulated entity is unsure about which regulator the individual or firm should file the complaint with, that individual or firm may submit the complaint with the MSRB, and the MSRB then will forward the complaint to the appropriate regulator. The MSRB states that, unlike the Commission, the MSRB neither enforces its own rules nor surveils regulated entities; rather, other financial regulators enforce MSRB rules and perform market surveillance functions.\33\ The MSRB further notes that other financial regulators subject to the Commission's jurisdiction, such as FINRA, currently require that written customer complaints be tracked using an electronic log. In approving FINRA Rule 4530, the Commission found that the FINRA Rule 4530 was consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities association.\34\ --------------------------------------------------------------------------- \33\ Id. \34\ Securities Exchange Act Release No. 63260 (Nov. 5, 2010), 75 FR 69508 (Nov. 12, 2010). --------------------------------------------------------------------------- As to the assertion that the electronic complaint log represents overregulation by the MSRB, the MSRB notes that dealers that are registered with FINRA are currently using electronic logs to track and code written customer complaints. The MSRB believes that the electronic complaint log requirement not only would assist regulators in enforcing MSRB rules and performing market surveillance, but also that the electronic complaint log would be used as a tool by regulated entities as part of their risk management programs. The MSRB believes that FINRA, the Commission, and numerous FINRA members, including members that are also registered with the MSRB, have found such electronic complaint logs to be valuable.\35\ --------------------------------------------------------------------------- \35\ See MSRB Response Letter. --------------------------------------------------------------------------- The MSRB states that federal securities laws do not require that the Board solicit public comment on the product and problem codes to be used under the proposed amendments to Rule G-8. The MSRB notes that FINRA recently revised its product and problem codes used for reporting customer complaints under FINRA Rule 4530.\36\ FINRA did not seek public comment on the revisions to those product and problem codes; the Board [[Page 7901]] would not expect to seek public comment on the product and problem codes to be used with the proposed amendments to Rule G-8.\37\ --------------------------------------------------------------------------- \36\ In 2014, FINRA updated FINRA Rule 4530's problem and product codes and provided a six-month implementation date. See Regulatory Notice 14-20 (May 7, 2014). \37\ See MSRB Response Letter. --------------------------------------------------------------------------- 5. Recordkeeping BDA, NAMA, PIABA, and PFM provided comments and suggestions about the Board's proposed amendments to Rule G-8.\38\ Those comments and suggestions related to the regulatory burden caused by the proposed amendments to Rule G-8, guidance as to certain of the terms used in the electronic complaint log, and guidance as to the development of the electronic complaint log itself. --------------------------------------------------------------------------- \38\ See BDA Letter, NAMA Letter, PIABA Letter, PFM letter. --------------------------------------------------------------------------- PFM asserted that the proposed rule change ``unnecessarily impose[s] undue encumbrances of additional brochure delivery and recordkeeping requirements.'' \39\ BDA submitted that it did not think that this type of ``complaint and recordkeeping system is valuable for municipal advisory clients,'' \40\ and NAMA asserted that the recording of ``actions'' in the electronic complaint log required by the proposed amendments to Rule G-8 is not necessary because of the supervisory requirements set forth in MSRB Rule G-44.\41\ --------------------------------------------------------------------------- \39\ See PFM Letter. \40\ See BDA Letter. \41\ See NAMA Letter. --------------------------------------------------------------------------- The MSRB states that it believes that the burden on regulated entities from the proposed rule change would not be significant.\42\ The proposed rule change would align Rule G-8 with the customer complaint recordkeeping requirements of other financial regulators. Rule 17a-3(a)(18) under the Act \43\ and FINRA Rules 4513 and 4530 require information about customer complaints that is similar to what is required by the proposed rule change. The MSRB has stated that it would harmonize its product and problem codes with those required by FINRA Rule 4530.\44\ --------------------------------------------------------------------------- \42\ See MSRB Response Letter. \43\ 17 CFR 240.19b-4. \44\ See MSRB Response Letter. --------------------------------------------------------------------------- Although the proposed rule change would represent a new recordkeeping burden on municipal advisors, the MSRB believes that it would not be a significant burden. The MSRB states that it is generally a good business practice, especially for the development of a regulated entity's risk management systems, to track written complaints using standard codes in an electronic complaint log. Any regulatory burden imposed by the proposed rulemaking is, in part, dependent upon the municipal advisor and the number of municipal advisory client complaints that the municipal advisor receives. The MSRB anticipates that smaller municipal advisors would have fewer clients and accordingly may be likely to receive fewer complaints than larger municipal advisors. Further, the MSRB states that it mitigates that regulatory burden by providing flexibility as to how those electronic records may be kept.\45\ --------------------------------------------------------------------------- \45\ Id. --------------------------------------------------------------------------- The MSRB believes that an electronic log of complaints is necessary, and that such need is not lessened by the supervisory and compliance obligations of municipal advisors set forth in MSRB Rule G- 44. The standard electronic format required by the proposed amendments would enhance the ability of financial regulators to conduct more cost- effective and efficient inspections and surveillance of regulated entities. MSRB Rule G-44 does not require that records of complaints be kept in a standard electronic format across all regulated entities. Further, the MSRB notes that many dealers that have been subject to MSRB Rule G-27, on supervision, a rule that is similar to MSRB Rule G- 44, also have been subject to FINRA's electronic customer complaint recordkeeping requirements. The MSRB believes that the FINRA electronic customer complaint log requirements have proven useful in addition to general supervisory obligations.\46\ --------------------------------------------------------------------------- \46\ Id. --------------------------------------------------------------------------- NAMA requested guidance about the meaning of certain terms to be used in the electronic complaint log.\47\ The MSRB believes that the titles of the codes, as well as the brief description of those codes published by the Board, as appropriate, will provide guidance as to the terms used with the electronic complaint log. Further, as discussed above under ``Product and Problem Codes,'' the MSRB would harmonize the product and problem terms used for the electronic log of customer and municipal advisory client complaints with the codes required by FINRA Rule 4530.\48\ --------------------------------------------------------------------------- \47\ See NAMA Letter. \48\ See MSRB Response Letter. --------------------------------------------------------------------------- NAMA requested guidance as to how a municipal advisor should create an electronic complaint log. The MSRB notes that Proposed Supplementary Material .01 broadly defines electronic format to include ``any computer software program that is used for storing, organizing and/or manipulating data that can be provided promptly upon request to a regulatory authority.'' \49\ The MSRB states that it has determined that the degree of flexibility the MSRB is providing with the proposed rule change about the format of the electronic complaint log is preferable at this juncture.\50\ --------------------------------------------------------------------------- \49\ See Notice of Filing and Amendment No. 1. \50\ See MSRB Response Letter. --------------------------------------------------------------------------- NAMA and PFM commented about the municipal advisor record retention requirements set forth in the proposed amendments to Rule G-9. NAMA commented that municipal advisor records should be kept for five years and not six years.\51\ PFM commented that the Board lacked statutory authority to extend the record retention period for municipal advisors for one year and expressed ``genuine concern regarding the misalignment regarding the proposed MSRB Rule changes and current Exchange Act requirements.'' \52\ --------------------------------------------------------------------------- \51\ See NAMA Letter. \52\ See PFM Letter. --------------------------------------------------------------------------- After carefully considering the comments, the MSRB states that it has determined that the important reasons for retaining records of municipal advisory client complaints for six years remain valid. As discussed in the Notice of Filing, such retention period would assist other financial regulators with their inspections of municipal advisors (those inspections may not occur for several years after the municipal advisory client submitted the complaint) and with their surveillance of municipal advisors. Further, by requiring that municipal advisors retain records of municipal advisory client complaints for six years, the MSRB states that it would be ``leveling the playing field'' between dealers and municipal advisors and between dealer municipal advisors and non-dealer municipal advisors.\53\ Dealers, including dealer municipal advisors, are required to retain records of customer complaints for six years under current Board rules. --------------------------------------------------------------------------- \53\ See MSRB Response Letter. --------------------------------------------------------------------------- The MSRB states that it disagrees with PFM's assertions that the Board lacks statutory authority to develop a record retention period under the Act for municipal advisor records. The MSRB notes that Section 15B(b)(2)(g) of the Act \54\ specifically requires that the MSRB prescribe the records that are to be made and kept by dealers and municipal advisors and to prescribe the length of time the records are to be kept. The MSRB further notes that the Commission has approved as consistent with the Exchange Act the MSRB's several previous municipal advisor [[Page 7902]] recordkeeping proposals, including select six-year retention periods.\55\ --------------------------------------------------------------------------- \54\ 15 U.S.C. 78o-4(b)(2)(g). \55\ See, e.g., Exchange Act Release No. 76753 (Dec. 23, 2015), 80 FR 81614 (Dec. 30, 2015) (approving Rule G-42 and amendments to Rule G-8); Exchange Act Release No. 73415 (Oct. 23, 2014), 79 FR 64423 (Oct. 29, 2014) (approving Rule G-44 and amendments to Rules G-8 and G-9). --------------------------------------------------------------------------- 6. Annual Notifications The Commission received several comments about the annual notifications concerning the municipal advisor's registration, the MSRB's Web site address, and availability of a municipal advisory client brochure about the protections provided by the MSRB's rules and information about filing a complaint with a financial regulator required by the proposed amendments to Rule G-10 (the ``annual notifications''). Those comments concerned the location of those annual notifications and the ability to include the annual notifications with other materials. NAMA suggested that in lieu of providing the written annual notifications to their municipal advisory clients, municipal advisors should have the option to post the annual notifications on their Web sites.\56\ NAMA and PFM \57\ suggested that the annual notifications be included with the written disclosure of all material conflicts of interest and other information required to be made by a municipal advisor by Rule G-42(b).\58\ --------------------------------------------------------------------------- \56\ See NAMA Letter. \57\ See NAMA Letter, PFM Letter. \58\ Rule G-42(b) provides, in part: ``Disclosure of Conflicts of Interest and Other Information. A municipal advisor must, prior to or upon engaging in municipal advisory activities, provide to the municipal entity or obligated person client full and fair disclosure in writing of: (i) all material conflicts of interest . . . [and] (ii) any legal or disciplinary event that is material to the client's evaluation of the municipal advisor or the integrity of its management or advisory personnel. . . .'' --------------------------------------------------------------------------- The MSRB states that it has carefully considered commenters' suggestions, and has determined that a municipal advisor should not have the option to post the annual notifications on its Web site in lieu of sending those notifications to its municipal advisory client. The Board believes that the purpose of the proposed amendments is best achieved by individual annual notifications to a customer or municipal advisor client. Nonetheless, if a regulated entity would like to post the annual notifications on its Web site, in addition to sending the written annual notifications to its customers or municipal advisory clients, the regulated entity may do so as long as the information on the regulated entity's Web site complies with Board and any other applicable laws, rules and regulations.\59\ --------------------------------------------------------------------------- \59\ See MSRB Response Letter. --------------------------------------------------------------------------- As proposed, the amendments to Rule G-10 would provide a regulated entity with the flexibility to include the written annual notifications with other materials. The MSRB notes that those other materials may include the written disclosure of material conflicts of interest and other information required to be provided by a municipal advisor under MSRB Rule G-42(b). Because the proposed rule change would provide municipal advisors with the option to include the annual notifications with the written disclosure of material conflicts of interest and other information required by MSRB Rule G-42(b), the MSRB believes that the rule language, as proposed, provides sufficient flexibility to address NAMA's and PFM's suggestion that the annual notifications be included with the written disclosures required under Rule G-42(b).\60\ --------------------------------------------------------------------------- \60\ Id. --------------------------------------------------------------------------- 7. Sufficiency of Comment Period BDA, NAMA, and PFM commented that the Board did not solicit public comment on the proposed rule change before the Board filed the proposed rule change with the Commission.\61\ BDA submitted that the MSRB is proceeding with ``unnecessary haste'' and that if the MSRB issued a request for comment on the proposed rule change, it could have ``received feedback and tailored these rule amendments to the activities of municipal advisors.'' \62\ NAMA commented that the municipal advisor community should be afforded the same opportunity to comment prior to a proposal being sent to the Commission that the dealer community is afforded and submitted that municipal advisors would have flagged some of the vague and duplicative provisions of the proposed rulemaking as well as use of clearly inapplicable terminology.\63\ PFM stated that it was ``a bit dismayed'' that the MSRB did not publish a request for comment before filing the proposed rule change with the Commission, and suggested that without such a prior comment opportunity, PFM did not have ``adequate opportunity for review and written comment.'' \64\ --------------------------------------------------------------------------- \61\ See BDA Letter, NAMA Letter, PFM Letter. \62\ See BDA Letter. \63\ See NAMA Letter. \64\ See PFM Letter. --------------------------------------------------------------------------- The MSRB responds that the Commission provided market participants with the fulsome comment period generally required under the federal securities laws, which do not require the Board to seek public comment before submitting a rulemaking proposal to the Commission.\65\ Market participants provided comment on the proposed rule change, and as noted earlier, in response to those comments, the Board is filing Amendment No. 1. --------------------------------------------------------------------------- \65\ See MSRB Response Letter. --------------------------------------------------------------------------- Further, the MSRB notes that, in this case, not only did market participants request the proposed rule change, but every commenter supported the purposes of the proposed rule change. The proposed rule change would enhance the MSRB's ability to protect and educate customers and municipal advisory clients, which protections are vital to the Board's mission. The proposed rule change also would harmonize the Board's customer complaint rule with that of other financial regulators--a goal that is important both to the Board and to market participants.\66\ --------------------------------------------------------------------------- \66\ Id. --------------------------------------------------------------------------- 8. Electronic Guidance BDA commented that the MSRB's Notice Regarding Electronic Delivery and Receipt of Information by Brokers, Dealers and Municipal Securities Dealers--November 20, 1998 (the ``1998 Notice'') should not apply to municipal advisory relationships. BDA stated that ``[a]s with attorney- client relationships . . ., municipal entities and obligated persons know exactly how they prefer to communicate and there is no need for a Federal regulator to regulate electronic communications in those relationships.'' \67\ --------------------------------------------------------------------------- \67\ See BDA Letter. --------------------------------------------------------------------------- The MSRB stated that the 1998 Notice provides dealers with the MSRB's interpretation about the use of electronic media to deliver and receive information under Board rules. The proposed rule change would extend that interpretation to municipal advisors. Without that extension, some vagueness might exist regarding municipal advisors' ability to use electronic media to deliver and receive information required under Board rules.\68\ --------------------------------------------------------------------------- \68\ See MSRB Response Letter. --------------------------------------------------------------------------- 9. Other Comments The other suggestions that the Commission received about the proposed rule change related to (i) expansion of the proposed rule change, (ii) concerns about the complaint process, and (iii) concerns about the economic impact of the proposed rule change on small municipal advisors. PIABA supported the proposed rule change, but also suggested that the [[Page 7903]] proposed rule change ``go a step further'' to provide investors with access to the electronic complaint logs.\69\ NAMA expressed concern that the proposed rule change would require that a municipal advisory client make its complaint directly with the municipal advisor instead of with a regulator. NAMA also suggested that the Board consider the economic impact of the proposed rule change, and the cumulative effect of all Board rules on small municipal advisors.\70\ --------------------------------------------------------------------------- \69\ See PIABA Letter. \70\ See NAMA Letter. --------------------------------------------------------------------------- The MSRB states that it recognizes that market transparency is important for investors. However, the MSRB is concerned that requiring electronic complaint logs to be available to customers and municipal advisory clients may not only mislead them because certain complaints may not be as material as others, but also may have a chilling effect on a regulated entity's reporting of written customer or client complaints, which could undermine the goals of the rule.\71\ --------------------------------------------------------------------------- \71\ See MSRB Response Letter. --------------------------------------------------------------------------- In addition, the proposed amendments to Rule G-10 do not set forth any requirement that a municipal advisory client make a complaint to its municipal advisor nor do those proposed amendments require that a municipal advisory client submit any complaint that it may have to a particular regulator. A municipal advisory client would continue to be able to submit its complaint to any party it considers appropriate, based on, among other things, the notifications and educational materials it receives.\72\ --------------------------------------------------------------------------- \72\ Id. --------------------------------------------------------------------------- Further, in connection with concerns about the economic impact of the proposed rule change on small municipal advisors, the MSRB states that it anticipates that smaller municipal advisors would have fewer clients and accordingly may be likely to receive fewer complaints than larger municipal advisors.\73\ Further, the MSRB states that it mitigates that regulatory burden by providing flexibility as to how those electronic records may be kept.\74\ --------------------------------------------------------------------------- \73\ See MSRB Response Letter. \74\ Id. --------------------------------------------------------------------------- IV. Discussion and Commission Findings The Commission has carefully considered the proposed rule change, as modified by Amendment No. 1, the comments letters received, and the MSRB Response Letter. The Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to the MSRB. In particular, the proposed rule change, as modified by Amendment No.1, is consistent with Sections 15B(b)(2) and 15B(b)(2)(C) of the Act.\75\ Section 15B(b)(2) of the Act provides that the MSRB shall propose and adopt rules to effect the purposes of that title 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.\76\ Section 15B(b)(2)(C) of the Act, provides that, among other things, the rules of the MSRB 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.\77\ The Commission believes that the proposed rule change is reasonably designed to prevent fraudulent and manipulative practices, promote just and equitable principles of trade, foster cooperation and coordination with persons engaged in regulating transactions in municipal securities and municipal financial products, and protect investors, municipal entities, obligated persons and the public interest by developing more comprehensive and modern customer and municipal advisory client complaint and recordkeeping rules. Furthermore, the Commission believes that by focusing on customer and municipal advisory client education and protection and enhancing the related recordkeeping requirements, the proposed rule change is reasonably designed to protect investors, municipal entities, obligated persons, and the public interest. Additionally, the proposed rule change would align the MSRB's customer and municipal advisory client complaint rules and related recordkeeping requirements with those of other financial regulators which will, among other things, promote compliance with MSRB rules by providing regulated entities with the opportunity to streamline their compliance procedures. In addition, the proposed rule change, according to the MSRB, would enhance the ability of other financial regulators to conduct more cost-effective and efficient inspections and surveillance of regulated entities. --------------------------------------------------------------------------- \75\ 15 U.S.C. 78o-4(b)(2) and (b)(2)(C). \76\ 15 U.S.C. 78o-4(b)(2). \77\ 15 U.S.C. 78o-4(b)(2)(C). --------------------------------------------------------------------------- The Commission also finds that the proposed rule change, as modified by Amendment No.1, is consistent with Section 15B(b)(2)(L)(iv) of the Act in that it does 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.\78\ Although the proposed rule change would affect all municipal advisors, including small municipal advisors, the proposed rule change is a necessary and appropriate regulatory burden in order to protect municipal entities and obligated persons. For example, under the proposed rule change, a municipal advisory client would be able to receive detailed and relevant information about its municipal advisor, the protections provided by MSRB rules, and how to make a complaint in a timely and consistent fashion. --------------------------------------------------------------------------- \78\ 15 U.S.C. 78o-4(b)(2)(L)(iv). --------------------------------------------------------------------------- The Commission also finds that the proposed rule change, as modified by Amendment No.1, is consistent with Section 15B(b)(2)(G) of the Act which provides that the MSRB's rules shall prescribe records to be made and kept by municipal securities brokers, municipal securities dealers, and municipal advisors and the periods for which such records shall be preserved.\79\ The proposed rule change would, among other things, enhance the current customer complaint recordkeeping requirements under Rule G-8 by requiring that dealers keep more detailed information about written customer complaints in an electronic format and then would extend those recordkeeping requirements to municipal advisors. In addition, the proposed rule change would extend the [[Page 7904]] six-year record retention period applicable to customer complaints to municipal advisory client complaints. --------------------------------------------------------------------------- \79\ 15 U.S.C. 78o-4(b)(2)(G). --------------------------------------------------------------------------- In approving the proposed rule change, as modified by Amendment No.1, the Commission has also considered the impact of the proposed rule change on efficiency, competition, and capital formation.\80\ The Commission does not believe that the proposed rule change, as modified by Amendment No. 1 would impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. --------------------------------------------------------------------------- \80\ 15 U.S.C. 78c(f). --------------------------------------------------------------------------- For the reasons noted above, the Commission believes that the proposed rule change, as modified by Amendment No. 1, is consistent with the Act. V. Solicitation of Comments on Amendment No. 1 Interested persons are invited to submit written data, views, and arguments concerning Amendment No. 1, including whether the proposed rule change, as modified by Amendment No.1, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments Use 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-2016-15 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-2016-15. 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-2016-15 and should be submitted on or before February 13, 2017. VI. Accelerated Approval of Proposed Rule Change as Modified by Amendment No. 1 The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 1, prior to the 30th day after the date of publication of Amendment No. 1 in the Federal Register. As discussed above, Amendment No. 1 partially amends the text of the proposed rule change to provide certain clarifications relating to the notifications that would be provided by municipal advisors to their municipal advisory clients and to the terms used with the recordkeeping of municipal advisory client complaints, to extend the proposed effective date, and to make other technical changes to clarify or simplify rule text.\81\ Specifically, the changes respond to commenters' concerns, are technical in nature, and clarify or simplify the proposed rule change. The MSRB states that Amendment No. 1 in many respects eliminates unnecessary language by relying on terms that are defined in the MSRB's rule book, the Act, or Commission rules under the Act.\82\ In addition, the MSRB notes that the changes are consistent with the purposes of the proposed rule change to advance the development of a comprehensive regulatory framework for municipal advisors and to update the Board's customer complaint rules. With respect to those portions of Amendment No. 1 that modify certain definitions, the MSRB notes that the proposed rule change, as described in the Notice of Filing, contemplated that the clients of both solicitor and non-solicitor municipal advisors would be covered by the proposed rule change.\83\ According to the MSRB, the precision added to certain definitions by Amendment No. 1 parallels the precision with which the MSRB defines a municipal advisory client of a solicitor municipal advisor and eliminates unnecessary language.\84\ The MSRB believes other technical changes made serve to clarify or simplify the proposed rule change. --------------------------------------------------------------------------- \81\ Supra note 6. \82\ See Amendment No. 1. \83\ See Notice of Filing. \84\ See Amendment No. 1. --------------------------------------------------------------------------- For the foregoing reasons, the Commission finds good cause for approving the proposed rule change, as modified by Amendment No. 1, on an accelerated basis, pursuant to Section 19(b)(2) of the Act. VII. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\85\ that the proposed rule change, as modified by Amendment No. 1 (SR-MSRB-2016-15) be, and hereby is, approved on an accelerated basis. --------------------------------------------------------------------------- \85\ 15 U.S.C. 78s(b)(2). For the Commission, pursuant to delegated authority.\86\ --------------------------------------------------------------------------- \86\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-01300 Filed 1-19-17; 8:45 am] BILLING CODE 8011-01-P
![7898 Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Notices
For the Commission, by the Division of MSRB responded to the comments framework for municipal advisors and
Trading and Markets, pursuant to delegated received by the Commission 5 and filed their associated persons.9
authority.21 Amendment No. 1 to the proposed rule Further, and concurrent with its
Eduardo A. Aleman, change (‘‘Amendment No. 1’’).6 The efforts to develop a comprehensive
Assistant Secretary. Commission is publishing this notice to regulatory framework for municipal
[FR Doc. 2017–01296 Filed 1–19–17; 8:45 am] solicit comments on Amendment No. 1 advisors and their associated persons,
BILLING CODE 8011–01–P to the proposed rule change from the MSRB initiated a review of its rules
interested persons and is approving the and related interpretive guidance for
proposed rule change, as modified by brokers, dealers and municipal
SECURITIES AND EXCHANGE Amendment No. 1, on an accelerated securities dealers (collectively,
COMMISSION basis. ‘‘dealers’’) and municipal advisors
(municipal advisors, together with
[Release No. 34–79801; File No. SR–MSRB– II. Description of Proposed Rule Change dealers, ‘‘regulated entities’’). The
2016–15]
The proposed rule change, as MSRB initiated that review in the
Self-Regulatory Organizations; modified by Amendment No. 1, consists context of the Board’s obligation to
Municipal Securities Rulemaking of (i) proposed amendments to Rule G– protect investors, municipal entities,
Board; Notice of Filing of Amendment 10, on delivery of investor brochure, obligated persons, and the public
No. 1 and Order Granting Accelerated Rule G–8, on books and records to be interest. As part of that review, the
Approval of a Proposed Rule Change, made by brokers, dealers, and municipal MSRB solicited comments from market
as Modified by Amendment No. 1, To securities dealers and municipal participants.10 In response, market
Extend the MSRB’s Customer advisors, and Rule G–9, on preservation participants recommended that the
Complaint and Related Recordkeeping of records, and (ii) a proposed MSRB Board update Rule G–10.11 The MSRB
Rules to Municipal Advisors and To notice regarding electronic delivery and has stated that the proposed rule
Modernize Those Rules receipt of information by municipal change, as modified by Amendment No.
advisors under Rule G–32, on 1, consisting of amendments to Rule G–
January 13, 2017. disclosures in connection with primary 10 and its related recordkeeping rules,
I. Introduction offerings.7 Rules G–8 and G–9, and guidance under
Following the financial crisis of 2008, Rule G–32, is an important element of
On November 1, 2016, the Municipal Congress enacted the Dodd-Frank Wall both MSRB regulatory initiatives.12
Securities Rulemaking Board (the Street Reform and Consumer Protection To extend its customer complaint and
‘‘MSRB’’ or ‘‘Board’’) filed with the Act (the ‘‘Dodd-Frank Act’’).8 The Dodd- recordkeeping rules to municipal
Securities and Exchange Commission Frank Act amended Section 15B of the advisors and to modernize those rules,
(the ‘‘SEC’’ or ‘‘Commission’’), pursuant Exchange Act to establish a new federal the Board filed the proposed rule
to Section 19(b)(1) of the Securities regulatory regime requiring municipal change, as modified by Amendment No.
Exchange Act of 1934 (‘‘Act’’) 1 and Rule advisors to register with the 1, with the Commission. Specifically,
19b–4 thereunder,2 a proposed rule Commission, deeming them to owe a
change consisting of (i) proposed fiduciary duty to their municipal entity
9 MSRB Rule D–11 defines ‘‘associated persons’’
amendments to Rule G–10, on delivery clients and granting the MSRB
as follows:
of investor brochure, Rule G–8, on Unless the context otherwise requires or a rule of
rulemaking authority over them. The the Board otherwise specifically provides, the terms
books and records to be made by MSRB, in the exercise of that ‘‘broker,’’ ‘‘dealer,’’ ‘‘municipal securities broker,’’
brokers, dealers, and municipal rulemaking authority, has been ‘‘municipal securities dealer,’’ ‘‘bank dealer,’’ and
securities dealers and municipal developing a comprehensive regulatory ‘‘municipal advisor’’ shall refer to and include their
advisors, and Rule G–9, on preservation respective associated persons. Unless otherwise
specified, persons whose functions are solely
of records, and (ii) a proposed Board dated December 9, 2016 (the ‘‘PIABA Letter’’); clerical or ministerial shall not be considered
notice regarding electronic delivery and Susan Gaffney, Executive Director, National associated persons for purposes of the Board’s rules.
receipt of information by municipal Association of Municipal Advisors (‘‘NAMA’’), 10 MSRB Notice 2012–63, Request for Comment
advisors under Rule G–32, on dated December 12, 2016 (the ‘‘NAMA Letter’’); and on MSRB Rules and Interpretive Guidance (Dec. 18,
Leo Karwejna, Chief Compliance Officer and Cheryl 2012).
disclosures in connection with primary Maddox, General Counsel, Public Financial 11 See, e.g., Letter from David L. Cohen, Managing
offerings (collectively, the ‘‘proposed Management, Inc. and PFM Financial Advisors LLC Director and Associate General Counsel, Securities
rule change’’). The proposed rule (collectively, ‘‘PFM’’), dated December 13, 2016 (the Industry and Financial Markets Association, dated
change was published for comment in ‘‘PFM Letter’’). February 19, 2013, to Ronald W. Smith, Corporate
5 See Letter to Secretary, Commission, from
the Federal Register on November 18, Secretary, Municipal Securities Rulemaking Board
Pamela K. Ellis, Associate General Counsel, MSRB, (commenting that (i) the requirement to deliver an
2016.3 dated January 10, 2017 (the ‘‘MSRB Response investor brochure under Rule G–10 should be
The Commission received five Letter’’), available at https://www.sec.gov/ eliminated, (ii) the investor brochure is of limited
comment letters on the proposed rule comments/sr-msrb-2016-15/msrb201615-1473509- value, if any, to institutional investors as well as
130471.pdf. investors in municipal fund securities, and (iii)
change.4 On January 10, 2017, the 6 See Letter to Secretary, Commission, from
alternatively, the MSRB could accomplish the
Pamela K. Ellis, Associate General Counsel, MSRB, objective of Rule G–10 by posting the investor
21 17 CFR 200.30–3(a)(12). dated January 10, 2017, available at https:// brochure on its Web site); Letter from Gerald K.
1 15 U.S.C. 78s(b)(1). www.sec.gov/comments/sr-msrb-2016-15/ Mayfield, Senior Counsel, Wells Fargo & Company
2 17 CFR 240.19b–4. msrb201615-1473522-130450.pdf. In Amendment Law Department, dated February 19, 2013, to
3 Securities Exchange Act Release No. 79295 No. 1, the MSRB partially amended the text of the Ronald W. Smith, Corporate Secretary, Municipal
(November 14, 2016) (the ‘‘Notice of Filing’’), 81 FR proposed rule change to provide certain Securities Rulemaking Board (commenting that (i)
mstockstill on DSK3G9T082PROD with NOTICES
81837 (November 18, 2016). clarifications relating to the notifications that would the requirement to deliver an investor brochure
4 See Letters to Secretary, Commission, from Mike be provided by municipal advisors to their under Rule G–10 should be eliminated, (ii) the
Nicholas, Chief Executive Officer, Bond Dealers of municipal advisory clients and to the terms used investor brochure is of limited value, if any, to
America (‘‘BDA’’), dated December 9, 2016 (the with the recordkeeping of municipal advisory client institutional investors as well as investors in
‘‘BDA Letter’’); Matthew J. Gavaghan, Associate complaints, to extend the proposed effective date, municipal fund securities, and (iii) alternatively,
General Counsel, Janney Montgomery Scott LLC and to make other technical changes to clarify or the MSRB could accomplish the objective of Rule
(‘‘Janney’’), dated December 9, 2016 (the ‘‘Janney simplify rule text. G–10 by posting the investor brochure on its Web
7 See Notice of Filing. site).
Letter’’); Marnie Lambert, President, Public
Investors Arbitration Bar Association (‘‘PIABA’’), 8 Public Law No. 111–203, 124 Stat. 1376 (2010). 12 See Notice of Filing.
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![Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Notices 7899
the proposed rule change would (i) rule’s dealer customer protection and for implementation, especially given the
extend the Board’s customer complaint education requirements to municipal resources required to implement other
recordkeeping requirements to all advisory client protection and ongoing regulatory initiatives.16 The
municipal advisors (i.e., non-solicitor education; and MSRB acknowledged that those other
and solicitor municipal advisors) as • extend to municipal advisors, under regulatory initiatives require significant
well as align those recordkeeping Rule G–32, the guidance provided by attention by compliance and technology
requirements more closely with the the 1998 Notice, as relevant. staff. In response, the MSRB, pursuant
customer complaint recordkeeping to Amendment No. 1, proposes an
Dealers
requirements of other financial effective date of nine months after the
regulators, (ii) require that all regulated • Amend Rule G–8 to require that
Commission’s approval date of all
entities retain their customer or dealers keep a standardized complaint
log electronically, using product and changes.17
municipal advisory client 13 complaint
records for six years, (iii) overhaul Rule problem codes tailored for municipal 2. Municipal Advisor Terms
G–10 so that the rule would more securities, to document the written
closely focus on customer and complaints of customers; NAMA suggested that certain terms
municipal advisory client education and • amend Rule G–8 to define written used in the proposed amendments to
protection as well as align that rule with customer complaints to include Rule G–8 be revised to more closely
customer education and protection rules complaints received electronically by reflect terms more commonly used by
of other financial regulators, and (iv) the dealer; municipal advisors. In particular,
extend the Board’s guidance under Rule • amend Rule G–8 to provide NAMA noted that the proposed
G–32, Notice Regarding Electronic guidance in supplementary material that rulemaking refers to a municipal
Delivery and Receipt of Information by would define electronic recordkeeping; advisory client’s ‘‘account.’’ 18 NAMA
Brokers, Dealers and Municipal • amend Rule G–8 to provide stated that such a phrase does not
Securities Dealers (Nov. 20, 1998) (the guidance in supplementary material that ‘‘translate’’ to municipal advisors. In
‘‘1998 Notice’’), to municipal advisors. would remind a dealer that it may be response, the MSRB, pursuant to
In summary, by regulated entity, the required to promptly report certain Amendment No. 1, proposes to replace
proposed rule change, as modified by written customer complaints to other ‘‘account’’ when used with a municipal
Amendment No. 1, would do the regulatory authorities; and advisory client with the phrase ‘‘number
following: • amend Rule G–10 in its entirety so
or code, if any.’’ 19
that the rule would more clearly focus
Municipal Advisors
on customer protection and education. 3. Customer and Municipal Advisory
• amend Rule G–8 to exclude A detailed rule discussion of the Client Brochures
municipal advisors from the definition proposed rule change’s recordkeeping
of ‘‘customers;’’ requirements, customer and municipal PIABA supported giving investors
• amend Rule G–8 to include the advisory client education and protection information about the protections
definition of ‘‘municipal advisory requirements, and electronic delivery provided by the MSRB and about how
client;’’ guidance to municipal advisors is to file a complaint with a regulator,
• amend Rule G–8 to extend the contained in the Notice of Filing. noting that the proposed amendments to
requirements that are similar to the The MSRB requested in the Notice of Rule G–10 would provide for the
rule’s customer complaint Filing that the proposed rule change be education of customers or municipal
recordkeeping requirements to approved with an implementation date advisory clients before they encounter a
municipal advisory client complaint of six months after the Commission problem.20 PFM submitted that the
recordkeeping; approval date for all changes.14
• amend Rule G–8 to provide ‘‘proposed Rules . . . unnecessarily
Pursuant to Amendment No. 1, the impose undue encumbrances of
guidance in supplementary material that
MSRB now requests that the proposed additional brochure delivery.’’ 21 BDA
would define electronic recordkeeping;
• amend Rule G–8 to provide rule change be approved with an also requested clarity about when a
guidance in supplementary material that implementation date of nine months municipal advisor should send the
would remind a municipal advisor that after the Commission approval date for investor brochure to a municipal
it may be required to promptly report all changes.15 advisory client, and suggested that it
certain municipal advisory client III. Summary of Comments Received was not necessary to send the investor
complaints to other regulatory and MSRB’s Responses to Comments brochure to an institutional investor.
authorities; BDA suggested that the Board should
• amend Rule G–9 to require that the As noted previously, the Commission
received five comment letters on the develop a brochure that focuses on
records of municipal advisory client municipal advisory clients.22 NAMA
complaints be kept for at least six years; proposed rule change, and the MSRB
Response Letter. Commenters generally and PFM commented that they needed
• amend Rule G–10 to extend
requirements that are similar to the expressed support for the principles
16 See BDA Letter.
behind the proposed rule change, but 17 See MSRB Response Letter.
13 The proposed rule change, as amended by also expressed various concerns or 18 See NAMA Letter.
Amendment No. 1, in Rule G–8(e)(ii), would define suggested revisions. 19 See MSRB Response Letter.
a municipal advisory client as either a municipal 20 See PIABA Letter.
entity or obligated person for whom the municipal 1. Effective Date
mstockstill on DSK3G9T082PROD with NOTICES
21 See PFM Letter.
advisor engages in municipal advisory activities as
defined in MSRB Rule G–42(f)(iv), or a broker, BDA urged that the MSRB provide at 22 BDA states that it ‘‘requests clarity with when
dealer, municipal securities dealer, municipal least 12 months, rather than the six a municipal advisor should send the G–10 brochure
advisor, or investment adviser (as defined in section months proposed in the Notice of Filing, to a municipal advisory client.’’ BDA also stated
202 of the Investment Advisers Act of 1940) on that ‘‘[i]f the MSRB is committed to requiring
to provide dealers with adequate time dealers to send the investor brochure to
behalf of whom the municipal advisor undertakes
a solicitation of a municipal entity or obligated institutional investors, BDA recommends that
14 See Notice of Filing.
person, as defined in Rule 15Ba1–1(n), 17 CFR MSRB provide clarity on ‘customer’ for the
240.15Ba1–1(n), under the Act. 15 See Amendment No. 1. purposes of G–10.’’ See BDA Letter.
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![Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Notices 7901
would not expect to seek public advisor and the number of municipal authority.’’ 49 The MSRB states that it
comment on the product and problem advisory client complaints that the has determined that the degree of
codes to be used with the proposed municipal advisor receives. The MSRB flexibility the MSRB is providing with
amendments to Rule G–8.37 anticipates that smaller municipal the proposed rule change about the
advisors would have fewer clients and format of the electronic complaint log is
5. Recordkeeping
accordingly may be likely to receive preferable at this juncture.50
BDA, NAMA, PIABA, and PFM fewer complaints than larger municipal
provided comments and suggestions NAMA and PFM commented about
advisors. Further, the MSRB states that the municipal advisor record retention
about the Board’s proposed it mitigates that regulatory burden by
amendments to Rule G–8.38 Those requirements set forth in the proposed
providing flexibility as to how those
comments and suggestions related to the amendments to Rule G–9. NAMA
electronic records may be kept.45
regulatory burden caused by the commented that municipal advisor
The MSRB believes that an electronic records should be kept for five years and
proposed amendments to Rule G–8, log of complaints is necessary, and that
guidance as to certain of the terms used not six years.51 PFM commented that
such need is not lessened by the the Board lacked statutory authority to
in the electronic complaint log, and supervisory and compliance obligations
guidance as to the development of the extend the record retention period for
of municipal advisors set forth in MSRB municipal advisors for one year and
electronic complaint log itself.
Rule G–44. The standard electronic expressed ‘‘genuine concern regarding
PFM asserted that the proposed rule
change ‘‘unnecessarily impose[s] undue format required by the proposed the misalignment regarding the
encumbrances of additional brochure amendments would enhance the ability proposed MSRB Rule changes and
delivery and recordkeeping of financial regulators to conduct more current Exchange Act requirements.’’ 52
requirements.’’ 39 BDA submitted that it cost-effective and efficient inspections
and surveillance of regulated entities. After carefully considering the
did not think that this type of comments, the MSRB states that it has
‘‘complaint and recordkeeping system is MSRB Rule G–44 does not require that
records of complaints be kept in a determined that the important reasons
valuable for municipal advisory for retaining records of municipal
clients,’’ 40 and NAMA asserted that the standard electronic format across all
regulated entities. Further, the MSRB advisory client complaints for six years
recording of ‘‘actions’’ in the electronic remain valid. As discussed in the Notice
complaint log required by the proposed notes that many dealers that have been
subject to MSRB Rule G–27, on of Filing, such retention period would
amendments to Rule G–8 is not
supervision, a rule that is similar to assist other financial regulators with
necessary because of the supervisory
MSRB Rule G–44, also have been their inspections of municipal advisors
requirements set forth in MSRB Rule G–
subject to FINRA’s electronic customer (those inspections may not occur for
44.41
The MSRB states that it believes that complaint recordkeeping requirements. several years after the municipal
the burden on regulated entities from The MSRB believes that the FINRA advisory client submitted the
the proposed rule change would not be electronic customer complaint log complaint) and with their surveillance
significant.42 The proposed rule change requirements have proven useful in of municipal advisors. Further, by
would align Rule G–8 with the customer addition to general supervisory requiring that municipal advisors retain
complaint recordkeeping requirements obligations.46 records of municipal advisory client
of other financial regulators. Rule 17a– NAMA requested guidance about the complaints for six years, the MSRB
3(a)(18) under the Act 43 and FINRA meaning of certain terms to be used in states that it would be ‘‘leveling the
Rules 4513 and 4530 require the electronic complaint log.47 The playing field’’ between dealers and
information about customer complaints MSRB believes that the titles of the municipal advisors and between dealer
that is similar to what is required by the codes, as well as the brief description of municipal advisors and non-dealer
proposed rule change. The MSRB has those codes published by the Board, as municipal advisors.53 Dealers, including
stated that it would harmonize its appropriate, will provide guidance as to dealer municipal advisors, are required
product and problem codes with those the terms used with the electronic to retain records of customer complaints
required by FINRA Rule 4530.44 complaint log. Further, as discussed for six years under current Board rules.
Although the proposed rule change above under ‘‘Product and Problem The MSRB states that it disagrees with
would represent a new recordkeeping Codes,’’ the MSRB would harmonize the PFM’s assertions that the Board lacks
burden on municipal advisors, the product and problem terms used for the statutory authority to develop a record
MSRB believes that it would not be a electronic log of customer and retention period under the Act for
significant burden. The MSRB states municipal advisory client complaints municipal advisor records. The MSRB
that it is generally a good business with the codes required by FINRA Rule notes that Section 15B(b)(2)(g) of the
practice, especially for the development 4530.48 Act 54 specifically requires that the
of a regulated entity’s risk management NAMA requested guidance as to how MSRB prescribe the records that are to
systems, to track written complaints a municipal advisor should create an be made and kept by dealers and
using standard codes in an electronic electronic complaint log. The MSRB municipal advisors and to prescribe the
complaint log. Any regulatory burden notes that Proposed Supplementary length of time the records are to be kept.
imposed by the proposed rulemaking is, Material .01 broadly defines electronic The MSRB further notes that the
in part, dependent upon the municipal format to include ‘‘any computer Commission has approved as consistent
software program that is used for with the Exchange Act the MSRB’s
37 See MSRB Response Letter.
mstockstill on DSK3G9T082PROD with NOTICES
38 See
storing, organizing and/or manipulating several previous municipal advisor
BDA Letter, NAMA Letter, PIABA Letter,
PFM letter.
data that can be provided promptly
39 See PFM Letter. upon request to a regulatory 49 See Notice of Filing and Amendment No. 1.
40 See BDA Letter. 50 See MSRB Response Letter.
41 See NAMA Letter. 45 Id. 51 See NAMA Letter.
42 See MSRB Response Letter. 46 Id. 52 See PFM Letter.
43 17 CFR 240.19b–4. 47 See NAMA Letter. 53 See MSRB Response Letter.
44 See MSRB Response Letter. 48 See MSRB Response Letter. 54 15 U.S.C. 78o–4(b)(2)(g).
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![7902 Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Notices
recordkeeping proposals, including other applicable laws, rules and require the Board to seek public
select six-year retention periods.55 regulations.59 comment before submitting a
As proposed, the amendments to Rule rulemaking proposal to the
6. Annual Notifications G–10 would provide a regulated entity Commission.65 Market participants
The Commission received several with the flexibility to include the provided comment on the proposed rule
comments about the annual written annual notifications with other change, and as noted earlier, in response
notifications concerning the municipal materials. The MSRB notes that those to those comments, the Board is filing
advisor’s registration, the MSRB’s Web other materials may include the written Amendment No. 1.
site address, and availability of a disclosure of material conflicts of Further, the MSRB notes that, in this
municipal advisory client brochure interest and other information required case, not only did market participants
about the protections provided by the to be provided by a municipal advisor request the proposed rule change, but
MSRB’s rules and information about under MSRB Rule G–42(b). Because the every commenter supported the
filing a complaint with a financial proposed rule change would provide purposes of the proposed rule change.
regulator required by the proposed municipal advisors with the option to The proposed rule change would
amendments to Rule G–10 (the ‘‘annual include the annual notifications with enhance the MSRB’s ability to protect
notifications’’). Those comments the written disclosure of material and educate customers and municipal
concerned the location of those annual conflicts of interest and other advisory clients, which protections are
notifications and the ability to include information required by MSRB Rule G– vital to the Board’s mission. The
the annual notifications with other 42(b), the MSRB believes that the rule proposed rule change also would
materials. NAMA suggested that in lieu language, as proposed, provides harmonize the Board’s customer
of providing the written annual sufficient flexibility to address NAMA’s complaint rule with that of other
notifications to their municipal advisory and PFM’s suggestion that the annual financial regulators—a goal that is
clients, municipal advisors should have notifications be included with the important both to the Board and to
the option to post the annual written disclosures required under Rule market participants.66
notifications on their Web sites.56 G–42(b).60
8. Electronic Guidance
NAMA and PFM 57 suggested that the 7. Sufficiency of Comment Period
annual notifications be included with BDA commented that the MSRB’s
the written disclosure of all material BDA, NAMA, and PFM commented Notice Regarding Electronic Delivery
conflicts of interest and other that the Board did not solicit public and Receipt of Information by Brokers,
information required to be made by a comment on the proposed rule change Dealers and Municipal Securities
municipal advisor by Rule G–42(b).58 before the Board filed the proposed rule Dealers—November 20, 1998 (the ‘‘1998
The MSRB states that it has carefully change with the Commission.61 BDA Notice’’) should not apply to municipal
considered commenters’ suggestions, submitted that the MSRB is proceeding advisory relationships. BDA stated that
and has determined that a municipal with ‘‘unnecessary haste’’ and that if the ‘‘[a]s with attorney-client relationships
advisor should not have the option to MSRB issued a request for comment on . . ., municipal entities and obligated
post the annual notifications on its Web the proposed rule change, it could have persons know exactly how they prefer to
site in lieu of sending those ‘‘received feedback and tailored these communicate and there is no need for
notifications to its municipal advisory rule amendments to the activities of a Federal regulator to regulate electronic
client. The Board believes that the municipal advisors.’’ 62 NAMA communications in those
purpose of the proposed amendments is commented that the municipal advisor relationships.’’ 67
community should be afforded the same The MSRB stated that the 1998 Notice
best achieved by individual annual
opportunity to comment prior to a provides dealers with the MSRB’s
notifications to a customer or municipal
proposal being sent to the Commission interpretation about the use of
advisor client. Nonetheless, if a
that the dealer community is afforded electronic media to deliver and receive
regulated entity would like to post the
and submitted that municipal advisors information under Board rules. The
annual notifications on its Web site, in
would have flagged some of the vague proposed rule change would extend that
addition to sending the written annual
and duplicative provisions of the interpretation to municipal advisors.
notifications to its customers or
proposed rulemaking as well as use of Without that extension, some vagueness
municipal advisory clients, the
clearly inapplicable terminology.63 PFM might exist regarding municipal
regulated entity may do so as long as the
stated that it was ‘‘a bit dismayed’’ that advisors’ ability to use electronic media
information on the regulated entity’s
the MSRB did not publish a request for to deliver and receive information
Web site complies with Board and any
comment before filing the proposed rule required under Board rules.68
55 See, e.g., Exchange Act Release No. 76753 (Dec.
change with the Commission, and 9. Other Comments
23, 2015), 80 FR 81614 (Dec. 30, 2015) (approving suggested that without such a prior
Rule G–42 and amendments to Rule G–8); Exchange comment opportunity, PFM did not The other suggestions that the
Act Release No. 73415 (Oct. 23, 2014), 79 FR 64423 have ‘‘adequate opportunity for review Commission received about the
(Oct. 29, 2014) (approving Rule G–44 and and written comment.’’ 64 proposed rule change related to (i)
amendments to Rules G–8 and G–9). expansion of the proposed rule change,
56 See NAMA Letter.
The MSRB responds that the
57 See NAMA Letter, PFM Letter. Commission provided market (ii) concerns about the complaint
58 Rule G–42(b) provides, in part: ‘‘Disclosure of participants with the fulsome comment process, and (iii) concerns about the
Conflicts of Interest and Other Information. A period generally required under the economic impact of the proposed rule
mstockstill on DSK3G9T082PROD with NOTICES
municipal advisor must, prior to or upon engaging federal securities laws, which do not change on small municipal advisors.
in municipal advisory activities, provide to the PIABA supported the proposed rule
municipal entity or obligated person client full and
fair disclosure in writing of:
59 See MSRB Response Letter. change, but also suggested that the
60 Id.
(i) all material conflicts of interest . . . [and]
61 See BDA Letter, NAMA Letter, PFM Letter. 65 See MSRB Response Letter.
(ii) any legal or disciplinary event that is material
62 See BDA Letter. 66 Id.
to the client’s evaluation of the municipal advisor
63 See NAMA Letter. 67 See BDA Letter.
or the integrity of its management or advisory
personnel. . . .’’ 64 See PFM Letter. 68 See MSRB Response Letter.
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![7904 Federal Register / Vol. 82, No. 13 / Monday, January 23, 2017 / Notices
six-year record retention period Reference Room, 100 F Street NE., a municipal advisory client of a solicitor
applicable to customer complaints to Washington, DC 20549 on official municipal advisor and eliminates
municipal advisory client complaints. business days between the hours of unnecessary language.84 The MSRB
In approving the proposed rule 10:00 a.m. and 3:00 p.m. Copies of the believes other technical changes made
change, as modified by Amendment filing also will be available for serve to clarify or simplify the proposed
No.1, the Commission has also inspection and copying at the principal rule change.
considered the impact of the proposed office of the MSRB. All comments For the foregoing reasons, the
rule change on efficiency, competition, received will be posted without change; Commission finds good cause for
and capital formation.80 The the Commission does not edit personal approving the proposed rule change, as
Commission does not believe that the identifying information from modified by Amendment No. 1, on an
proposed rule change, as modified by submissions. You should submit only accelerated basis, pursuant to Section
Amendment No. 1 would impose any information that you wish to make 19(b)(2) of the Act.
burden on competition not necessary or available publicly. All submissions
VII. Conclusion
appropriate in furtherance of the should refer to File Number SR–MSRB–
purposes of the Act. 2016–15 and should be submitted on or It is therefore ordered, pursuant to
For the reasons noted above, the before February 13, 2017. Section 19(b)(2) of the Act,85 that the
Commission believes that the proposed proposed rule change, as modified by
VI. Accelerated Approval of Proposed Amendment No. 1 (SR–MSRB–2016–15)
rule change, as modified by Amendment
Rule Change as Modified by be, and hereby is, approved on an
No. 1, is consistent with the Act.
Amendment No. 1 accelerated basis.
V. Solicitation of Comments on The Commission finds good cause to
Amendment No. 1 For the Commission, pursuant to delegated
approve the proposed rule change, as authority.86
Interested persons are invited to modified by Amendment No. 1, prior to Eduardo A. Aleman,
submit written data, views, and the 30th day after the date of
Assistant Secretary.
arguments concerning Amendment No. publication of Amendment No. 1 in the
[FR Doc. 2017–01300 Filed 1–19–17; 8:45 am]
1, including whether the proposed rule Federal Register. As discussed above,
Amendment No. 1 partially amends the BILLING CODE 8011–01–P
change, as modified by Amendment
No.1, is consistent with the Act. text of the proposed rule change to
Comments may be submitted by any of provide certain clarifications relating to
the notifications that would be provided SECURITIES AND EXCHANGE
the following methods:
by municipal advisors to their COMMISSION
Electronic Comments municipal advisory clients and to the [Release No. 34–79796; File No. SR–C2–
• Use the Commission’s Internet terms used with the recordkeeping of 2017–003]
comment form (http://www.sec.gov/ municipal advisory client complaints, to
rules/sro.shtml); or extend the proposed effective date, and Self-Regulatory Organizations; C2
• Send an email to rule-comments@ to make other technical changes to Options Exchange, Incorporated;
sec.gov. Please include File Number SR– clarify or simplify rule text.81 Notice of Filing and Immediate
MSRB–2016–15 on the subject line. Specifically, the changes respond to Effectiveness of a Proposed Rule To
commenters’ concerns, are technical in Amend the Fees Schedule
Paper Comments
nature, and clarify or simplify the January 13, 2017.
• Send paper comments in triplicate proposed rule change. The MSRB states
to Secretary, Securities and Exchange Pursuant to Section 19(b)(1) of the
that Amendment No. 1 in many respects Securities Exchange Act of 1934 (the
Commission, 100 F Street NE., eliminates unnecessary language by
Washington, DC 20549. ‘‘Act’’),1 and Rule 19b–4 thereunder,2
relying on terms that are defined in the notice is hereby given that on January 3,
All submissions should refer to File MSRB’s rule book, the Act, or
Number SR–MSRB–2016–15. This file 2017, C2 Options Exchange,
Commission rules under the Act.82 In Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
number should be included on the addition, the MSRB notes that the
subject line if email is used. To help the filed with the Securities and Exchange
changes are consistent with the Commission (‘‘SEC’’ or ‘‘Commission’’)
Commission process and review your purposes of the proposed rule change to
comments more efficiently, please use the proposed rule change as described
advance the development of a in Items I, II, and III below, which Items
only one method. The Commission will comprehensive regulatory framework
post all comments on the Commission’s have been prepared by the Exchange.
for municipal advisors and to update The Commission is publishing this
Internet Web site (http://www.sec.gov/ the Board’s customer complaint rules.
rules/sro.shtml). Copies of the notice to solicit comments on the
With respect to those portions of proposed rule change from interested
submission, all subsequent Amendment No. 1 that modify certain
amendments, all written statements persons.
definitions, the MSRB notes that the
with respect to the proposed rule proposed rule change, as described in I. Self-Regulatory Organization’s
change that are filed with the the Notice of Filing, contemplated that Statement of the Terms of Substance of
Commission, and all written the clients of both solicitor and non- the Proposed Rule Change
communications relating to the solicitor municipal advisors would be The Exchange proposes to amend its
proposed rule change between the covered by the proposed rule change.83 Fees Schedule. The text of the proposed
Commission and any person, other than
mstockstill on DSK3G9T082PROD with NOTICES
According to the MSRB, the precision rule change is available on the
those that may be withheld from the added to certain definitions by Exchange’s Web site (http://
public in accordance with the Amendment No. 1 parallels the
provisions of 5 U.S.C. 552, will be precision with which the MSRB defines 84 See Amendment No. 1.
available for Web site viewing and 85 15 U.S.C. 78s(b)(2).
printing in the Commission’s Public 81 Supra note 6. 86 17 CFR 200.30–3(a)(12).
82 See Amendment No. 1. 1 15 U.S.C. 78s(b)(1).
80 15 U.S.C. 78c(f). 83 See Notice of Filing. 2 17 CFR 240.19b–4.
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Document Created: 2017-01-20 01:29:42
Document Modified: 2017-01-20 01:29:42
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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