[Federal Register Volume 78, Number 50 (Thursday, March 14, 2013)]
[Notices]
[Pages 16346-16349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05890]
[[Page 16346]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69086; File No. SR-MSRB-2013-03]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change Relating to Amendments to MSRB Form RTRS
March 8, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 1, 2013, the Municipal Securities Rulemaking Board (the
``MSRB'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the MSRB. The MSRB has
designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under
the Act,\3\ which renders the proposal effective upon receipt of this
filing by the Commission. The implementation date of the proposed rule
change will be April 15, 2013. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The MSRB is filing with the Commission a proposed rule change
consisting of amendments to MSRB Form RTRS (the ``proposed rule
change''), required in connection with the MSRB's Real-Time Transaction
Reporting System (``RTRS''). The proposed rule change simplifies or
eliminates certain data elements required to complete Form RTRS. The
MSRB is not proposing any textual changes to its rules.
The text of the proposed rule change is available on the MSRB's Web
site at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2013-Filings.aspx, at the MSRB's principal office, and at the Commission's
Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the MSRB included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The MSRB has prepared summaries, set forth in Sections
A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
As further described below, the purpose of the proposed rule change
is to amend Form RTRS (``current Form RTRS''), required to be filed by
dealers to process transactions reported under MSRB Rule G-14, by
simplifying or eliminating certain data elements relating to such
filings.
Form RTRS. The implementation of RTRS, the MSRB's facility for
real-time transaction reporting and price dissemination, was approved
by the Commission in 2004,\4\ together with related changes to Rule G-
14, on transaction reporting, and Rule G-12(f), on automated comparison
of inter-dealer transactions. The implementation of RTRS was part of
the evolution of the MSRB's efforts to improve price transparency in
the municipal securities market and provide a facility for the
dissemination of comprehensive and contemporaneous pricing data. MSRB
Rules G-14 RTRS Procedures and G-12 require brokers, dealers and
municipal securities dealers (``dealers'') to report transactions in
municipal securities within 15 minutes of the time of trade execution,
and to submit inter-dealer transactions to a central comparison system
within the same time frame. The implementation of RTRS also enhanced
the surveillance database and audit trail used by enforcement agencies.
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\4\ See Securities Exchange Act Release No. 50294 (August 31,
2004), 69 FR 54170 (September 7, 2004) (File No. SR-MSRB 2004-02).
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Subject to certain exceptions, Rule G-14 currently requires dealers
to report each purchase and sale of a municipal security to RTRS in the
manner and as prescribed by Rule G-14 RTRS Procedures and the RTRS
Users Manual. Current Form RTRS, which dealers must use to submit
information to the MSRB pursuant to Rule G-14(b)(iv), requires dealers
to provide certain information to ensure that their trade reports can
be processed accurately, including:
Type of business activities engaged in by the dealer,
including whether the dealer engages in reportable trade activity or
acts as a broker's broker;
Identifiers used for reporting purposes, including
effecting broker symbol(s) (also known as ``MPIDs'') assigned by
NASDAQ, and participant identifier(s) assigned by the National
Securities Clearing Corporation (``NSCC'');
Identity of dealer staff to be contacted, including staff
to be contacted for issues concerning quality of trade data
submissions; staff to be contacted for issues concerning initial
testing; if so elected by the dealer, staff to be allowed access to
RTRS Web; and staff to be contacted for issues concerning technical
problems in computer-to-computer data submissions;
Trade submission relationships, including identity of
other dealers submitting on behalf of the dealer submitting current
Form RTRS; whether the dealer will be submitting transactions on its
own behalf, and/or submitting trade reports on behalf of others; and
identity of any non-dealer organizations submitting transactions on
behalf of the dealer;
Error monitoring processes, including the type of feedback
(and related contact information) selected by the dealer to comply with
Rule G-14 RTRS Procedures section (a)(v);
Testing information, including information necessary to
determine the type of testing required during the start-up and
transition phase to RTRS; and
Filing information, including certification of accuracy,
name and CRD number of the dealer/the individual filing current Form
RTRS on behalf of the dealer and date of filing.
Current Form RTRS must be completed and submitted electronically.
Dealers are also required to notify the MSRB when the information on
current Form RTRS changes.
Since originally designed, certain elements of current Form RTRS
have become obsolete. First, there is no longer any need to collect the
same testing information as was needed during the start-up phase of
RTRS in 2004. In addition, reengineering current Form RTRS creates
opportunities to improve the ease of use and align RTRS data collection
technologically with the MSRB's Long-Range Plan for Market Transparency
Products by improving
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data quality, consistency and correction processes.\5\
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\5\ The MSRB Long-Range Plan for Market Transparency Products is
available on www.msrb.org.
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Summary of proposed rule change. As noted above, the proposed rule
change amends current Form RTRS by simplifying or eliminating certain
information currently required from dealers to process transactions
required to be reported under MSRB Rule G-14. The proposed rule change
does not include any changes to Rule G-14. Revised Form RTRS (``revised
Form RTRS'') will be required to be submitted by dealers only in
electronic form, as is the case with current Form RTRS. The proposed
rule change (i) modifies the account management function for RTRS web
users; (ii) allows certain information from the filer's MSRB Gateway
system \6\ account to pre-populate certain sections of revised Form
RTRS; (iii) improves the ability to identify and distinguish trades
reported by dealers trading in multiple capacities; (iv) removes
elements of the current Form RTRS relating to start-up testing,
including the requirement to identify a dealer's contacts for initial
testing of its RTRS interface; and (v) corrects or eliminates minor
obsolete elements in current Form RTRS.
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\6\ MSRB Gateway is the single, secure access point for all MSRB
market transparency submission services, applications and associated
forms. Specific functions users can perform in Gateway include: (1)
Set up secure, password-protected accounts; (2) manage organization
and user account details; (3) access certain forms used for MSRB
submission services, such as Form RTRS; and (4) manage agent
designations.
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The proposed rule change moves the management of RTRS Web user
accounts from current Form RTRS into existing account management
functions in the MSRB Gateway system, as well as eliminates the
requirement to identify a testing contact. Identification of
individuals necessary for data quality and technical issues is
retained. The incorporation of RTRS Web account management into the
MSRB Gateway system brings that system into conformance with other
similar systems, such as SHORT Web and EMMA Dataport.\7\
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\7\ SHORT Web and EMMA Dataport are user interfaces used by
dealer staff to submit data and document information pursuant to
MSRB Rules G-32 and G-34.
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Current Form RTRS requires dealers to indicate whether they are
acting as broker's brokers, but does not enable dealers acting in both
a broker's broker and non-broker's broker capacity to indicate both
roles. As a result, all trades are processed identically. Revised Form
RTRS adds the functionality for dealers acting in both capacities to
specify a separate symbol for trades done in each capacity.\8\ The
proposed rule change revises Form RTRS, but does not impose any new
trade reporting obligations, and any such changes will be addressed in
separate rulemaking proceedings.
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\8\ This feature is managed in the Trade Reporting Identifiers
section by the use of the ``+ Add New Symbol'' function.
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Other changes include removing certain obsolete information. The
attachment section to current Form RTRS (``Start-Up Testing'') contains
provisions relating to preparations for the launch of RTRS in 2004.
Since such information is now obsolete, the proposed rule change
eliminates the data collected in the attachment entirely. Other
information not used or necessary to administer the RTRS program
includes, among other things, certain details about a dealer's
designated contacts, and information about transactions submitted by a
dealer on behalf of others, as further described below. Finally several
minor details in the Form (such as department names and the MSRB
address) are corrected or eliminated.
Revised Form RTRS is attached as Exhibit 3. Revised Form RTRS
requests information organized in four categories: Business Activities,
Trade Reporting Identifiers, Designated Contacts and Submission and
Feedback. As noted above, while the format of Form RTRS has changed,
much of the information previously required from dealers remains the
same. Following is a description of the data required on current Form
RTRS and the treatment of such data on revised Form RTRS.
Revisions to Current Form RTRS
Section A General Information
Section A1 of current Form RTRS requests the following Company
Identifier elements:
Company MSRB number: This data will be pre-populated when
logging in to Form RTRS through a filer's Gateway account and will not
be submitted through revised Form RTRS.
Company name: This data will be pre-populated when logging
in to Form RTRS through a filer's Gateway account and will not be
submitted through revised Form RTRS.
NASD \9\Assigned Effecting Broker Symbol: This data
element has been retained but will now be relocated to Trade Reporting
Identifiers.
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\9\ Now NASDAQ.
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CRD number: This data will be pre-populated when logging
in to Form RTRS through a filer's Gateway account and will not be
submitted through revised Form RTRS.
SEC number: This data will be pre-populated when logging
in to Form RTRS through a filer's Gateway account and will not be
submitted through revised Form RTRS.
NSCC Participant ID: This data element has been retained
but will now be relocated to Trade Reporting Identifiers.
Section A2 of the current Form RTRS requests information concerning
the applicability of MSRB Rule G-14 to the filer's transactions, and
directs the filer to chose the applicable class of transactions from a
checklist. This checklist has been relocated to Business Activities and
now allows the filer to choose more than one applicable class of
transactions.
Section B Contacts
Sections B1 and B2 of current Form RTRS request the following
identical information about the Form Contact and Additional Contacts:
Name: This data will be pre-populated from the designated
contact's Gateway account and will be relocated to Designated Contacts.
Title; Dept.; and Business Address: Business Address data
has been deleted because it is otherwise available through the filer's
Gateway account. The Title and Dept. data, although also available
through the filer's Gateway account, has been deleted because it is no
longer necessary to administer the RTRS program.
Phone: This data will be pre-populated from the designated
contact's Gateway account and will be relocated to Designated Contacts.
Fax: This data has been deleted because although otherwise
available through the filer's Gateway account, it is not used.
Email address: This data will be pre-populated from the
designated contact's Gateway account and will be relocated to
Designated Contacts.
CRD No.: This data has been deleted because it is no
longer necessary to administer the RTRS program.
Data Quality: Designation of primary and secondary
contacts will be retained but will be relocated in Designated Contacts.
RTRS Web Access: These designations have been deleted
because they are now managed outside of Form RTRS.
Technical Support: Designation of contact will be retained
but will be relocated in Designated Contacts.
Email recipient: This designation for error feedback has
been retained but the email address for such person will
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be relocated in Trade Reporting Identifiers and associated with a
particular EBS symbol.
Testing: This designation has been deleted because it is
obsolete.
Section C Dealer Relationships
Section C1 requests information about a reporting agent, if
applicable, submitting on behalf of the filer:
Indication, if applicable, if a dealer is reporting
transactions on filer's behalf: This data will be retained but will be
relocated to Submission and Feedback.
Company name of reporting agent: This data will be
retained but will be relocated to Submission and Feedback.
Reporting Agent's NSCC Participant ID: This data will be
retained but will be relocated to Submission and Feedback.
Section C2 requests information about any transactions submitted by
the filer on its own behalf or on behalf of others:
Indication, if applicable, that filer will submit its own
transactions: this data will be retained but will be relocated to
Submission and Feedback.
Indication, if applicable, that filer will submit
transactions for other dealers: This designation has been deleted
because it is no longer necessary to administer the RTRS program.
Indication, if applicable, that filer is an NSCC
Participant: This data will be retained but will be relocated to
Business Activities.
Indication, if applicable, that filer will require an MSRB
assigned submitter number: This designation has been deleted because it
is obsolete.
Section C3 requests information concerning the filer's activities
as a broker's broker:
Indication, if applicable, that filer acts as a broker's
broker: This data will be retained but will be relocated to Business
Activities.
Section D Other Data
Section D1 Error Feedback: This section requests information about
the error feedback method selected by the filer and directs the filer
to choose one or more applicable methods from a checklist. This
checklist has been retained but will be relocated to Submission and
Feedback.
Section D2 Service Bureau: This section requests the identity of
any non-dealer organization employed by the filer to submit
transactions on its behalf. This data has been deleted because it is no
longer necessary to administer the RTRS program.
Section E Signature
This section requests information about the municipal securities
principal or executive officer executing the current Form RTRS,
including name, designation as a municipal securities principal or
executive officer, a certification that the information provided in the
Form is accurate and complete, and a signature and date of execution.
This section has been deleted because the information, other than the
certification, is currently required as part of the information
submitted under MSRB Rule G-40. A certification that the information
submitted is accurate and complete will be automatically included on
each submission of information or change thereto to revised Form RTRS.
Attachment Start-Up Testing
Sections ATT1 and ATT2: These sections requested certain
information, relevant in 2004, about the types of trades being
submitted and the filer's testing schedule. These sections have been
deleted because the data is obsolete.
New Information Required by Revised Form RTRS
As noted above, the information requested in revised Form RTRS has
been organized in four categories: Business Activities, Trade Reporting
Identifiers, Designated Contacts and Submission and Feedback. Each of
the sections will contain data transferred from current Form RTRS as
described above. Some sections will request new information, as
described below.
Following log-in through the filer's Gateway account, each
submitter will be required to either affirm or edit previously
submitted information for each of the categories listed above. In
addition, the following sections will request new information:
Business Activities
This section includes certain data from current Form RTRS and
allows the filer to identify one or more types of transactions engaged
in by the filer, including transactions as a broker's broker. Current
Form RTRS limited the number of types of transactions that could be
designated.
Trade Reporting Identifiers
This section includes certain data from current Form RTRS and adds
identifiers, if applicable, for broker's brokers transactions.
The MSRB anticipates that use of revised Form RTRS will reduce
total Form RTRS filings significantly, reducing the regulatory burden
on dealers and lowering MSRB operational costs. New tools developed
since 2004 allow dealers to easily and effectively manage staff access
to MSRB market transparency submission systems using the MSRB Gateway
system. Using current Form RTRS to manage staff access to RTRS Web,
instead of the MSRB Gateway account management tools, creates
unnecessary form filings.\10\ Further, the design of revised Form RTRS
reflects current practices in user interface design, including
contextual help, printable output, and other improvements. Revised Form
RTRS will continue to be available, however, only to authorized
individuals in a secure, password protected manner.
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\10\ An internal study of filings showed that a majority of
current Form RTRS filings are made solely for the purpose of
managing RTRS Web user accounts.
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2. Statutory Basis
The MSRB believes that the proposed rule change is consistent with
Section 15B(b)(2)(C) of the Act,\11\ which provides that the MSRB's
rules shall:
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\11\ 15 U.S.C. 78o-4(b)(2)(C).
be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect
to, and facilitating transactions in municipal securities and
municipal financial products, to remove impediments to and perfect
the mechanism of a free and open market in municipal securities and
municipal financial products, and, in general, to protect investors,
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municipal entities, obligated persons, and the public interest.
The MSRB believes that the proposed rule change is consistent with
the Act because it will facilitate transactions in municipal securities
and remove impediments to and perfect the mechanism of a free and open
market. The proposed rule change will be a step in advancing the MSRB's
long term policy of improving price transparency. Further,
implementation of revised Form RTRS will improve compliance with the
MSRB's requirements for real-time reporting by allowing dealers to
submit information necessary to process trades in a more efficient and
timely manner, and reduce steps necessary to make post-filing changes,
thereby decreasing the likelihood of reporting failures resulting from
inaccurate processing of information, and improving the efficient
working of RTRS. In addition, the proposed rule change adds new
functionalities to allow dealers to separately identify trades when
acting as a broker's broker.
B. Self-Regulatory Organization's Statement on Burden on Competition
The MSRB does not believe that the proposed rule change will impose
any burden on competition not necessary or
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appropriate in furtherance of the purposes of the Act. The proposed
rule change will not impose any additional burden on dealers because it
will not require dealers to obtain or submit additional information to
fulfill the requirements of the proposed rule change. Further, the MSRB
believes that the proposed rule change will reduce the regulatory
burden on dealers by providing a streamlined facility for entering
information necessary to process trades correctly and by reducing the
necessity for post-filing amendments.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \12\ and
Rule 19b-4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-MSRB-2013-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-MSRB-2013-03. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet 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 such 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-2013-03, and should be
submitted on or before April 4, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-05890 Filed 3-13-13; 8:45 am]
BILLING CODE 8011-01-P