[Federal Register Volume 79, Number 51 (Monday, March 17, 2014)]
[Notices]
[Pages 14769-14772]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-05754]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71690; File No. SR-MSRB-2014-02]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change Consisting of Changes to the MSRB's Electronic Municipal Market
Access System, Real-Time Transaction Reporting System, and Short-Term
Obligation Rate Transparency System
March 11, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the
[[Page 14770]]
``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 28, 2014, the Municipal Securities Rulemaking Board (the
``MSRB'' or ``Board'') filed with the Securities and Exchange
Commission (the ``SEC'' or ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the MSRB. The MSRB has designated the proposed rule change as
changing fees imposed by the MSRB under Section 19(b)(3)(A)(ii) of 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 1, 2014. 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\ 15 U.S.C. 78s(b)(3)(A)(ii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The MSRB is filing with the Commission a proposed rule change
relating to the MSRB's Electronic Municipal Market Access system
(``EMMA''), Real-time Transaction Reporting System (``RTRS''), and
Short-Term Obligation Rate Transparency System (``SHORT System'') (the
``proposed rule change''). The proposed rule change consists of (i) fee
increases for the MSRB's Real-Time Transaction Data Subscription
Service, Comprehensive Transaction Data Subscription Service, and SHORT
System subscription service; (ii) revisions to the EMMA, RTRS, and the
SHORT System facilities language to clarify or otherwise provide that
the MSRB may waive fees for these subscription services for non-profit
organizations (including institutions of higher education) and for
organizations providing, at no out-of-pocket charge to the MSRB,
services or products to the MSRB for internal or public use or
dissemination on EMMA on terms agreeable to the MSRB; (iii) revisions
to the EMMA Continuing Disclosure Service facilities language to
clarify that a Nationally Recognized Statistical Rating Organization
(``NRSRO'') for which such service or product fees are waived could,
nevertheless, be treated as having agreed to provide credit rating and
related information to the MSRB on terms that qualify for the display
of that information on EMMA; and (iv) revisions to the RTRS Historical
Transaction Data Product facilities language to clarify that the
purchase price of the product does not include sales tax, as required
by Virginia state law, in order to harmonize the language for that
product with the existing language of the EMMA, SHORT, and other RTRS
facilities.
The text of the proposed rule change is available on the MSRB's Web
site at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2014-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
RTRS is a facility for the collection and dissemination of
information about transactions occurring in the municipal securities
market. RTRS and its Real-Time Transaction Data Subscription Service
provide a real-time stream of data representing municipal securities
transaction reports made by brokers, dealers, and municipal securities
dealers to RTRS for an annual subscription fee of $10,000.\4\ The MSRB
proposes to increase the annual subscription fee for the Real-Time
Transaction Data Subscription Service from $10,000 to $11,000,
effective April 1, 2014.
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\4\ See Securities Exchange Act Release No. 63340 (Nov. 18,
2010), 75 FR 72850 (Nov. 26, 2010), File No. SR-MSRB-2010-09.
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Another component of RTRS is the MSRB Comprehensive Transaction
Data Subscription Service (the ``Comprehensive Service''), which
consists of three trade reports: Transaction data one business day
after the trade (T+1), transaction data five business days after the
trade (T+5), and transaction data 20 business days after the trade
(T+20). The MSRB proposes to increase the annual subscription fee for
the Comprehensive Service from $5,000 to $5,500, effective April 1,
2014.
The SHORT System is a facility of the MSRB for the collection and
dissemination of information about securities bearing interest at
short-term rates. Currently, these securities consist of auction rate
securities and variable-rate demand obligations. The MSRB makes the
information and documents collected by the SHORT System available
through a subscription service, which is available for an annual fee of
$10,000.\5\ The MSRB proposes to increase the annual subscription fee
for the SHORT System subscription service from $10,000 to $11,000,
effective April 1, 2014.
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\5\ The SHORT System subscription service became effective
September 30, 2010. See Securities Exchange Act Release No. 62993
(Sept. 24, 2010), 75 FR 60488 (Sept. 30, 2010), File No. SR-MSRB-
2010-06.
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The MSRB has not increased the cost of either the Real-Time
Transaction Data Subscription Service or the Comprehensive Service
since January 2011, and has not increased the cost of the SHORT System
subscription service since its inception in 2010. The SEC and Congress,
as noted below, have recognized the need for the MSRB to charge
commercially reasonable fees for automated subscription-based feeds.
Currently, the Real-Time Transaction Data Subscription Service
generates revenue of approximately $540,000 annually, the Comprehensive
Service generates revenue of approximately $185,000 annually, and the
SHORT System subscription service generates revenue of approximately
$120,000 annually. The MSRB believes that incremental increases under
the proposed rule change are commercially reasonable and notes that,
even with the proposed increases, such fees would cover only a portion
of the RTRS and SHORT System operating costs.
The MSRB proposes to revise the EMMA, RTRS, and the SHORT System
facilities language to clarify, add to and harmonize the provisions
pertaining to the waiver of fees for subscription services or products
for non-profit organizations (including institutions of higher
education) and for organizations providing, at no out-of-pocket charge
to the MSRB, services or products to the MSRB for internal or public
use or dissemination on EMMA on terms agreeable to the MSRB. Currently,
the facilities language for most of the products and services provides
that the MSRB can, in its discretion, waive certain fees for non-profit
organizations, but the effectuating language is inconsistent across the
facilities.
The MSRB believes that waivers of fees are potentially appropriate
for non-profit organizations and organizations
[[Page 14771]]
that provide, at no out-of-pocket charge, services or products to the
MSRB for its internal or public use or dissemination on EMMA. Non-
profit organizations generally have a charitable or otherwise public
purpose, and the MSRB likewise has a public purpose. In addition, the
ability to waive fees can facilitate the MSRB's receipt of services or
products at no out-of-pocket charge to be used by the MSRB to advance
its public mission. This waiver ability is consistent with the policy
already embodied in the existing facilities language on the MSRB's
granting of waivers. The proposed rule change would clarify, add to and
conform the facilities language consistent with this view. Further, the
MSRB proposes an amendment to the EMMA Continuing Disclosure Service to
clarify that an NRSRO can be treated, notwithstanding the MSRB
providing access to such NRSRO to any of the MSRB's subscription
products or services at either a reduced or no charge, as agreeing to
provide credit rating and related information to the MSRB on terms that
qualify for the display of that information on EMMA.
The MSRB also proposes to revise the RTRS Historical Transaction
Data Product facilities language to include language pertaining to the
purchase price in order to harmonize the RTRS Historical Transaction
Data Product facility with the existing language of the EMMA, SHORT,
and other RTRS facilities. Currently, the EMMA, SHORT, and other RTRS
facilities provide that the purchase price of a product does not
include sales tax, as required by Virginia state law, and that the
purchase price is a one-time charge for each facility and will not
include any future additions for enhancements that may be added to the
data for each facility. The proposed rule change would add this
provision to the RTRS Historical Transaction Data Product facility in
conformity with the other analogous facilities.
2. Statutory Basis
The MSRB believes that the proposed rule change is consistent with
Section 15B(b)(2)(J) of the Securities Exchange Act of 1934 (the
``Act''),\6\ which requires, in pertinent part, that the Board's rules
shall ``provide that each municipal securities broker, municipal
securities dealer, and municipal advisor shall pay to the Board such
reasonable fees and charges as may be necessary or appropriate to
defray the costs and expenses of operating and administering the
Board.'' The proposed rule change provides for reasonable fees to
partially offset costs associated with operating and administering the
Board, including operating RTRS and the SHORT System and producing and
disseminating transaction reports to subscribers.
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\6\ 15 U.S.C. 78o-4(b)(2)(J).
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The MSRB also believes that the proposed rule change is consistent
with Section 15B(b)(3)(B)(ii) of the Act,\7\ which provides that the
MSRB ``shall not be prohibited from charging commercially reasonable
fees for automated subscription-based feeds or similar services, or for
charging for other data or document-based services customized upon
request of any person, made available to commercial enterprises,
municipal securities market professionals, or the general public,
whether delivered through the Internet or any other means, that contain
all or part of the documents or information, subject to approval of the
fees by the Commission under Section 19(b)'' of the Act.\8\ Implicit
within the authority to charge fees, is the ability to waive fees.
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\7\ 15 U.S.C. 78o-4(b)(3)(B)(ii).
\8\ See Securities Exchange Act Release No. 66866 (Apr. 26,
2012), 77 FR 26063 (May 2, 2012), File No. SR-MSRB-2012-02;
Securities Exchange Act Release No. 66865 (Apr. 26, 2012), 77 FR
26061 (May 2, 2012), File No. SR-MSRB-2012-03.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The MSRB does not believe that the proposed rule change would
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The fee increases would apply
equally to all market participants that choose to subscribe to the
services (unless waived by the MSRB), and those who choose not to
subscribe may view the same information for free on the EMMA web
portal.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act and paragraph (f) of Rule 19b-4 thereunder.
At any time within 60 days of the filing of the proposed rule change,
the Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
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-2014-02 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.
All submissions should refer to File Number SR-MSRB-2014-02. 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-2014-02 and should be
submitted on or before April 7, 2014.
[[Page 14772]]
For the Commission, pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-05754 Filed 3-14-14; 8:45 am]
BILLING CODE 8011-01-P