[Federal Register Volume 60, Number 90 (Wednesday, May 10, 1995)]
[Notices]
[Pages 24948-24950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11517]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35674; File No. SR-MSRB-95-05]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change Modifying The Applicable Time Frames for Customer Account
Transfers
May 4, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on march 31, 1995, the
Municipal Securities Rulemaking Board (``MSRB'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change (File No. SR-MSRB-95-5) as described in Items I, II, and III
below, which items have been prepared primarily by the MSRB. The
Commission is publishing this notice to [[Page 24949]] solicit comments
on the proposed rule change from interested persons.
\1\15 U.S.C. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the proposed rule is to modify MSRB Rule G-26
regarding customer account transfers to require that a dealer carrying
a customer account in municipal securities validate and return customer
account transfer instructions to the dealer designated to receive the
account within three business days and that the dealer carrying the
account complete the transfer of the account within four business days
after validation of the transfer instructions.
The proposed rule change supports the movement of the securities
industry to three-day settlement in June 1995 and parallels recent
amendments to the customer account transfer rules of the New York Stock
Exchange (``NYSE'')\2\ and the National Association of Securities
Dealers (``NASD'').\3\ Recent enhancements also were made to the
Automated Customer Account Transfer System operated by National
Securities Clearing Corporation (``NSCC'') accelerating the time in
which an account can be transferred.\4\ The proposed rule change is
consistent with those enhancements. The MSRB requests that the
Commission set the effective date for thirty days after filing.
\2\For a description of the NYSE's amendments to its customer
account transfer rules, refer to Securities Exchange Act Release No.
34633 (September 2, 1994), 59 FR 46872 [File No. SR-NYSE-94-21]
(approving proposed rule change).
\3\For a description of the NASD's amendments to its customer
account transfer rules, refer to Securities Exchange Act Release No.
35031 (November 30, 1994), 59 FR 62761 [File No. SR-NASD-94-56]
(granting partial accelerated approval of proposed rule change).
\4\For a description of the NSCC's enhancements to its customer
account transfer system, refer to Securities Exchange Act Release
No. 34879 (October 21, 1994), 59 FR 54229 [File No. SR-NSCC-94-13]
(approving proposed rule change).
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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 that 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.\5\
\5\The Commission has modified the text of the summaries
prepared by MSRB.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In October 1993, the Commission adopted Rule 15c6-1\6\ under the
Act which establishes three business days after the trade date
(``T+3''), instead of five business days (``T+5''), as the standard
settlement cycle for most securities transactions.\7\ The rule will
become effective June 7, 1995.\8\ Although municipal securities were
not included within the scope of Rule 15c6-1, the Commission asked the
Board to undertake a commitment to T+3 settlement for the municipal
securities industry.\9\
\6\17 CFR 240.15c6-1.
\7\Securities Exchange Act Release No. 33023 (October 6, 1993),
58 FR 52891 (adoption of Rule 15c6-1).
\8\Securities Exchange Act Release No. 34952 (November 9, 1994,
59 FR 59137 (changing effective date from June 1, 1995 to June 7,
1995).
\9\Securities Exchange Act Release No. 33023 (October 6, 1993),
58 FR 52891 (adoption of Rule 15c6-1).
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On February 28, 1995, the Commission approved amendments to MSRB
rules G-12 on uniform practice and rule G-15 on confirmation,
clearance, and settlement of transactions with customers redefining
regular-way settlement as three business days.\10\ In addition, the
MSRB has been reviewing its rules to determine if there are other
appropriate changes to its rules that need to be made to facilitate the
movement to T+3 settlement. The current proposed amendment to rule G-26
has been identified as such a necessary change.
\10\Securities Exchange Act Release No. 35427 (February 28,
1995, 60 FR 12798 [File No. SR-MSRB-94-10] (approving proposed rule
change).
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The proposed rule change would require that a dealer carrying a
customer account in municipal securities validate and return customer
account transfer instructions to the dealer designated to receive the
account within three business days following receipt of the transfer
instructions. The rule currently allows five business days for this to
occur. In addition, the dealer carrying the account would be required
to complete the transfer of the account within four business days
following validation of the transfer instructions in lieu of five
business days as is currently stated in the rule.
As set forth in Section 15B(b)(2)(C)\11\ of the Act, the MSRB has
the authority to adopt rules to foster cooperation with persons engaged
in regulating, clearing, settling, processing information with respect
to, and facilitating transactions in municipal securities. The MSRB
believes the proposed rule change is consistent with Section
15B(b)(2)(C) because the proposal promotes uniformity with the customer
account transfer procedures of the other self-regulatory organizations
thereby providing greater efficiency in the transfer of customer
accounts.
\11\15 U.S.C. 78o-4(b)(2)(C).
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(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 appropriate in furtherance
of the purposes of the Act.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
The MSRB has neither solicited nor received comments 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: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
(3) was provided to the Commission for its review at least five days
prior to the filing date; and (4) does not become operative for thirty
days from the date of its filing on March 31, 1995, the proposed rule
change has become effective pursuant to Section 19(b)(3)(A) of the Act
and Rule 19b-4(e)(6) thereunder. In particular, the Commission believes
the proposal would qualify as a ``non-controversial filing'' in that
the proposed standards do not significantly affect the protection of
investors or the public interest and do not impose any significant
burden on competition. At any time within sixty days of the filing of
the proposed rule change, the Commission may summarily abrogate 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. Persons making written submissions
should file six copies thereof with the [[Page 24950]] Secretary,
Securities and Exchange Commission, 450 Fifth Street NW., Washington,
DC 20549. 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 inspection and
copying in the Commission's Public Reference Room, 450 Fifth Street
NW., Washington, DC 20549. Copies of such filing will also be available
for inspection and copying at the principal office of the MSRB. All
submissions should refer to the file number SR-MSRB-95-05 and should be
submitted by May 31, 1995.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\12\
\12\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-11517 Filed 5-9-95; 8:45 am]
BILLING CODE 8010-01-M