[Federal Register Volume 82, Number 147 (Wednesday, August 2, 2017)]
[Notices]
[Pages 36039-36046]
[FR Doc No: 2017-16213]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81233; File No. SR-MSRB-2017-03]

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, Consisting of Proposed Amendments to MSRB Rule G-26,
on Customer Account Transfers, To Modernize the Rule and Promote a
Uniform Customer Account Transfer Standard

July 27, 2017.

I. Introduction

    On May 26, 2017, 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 proposed
amendments to MSRB Rule G-26, on customer account transfers, to
modernize the rule and promote a uniform customer account transfer
standard for all brokers, dealers, municipal securities brokers and
municipal securities dealers (collectively, ``dealers'') (the
``proposed rule change''). The proposed rule change was published for
comment in the Federal Register on June 14, 2017.\3\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 80890 (June 7, 2017)
(the ``Notice of Filing''), 82 FR 27307 (June 14, 2017).
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    The Commission received two comment letters on the proposed rule
change.\4\ On July 20, 2017, the MSRB responded to those comments \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 parties
and is approving the proposed rule change, as modified by Amendment No.
1, on an accelerated basis.
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    \4\ See Letter to Secretary, Commission, from Mike Nicholas,
Chief Executive Officer, Bond Dealers of America (``BDA''), dated
July 5, 2017 (the ``BDA Letter''); and, Letter to Secretary,
Commission, from Leslie M. Norwood, Managing Director and Associate
General Counsel, Securities Industry and Financial Markets
Association (``SIFMA''), dated July 5, 2017 (the ``SIFMA Letter'').
    \5\ See Letter to Secretary, Commission, from Carl E. Tugberk,
Assistant General Counsel, MSRB, dated July 20, 2017 (the ``MSRB
Response Letter''), available at https://www.sec.gov/comments/sr-msrb-2017-03/msrb201703-1871538-156223.pdf.
    \6\ Id. In Amendment No. 1, the MSRB proposed to amend the
requested implementation date to provide for a longer implementation
period and later effective date by proposing an effective date six
months from the date of Commission approval rather than three
months.
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II. Description of Proposed Rule Change

    In the Notice of Filing, the MSRB stated that the purpose of the
proposed rule change is to modernize Rule G-26 and promote a uniform
customer account transfer standard for all dealers.\7\ The MSRB stated
that it believes that, by including certain provisions parallel to the
customer account transfer rules of other SROs, particularly FINRA Rule
11870, in current Rule G-26, the transfer of customer securities
account assets will be more flexible, less burdensome, and more
efficient, while reducing confusion and risk to investors and allowing
them to better move their municipal securities to their dealer of
choice.\8\
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    \7\ See Notice of Filing.
    \8\ Id.
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    As further described by the MSRB in the Notice of Filing, Rule G-26
requires dealers to cooperate in the transfer of customer accounts and
specifies procedures for carrying out the transfer process.\9\
According to the MSRB, such transfers occur when a customer decides to
transfer an account from one dealer, the carrying party (i.e., the
dealer from which the customer is requesting the account be
transferred) to another, the receiving party (i.e., the dealer to which
the customer is requesting the account be transferred).\10\ Moreover,
Rule G-26 currently establishes specific time frames within which the
carrying party is required to transfer a customer account; limits the
reasons for which a receiving party may take exception to an account
transfer instruction; provides for the establishment of fail-to-receive
and fail-to-deliver contracts; \11\ and requires that fail contracts be
resolved in accordance with MSRB close-out procedures, established by
MSRB Rule G-12(h).\12\ In addition, current Rule G-26 requires the use
of the automated customer account transfer service in place at a
registered clearing agency registered with the Commission when both
dealers are direct participants in the same clearing agency.\13\
Finally, the rule contains a provision for enhancing compliance by
requiring submission of transfer instructions to the enforcement
authority with jurisdiction over the dealer carrying the account, if
the enforcement authority requests such submission.\14\
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    \9\ Id.
    \10\ Id.
    \11\ The MSRB stated that fail-to-receive and fail-to-deliver
contracts are records maintained by the receiving party and the
carrying party, respectively, when a customer account transfer
fails. See Notice of Filing.
    \12\ See Notice of Filing.
    \13\ See Rule G-26(h).
    \14\ See Rule G-26(i).
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    As discussed in the Notice of Filing, the MSRB adopted Rule G-26 in
1986 as part of an industry-wide initiative to create a uniform
customer account transfer standard by applying a customer account
transfer procedure to all dealers that are engaged in municipal
securities activities.\15\ The uniform standard for all customer
account transfers (i.e., automated and manual processes) is largely
driven by the National Securities Clearing Corporation's (``NSCC'')
Automated Customer Account Transfer Service (``ACATS'').\16\ The MSRB
stated that it adopted Rule G-26 in conjunction with the adoption of
similar rules by other self-regulatory organizations (``SROs'')--New
York Stock Exchange (``NYSE'') Rule 412 and Financial Industry
Regulatory Authority (``FINRA'') Rule 11870.\17\ The MSRB stated that
those rules are not applicable to certain accounts at dealers,
particularly municipal security-only accounts and accounts at bank
dealers.\18\ Current Rule G-26 governs the municipal security-only
customer account transfers performed by those dealers to ensure that
all customer account transfers are subject to regulation that is
consistent with the uniform industry standard. Thus, the MSRB noted, in
order to maintain consistency and the uniform standard, the MSRB has,
from time to time, modified the requirements of Rule G-26 to conform to
certain provisions of the parallel FINRA and NYSE customer account
transfer rules, as well as to enhancements made to the ACATS process by
NSCC, that had relevance to municipal securities.\19\
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    \15\ See Notice of Filing.
    \16\ Id.
    \17\ Id.
    \18\ Id.
    \19\ Id.
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Residual Credit Positions

    The MSRB has proposed to update Rule G-26 to include the transfer
of

customer account residual credit positions.\20\ The MSRB noted that in
1989 the NSCC expanded ACATS to include the transfer of customer
account residual credit positions. These are assets in the form of cash
or securities that can result from dividends, interest payments or
other types of assets received by the carrying party after the transfer
process is completed, or which were restricted from being included in
the original transfer.\21\ The MSRB noted that the NYSE and FINRA made
corresponding changes to their rules that require dealers that
participate in a registered clearing agency with automated residual
credit processing capabilities to utilize those facilities to transfer
residual credit positions that accrue to an account after a
transfer.\22\ Prior to allowing for these transfers, a check frequently
would have to be produced, or a delivery bill or report, which then
required a check to be issued or securities to be transferred.\23\ The
MSRB stated that this process could result in lost or improperly routed
checks and securities, as well as the expenses of postage and
processing.\24\ According to the MSRB, the proposed amendments to Rule
G-26(k)(ii) would benefit both customers and dealers by substantially
decreasing the paperwork, risks, inefficiencies and costs associated
with the practice of check issuance and initiation of securities
deliveries to resolve residual credit positions.\25\
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    \20\ See Notice of Filing and proposed Rule G-26(k)(ii).
    \21\ See Notice of Filing.
    \22\ Id.
    \23\ Id.
    \24\ Id.
    \25\ Id.
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Partial Account Transfers

    The MSRB has proposed to update Rule G-26 to permit partial account
transfers under the same time frames applicable to transfers of entire
accounts, which the MSRB believes would provide dealers with the
ability to facilitate more efficient and expeditious transfers, as well
as increase accountability for dealers and reduce difficulties
encountered by customers related to transfers.\26\ The proposed rule
change would require that dealers expedite all authorized municipal
securities account asset transfers, whether through ACATS or via other
means permissible, and coordinate their activities with respect
thereto. The MSRB stated that this proposed change would further
competition among dealers by more easily allowing investors to transfer
their municipal securities to the dealer of their choice.\27\ The MSRB
noted that in 1994, the NYSE and FINRA amended their rules to permit
partial or non-standard customer account transfers (i.e., the transfer
of specifically designated assets from an account held at one dealer to
an account held at another dealer).\28\ The MSRB further noted that in
2004, the NYSE and FINRA further amended their rules generally to apply
the same procedural standards and time frames that are applicable to
the transfer of entire accounts to partial transfers as well.\29\
According to the MSRB, because customer and dealer obligations
resulting from the transfer of an entire account differ from the
obligations arising from the transfer of specified assets within an
account that will remain active at the carrying party, the NYSE and
FINRA rules distinguish between the transfer of security account assets
in whole or in specifically designated part.\30\ The MSRB stated that,
as an example, it would not be necessary for a customer to instruct the
carrying party as to the disposition of his or her assets that are
nontransferable if the customer is not transferring the entire
account.\31\
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    \26\ See Notice of Filing and proposed Rule G-26(b), (c)(ii),
(d)(i), (e)(ii), (k)(i).
    \27\ See Notice of Filing.
    \28\ Id.
    \29\ Id.
    \30\ Id.
    \31\ Id.
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Transfer of Third-Party and/or Proprietary Products

    The MSRB stated that the proposed rule change would amend Rule G-26
to be consistent with the NSCC's Rule 50 regarding the transfer of
third-party and/or proprietary products that the receiving party is
unable to receive or carry--which allow the receiving party to review
the asset validation report, designate those nontransferable assets it
is unable to receive/carry, provide the customer with a list of those
assets, and require instructions from the customer regarding their
disposition--by requiring the receiving party to designate any third-
party products it is unable to receive.\32\ The MSRB stated that the
proposed rule change will eliminate the present need for reversing the
transfer of nontransferable assets, reduce the overall time frame for
transferring third-party products, and generally reduce delay in and
the cost of customer account transfers.\33\
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    \32\ See Notice of Filing and proposed Rule G-26(e)(vii).
    \33\ See Notice of Filing.
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Electronic Signature for Customer Authorization of Account Transfer

    Under current Rule G-26, a customer can initiate a transfer of a
municipal securities account from one dealer to another by giving
written notice to the receiving party.\34\ The MSRB states that under
current Rule G-26(c)(i), customers and dealers may use Form G-26 (the
transfer instruction prescribed by the MSRB), the transfer instructions
required by a clearing agency registered with the SEC in connection
with its automated customer account transfer system or transfer
instructions that are substantially similar to those required by such
clearing agency to accomplish a customer account transfer.\35\ The
proposed rule change would replace the written notice requirement under
current Rule G-26 with an authorized instruction requirement, which
could be a customer's actual written or electronic signature.\36\ The
MSRB stated that updating the written notice requirement in Rule G-26
to include electronic signatures will expedite the transfer of customer
assets between dealers and more easily allow investors to transfer
their assets to the dealer of their choice.\37\
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    \34\ Id.
    \35\ Id.
    \36\ See Notice of Filing and Supplementary Material .01 to
proposed Rule G-26.
    \37\ See Notice of Filing.
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Shortened ACATS Cycle

    The proposed rule change would shorten the time for validating or
taking exception to the transfer instructions from three days to one
day, and shorten the time for completing a customer account transfer
from four days to three days, respectively.\38\ Rule G-26 currently
specifies three days as the time to validate or take exception to the
transfer instructions and four days as the time frame for completion of
a customer account transfer.\39\ The MSRB stated that reducing those
time frames to one and three day(s), respectively, will ensure
consistency with the industry standard set by the NSCC and
harmonization with other SROs, while providing greater efficiency and
improving the customer experience in the customer account transfer
process.\40\
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    \38\ See Notice of Filing and proposed Rule G-26(d)(i), (f)(i).
    \39\ See Notice of Filing and Rule G-26(d)(i), (v).
    \40\ See Notice of Filing and proposed Rule G-26(d)(i), (f)(i).
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Definition of ``Nontransferable Asset''

    In response to a specific question in the Request for Comment,\41\
SIFMA

indicated that dealers may sell proprietary products that are municipal
securities to customers, the transferability of which FINRA Rule 11870
addresses.\42\ Given this affirmative response, and because a receiving
party cannot hold a proprietary product of a carrying party, the MSRB
stated that it is important to include proprietary products of the
carrying party in the definition of ``nontransferable asset'' to better
harmonize with FINRA's corresponding definition and to ensure that bank
dealers, and other dealers subject to Rule G-26, have clarity when
handling such proprietary products in customer account transfers.\43\
The proposed rule change would also provide the following options for
the disposition of such proprietary products that would be
nontransferable assets: Liquidation; retention by the carrying party
for the customer's benefit; or transfer, physically and directly, in
the customer's name to the customer.\44\
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    \41\ See Notice of Filing and MSRB Notice 2017-01 (Jan. 6, 2017)
(``Request for Comment''), Question 8 (``Do municipal securities
brokers or municipal securities dealers sell proprietary products
that are municipal securities to customers?'').
    \42\ See Notice of Filing and Letter from Leslie M. Norwood,
Managing Director and Associate General Counsel, SIFMA, to Ronald W.
Smith, Corporate Secretary, MSRB, dated February 17, 2017 (``SIFMA
Response Letter to Request for Comment'').
    \43\ See Notice of Filing and proposed Rule G-26(a)(iii)(C);
FINRA Rule 11870(c)(1)(D)(i).
    \44\ See Notice of Filing and proposed Rule G-26(c)(ii)(A)-(C).
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Disposition of Nontransferable Assets

    Under current Rule G-26, if there are nontransferable assets
included in a transfer instruction, there are multiple options
available to the customer for their disposition, and the carrying party
must request further instructions from the customer with respect to
which option the customer would like to exercise.\45\ Depending on the
type of nontransferable asset at issue, FINRA Rule 11870(c) requires
either the carrying party or the receiving party to provide the
customer with a list of the specific nontransferable assets and request
the customer's desired disposition of such assets. For example, FINRA
Rule 11870(c)(4) places the burden on the receiving party for third-
party products that are nontransferable.\46\ In response to the Request
for Comment, SIFMA noted that current industry practice and standard
requires that, depending on the type of nontransferable asset, either
the carrying party or the receiving party provide the customer with a
list of the nontransferable assets and request the customer's desired
disposition of such assets, as opposed to limiting that requirement to
the carrying party, which was proposed in the Request for Comment.\47\
The MSRB stated that, because there are third-party products that are
municipal securities that a receiving party may not be able to carry,
and such a receiving party may be the only party to a customer account
transfer with that knowledge, allowing the receiving party to notify
the customer of any nontransferable assets in a transfer and request
their disposition in such circumstances will help ensure that
nontransferable assets are properly identified and that both parties to
a transfer are coordinating closely to complete the transfer
efficiently and expeditiously.\48\ The MSRB also stated that to allow
for this, to improve harmonization with FINRA Rule 11870 and to promote
a uniform standard for all dealers, the proposed rule change would
explicitly require that the carrying party and/or the receiving party
provide the list of nontransferable assets.\49\
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    \45\ See Notice of Filing and Rule G-26(c)(ii).
    \46\ See Notice of Filing.
    \47\ See Notice of Filing and SIFMA Response Letter to Request
for Comment.
    \48\ See Notice of Filing.
    \49\ See Notice of Filing and proposed Rule G-26(c)(ii).
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Liquidation of Nontransferable Assets

    The proposed rule change would require a referral to the program
disclosure for a municipal fund security or to the registered
representative for specific details regarding any redemption or
liquidation-related fees.\50\ Under current Rule G-26, one of the
disposition options for nontransferable assets available to customers
is liquidation.\51\ When providing customers with this option, dealers
are required to specifically indicate any redemption or other
liquidation-related fees that may result from such liquidation and that
those fees may be deducted from the money balance due the customer.\52\
FINRA Rule 11870 provides the same requirements, but also requires
dealers to refer customers to the disclosure information for third-
party products or to the registered representative at the carrying
party for specific details regarding any such fees, as well as to
distribute any remaining balance to the customer and an indication of
the method of how it will do so.\53\ The MSRB stated that the inclusion
of these additional requirements in Rule G-26 will help ensure that
customers receive as much relevant information as possible regarding
potential redemption fees, including for municipal fund securities.\54\
In addition, the proposed rule change would require dealers to
specifically indicate any redemption or other liquidation-related fees
that may result from liquidation and that those fees may be deducted
from the money balance due the customer.\55\ The MSRB stated that it is
important to require explicitly the distribution of the remaining
balance to the customer and an indication of how it will be
accomplished.\56\
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    \50\ See Notice of Filing and proposed Rule G-26(c)(ii).
    \51\ See Notice of Filing and Rule G-26(c)(ii).
    \52\ See Notice of Filing and Rule G-26(c)(ii)(A).
    \53\ See Notice of Filing and FINRA Rule 11870(c)(3)(A),
(c)(4)(A).
    \54\ See Notice of Filing and proposed Rule G-26(c)(ii)(A).
    \55\ See Notice of Filing.
    \56\ See Notice of Filing and proposed Rule G-26(c)(ii)(A).
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Transfer of Nontransferable Assets to Customers

    The MSRB stated that some municipal securities that are
nontransferable assets could transferred, physically and directly, to
the customer, in a manner similar to FINRA Rule 11870(c)(3)(C)--which
provides an option for nontransferable assets that are proprietary
products to be transferred, physically and directly, in the customer's
name to the customer--and have therefore included amendments in the
proposed rule change that add this option to the alternative
dispositions available to customers.\57\ The MSRB noted that not all
municipal securities may be appropriate for this option and that the
carrying party would not be required to physically deliver any
nontransferable assets of which it does not have physical
possession.\58\
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    \57\ See Notice of Filing and proposed Rule G-26(c)(ii)(C).
    \58\ See Notice of Filing.
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Timing of Disposition of Nontransferable Assets

    Under the proposed rule change, the Rule G-26 would be amended to
harmonize with FINRA Rule 11870(c)(5) to require that the money balance
resulting from liquidation must be distributed, and any transfer
instructed by the customer must be initiated, within five business days
following receipt of the customer's disposition instruction.\59\ Rule
G-26 currently does not provide a time frame for the carrying party to
effect the disposition of nontransferable assets as instructed by the
customer. The MSRB stated that it is important to provide clarity as to
the timing of these dispositions to ensure

that customer transfers are handled expeditiously.\60\
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    \59\ Id.
    \60\ See Notice of Filing and proposed Rule G-26(c)(iii).
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Transfer Procedures

    Current Rule G-26(d) establishes, as part of the transfer
procedures, the requirements for validation of the transfer
instructions and completion of the transfer.\61\ The proposed rule
change would provide the provisions describing the specific validation/
exception and completion processes in new, separate sections of the
rule.\62\ As a result of this restructuring, the subsequent, existing
sections of Rule G-26 would be renumbered in proposed Rule G-26. The
MSRB stated that these amendments will detail the specific validation/
exception and completion processes more clearly and better harmonize
with FINRA Rule 11870.\63\
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    \61\ See Notice of Filing.
    \62\ See Notice of Filing and proposed Rule G-26(e), (f).
    \63\ See Notice of Filing.
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Validation of Transfer Instructions

    Under current Rule G-26(d)(iv)(A), upon validation of a transfer
instruction, the carrying party must ``freeze'' the account to be
transferred and return the transfer instruction to the receiving party
with an attachment indicating all securities positions and money
balance in the account as shown on the books of the carrying party.\64\
Because the proposed rule change would allow for partial account
transfers of specifically designated municipal securities assets, the
proposed rule change would require the account freeze only for
validation of the transfer of an entire account, as the customer's
account at the carrying party should not be frozen if certain municipal
securities would remain in the account and the customer may want to
continue transacting in that account.\65\ Under the proposed rule
change, for whole and partial account transfers, the carrying party
would continue to have the responsibility to return the instructions
and indicate the securities positions and money balance to be
transferred.\66\ However, the MSRB noted that to identify the assets
held in the customer account at the carrying party more comprehensively
and to harmonize with FINRA Rule 11870(d)(5)(A), the proposed rule
change would also require the carrying party to indicate safekeeping
positions,\67\ which are defined to be any security held by a carrying
party in the name of the customer, including securities that are
unendorsed or have a stock/bond power attached thereto.\68\
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    \64\ Id.
    \65\ See Notice of Filing and proposed Rule G-26(e)(i).
    \66\ See Notice of Filing and proposed Rule G-26(e)(ii).
    \67\ Id.
    \68\ See Notice of Filing and proposed Rule G-26(a)(vi).
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    Additionally, current Rule G-26(d)(iv)(B) requires the carrying
party to include a then-current market value for all assets to be
transferred. FINRA Rule 11870(d)(5) provides that the original cost
should be used as the value if a then-current value cannot be
determined for an asset.\69\ The MSRB stated that the proposed rule
change would include a provision substantially similar to the FINRA
provision to provide clarity on how any such municipal securities
should be valued and to improve harmonization between the MSRB and
FINRA rules.\70\
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    \69\ See Notice of Filing.
    \70\ See Notice of Filing and proposed Rule G-26(e)(ii).
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Exceptions to Transfer Instructions

    As part of the validation process, current Rule G-26 provides that
the carrying party may take certain exceptions to the transfer
instructions authorized by the customer and provided by the receiving
party. Specifically, Rule G-26(d)(ii) allows a carrying party to take
exception to a transfer instruction only if it has no record of the
account on its books or the transfer instruction is incomplete.\71\
FINRA Rule 11870(d)(3) provides numerous other bases to take exception
to a transfer instruction that--according to the MSRB--would more
comprehensively address potential issues with a transfer instruction
with which a carrying party could reasonably take issue and better
harmonize with FINRA Rule 11870.\72\ Accordingly, the MSRB stated, in
addition to the existing bases for exceptions, the proposed rule change
would allow a carrying party to take exception to a transfer
instruction if: (1) The transfer instruction contains an improper
signature; (2) additional documentation is required (e.g., legal
documents such as death or marriage certificate); (3) the account is
``flat'' and reflects no transferable assets; \73\ (4) the account
number is invalid (i.e., the account number is not on the carrying
party's books); \74\ (5) it is a duplicate request; (6) it violates the
receiving party's credit policy; (7) it contains unrecognized residual
credit assets (i.e., the receiving party cannot identify the customer);
(8) the customer rescinds the instruction (e.g., the customer has
submitted a written request to cancel the transfer); (9) there is a
mismatch of the Social Security Number/Tax ID (e.g., the number on the
transfer instruction does not correspond to that on the carrying
party's records); (10) the account title on the transfer instruction
does not match that on the carrying party's records; (11) the account
type on the transfer instruction does not correspond to that on the
carrying party's records; (12) the transfer instruction is missing or
contains an improper authorization (e.g., the transfer instruction
requires an additional customer authorization or successor custodian's
acceptance authorization or custodial approval; or (13) the customer
has taken possession of the assets in the account (e.g., the municipal
securities account assets in question have been transferred directly to
the customer).\75\ The MSRB stated that in order to include the
exceptions to transfer instructions with the provisions related to
validation, the proposed rule change would move the existing exceptions
and add the new exceptions in the new separate section on validation of
transfer instructions.\76\
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    \71\ See Notice of Filing and Rule G-26(d)(ii).
    \72\ See Notice of Filing.
    \73\ The MSRB stated that for such an exception, the receiving
party would have to resubmit the transfer instruction only if the
most recent customer statement is attached. See Notice of Filing and
proposed Rule G-26(e)(v).
    \74\ The MSRB stated that if the carrying party has changed the
account number for purposes of internally reassigning the account,
it would be the responsibility of the carrying party to track the
changed account number, and such reassigned account number would not
be considered invalid for purposes of fulfilling a transfer
instruction. See Notice of Filing and proposed Rule G-26(e)(iv)(F).
    \75\ See Notice of Filing and proposed Rule G-26(e)(iv).
    \76\ See Notice of Filing.
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    Additionally, FINRA Rule 11870(d)(2) precludes a carrying party
from taking an exception and denying validation of the transfer
instruction because of a dispute over security positions or the money
balance in the account to be transferred, and it requires the carrying
party to transfer the positions and/or money balance reflected on its
books for the account.\77\ The MSRB stated that this provision will be
equally valuable to transfers covered under Rule G-26 to ensure that
customers are able to hold their municipal securities at their dealers
of choice.\78\
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    \77\ Id.
    \78\ See Notice of Filing and proposed Rule G-26(e)(iii).
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Recordkeeping and Customer Notification

    According to the MSRB, during the validation process for a customer
account transfer, there is a risk that the parties to the transfer fail
to identify

certain nontransferable assets, resulting in the improper transfer of
those assets.\79\ FINRA Rule 11870(c)(1)(E) requires that the parties
promptly resolve and reverse any such misidentified nontransferable
assets, update their records and bookkeeping systems and notify the
customer of the action taken. The proposed rule change would require
that the parties promptly resolve and reverse any such misidentified
nontransferable assets, update their records and bookkeeping systems
and notify the customer of the action taken.\80\ The MSRB stated that
believes it is important to add this explicit requirement to Rule G-26
to ensure that dealers address any errors in the transfer process
promptly.\81\
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    \79\ See Notice of Filing.
    \80\ See Notice of Filing and proposed Rule G-26(e)(vi).
    \81\ See Notice of Filing.
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Transfer Rejection

    The proposed rule change would provide the receiving party the
ability to deny a customer's transfer request due to noncompliance with
its credit policies or minimum asset requirements.\82\ FINRA Rule
11870(d)(8) allows the receiving party to reject a full account
transfer if the account would not be in compliance with its credit
policies or minimum asset requirements.\83\ A receiving party may not
reject only a portion of the account assets (i.e., the particular
assets not in compliance with the dealer's credit policies or minimum
asset requirement). Rule G-26 currently does not include any comparable
provisions, but the MSRB stated that it is reasonable for a receiving
party to deny a customer's transfer request due to noncompliance with
its credit policies or minimum asset requirements.\84\
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    \82\ See Notice of Filing and proposed Rule G-26(e)(viii).
    \83\ See Notice of Filing.
    \84\ See Notice of Filing.
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Resolution of Discrepancies

    Rule G-26(f) currently provides that any discrepancies relating to
positions or money balances that exist or occur after transfer of a
customer account must be resolved promptly.\85\ FINRA Rule 11870(g)
includes the same standard but also requires that the carrying party
must promptly distribute to the receiving party any transferable assets
that accrue to the customer's transferred account after the transfer
has been effected. Further, FINRA Rule 11870(g) provides clarity to the
promptness requirement by requiring that any claims of discrepancies
after a transfer must be resolved within five business days from notice
of such claim or the non-claiming party must take exception to the
claim and set forth specific reasons for doing so. The proposed rule
change would include these same additional provisions.\86\ The MSRB
stated that these amendments will provide the same level of clarity as,
and improve harmonization with, FINRA Rule 11870(g).\87\
---------------------------------------------------------------------------

    \85\ See Notice of Filing and Rule G-26(f).
    \86\ See Notice of Filing proposed Rule G-26(i)(ii)-(iii).
    \87\ See Notice of Filing.
---------------------------------------------------------------------------

Participant in a Registered Clearing Agency

    Rule G-26(h) currently requires the account transfer procedure to
be accomplished pursuant to the rules of and through a registered
clearing agency when both the carrying party and the receiving party
are direct participants in a clearing agency that is registered with
the SEC and offers automated customer securities account transfer
capabilities.\88\ FINRA Rule 11870(m) has a similar requirement that
provides an exception for specifically designated securities assets
transferred pursuant to the submittal of a customer's authorized
alternate instructions to the carrying party.\89\ FINRA Rule
11870(m)(3) also requires the transfer of residual credit positions
through the registered clearing agency. FINRA Rule 11870(m)(4) also
prescribes several conditions for such transfers for participants in a
registered clearing agency.\90\ The MSRB stated that customers and the
parties to a customer account transfer should have the option of
performing the transfer outside of the facilities of a registered
clearing agency when an appropriate authorized alternate instruction is
given.\91\ Additionally, the MSRB stated the additional prescription
related to the process provided by FINRA will give greater clarity to
customers and dealers.\92\ The MSRB, therefore, included these
provisions in the proposed rule change.\93\
---------------------------------------------------------------------------

    \88\ See Notice of Filing and Rule G-26(h).
    \89\ See Notice of Filing.
    \90\ See Notice of Filing and proposed Rule G-26(a)(iv)-(v).
    \91\ See Notice of Filing.
    \92\ Id.
    \93\ See Notice of Filing and proposed Rule G-26(k).
---------------------------------------------------------------------------

Transfer of Residual Positions

    The proposed rule change would include a provision with the same
10-business-day requirement as FINRA Rule 11870(n) \94\ that is not
limited to when both parties are direct participants in a clearing
agency registered with the SEC offering automated customer securities
account transfer capabilities.\95\ The MSRB stated that the majority of
customer account transfers subject to Rule G-26 occur manually, and
that it is important to provide clarity on the obligation and timing
required to transfer such credit balances for any customer account
transfer.\96\
---------------------------------------------------------------------------

    \94\ See Notice of Filing.
    \95\ See Notice of Filing and proposed Rule G-26(g).
    \96\ See Notice of Filing.
---------------------------------------------------------------------------

Written Procedures

    Current Rule G-26 does not itself include any requirement for
policies and procedures.\97\ The proposed rule change includes a
requirement for dealers to document the procedures they follow to
effect customer account transfers and to require explicitly written
procedures for supervision of the same.\98\ The MSRB stated that such a
requirement is consistent with MSRB Rule G-27, on supervision.\99\
---------------------------------------------------------------------------

    \97\ Id.
    \98\ See Notice of Filing and Supplementary Material .02 to
proposed Rule G-26.
    \99\ See Notice of Filing.
---------------------------------------------------------------------------

FINRA Rule 11650--Transfer Fees

    The MSRB stated that it is important to clarify which party is
responsible for the fees incurred for a customer account transfer. The
proposed rule change would include a provision identical to FINRA Rule
11650 which specifies that the party at the instance of which a
transfer of securities is made shall pay all service charges of the
transfer agent.\100\
---------------------------------------------------------------------------

    \100\ See Notice of Filing and Supplementary Material .03 to
proposed Rule G-26.
---------------------------------------------------------------------------

III. Summary of Comments Received and MSRB's Responses to Comments

    As noted previously, the Commission received two comment letters on
the proposed rule change, as well as the MSRB Response Letter and
Amendment No. 1. SIFMA expressed general support for the stated purpose
of the proposed rule change, although SIFMA disapproved of the proposed
rule change in its current form and stated that the proposed rule
change is unnecessary and not an efficient way to achieve its stated
purposes.\101\ SIFMA suggested alternative amendments to Rule G-26 that
it believed would result in a more efficient rule that would be more
closely harmonized with similar SRO rules.\102\ BDA suggested that the
Commission request that FINRA harmonize the timeframe in FINRA Rule
11870(f)(1) with MSRB Rules G-12(h) and G-26 as soon as practicable and
that

the MSRB amend the proposed rule change to allow for a longer period
between the adoption of the proposed rule change and its effective
date.\103\ The MSRB stated that it believes the proposed rule change is
consistent with its statutory mandate and has responded to the
comments, as discussed below.\104\
---------------------------------------------------------------------------

    \101\ See SIFMA Letter.
    \102\ Id.
    \103\ See BDA Letter.
    \104\ See MSRB Response Letter.
---------------------------------------------------------------------------

1. Alternative Amendments to Rule G-26 To Further Purpose of Proposed
Rule Change

    SIFMA stated that the MSRB should not have rejected its previously
submitted suggestion to amend Rule G-26 to follow the NYSE model and
incorporate FINRA Rule 11870 by reference because, contrary to the MSRB
statement in the Notice of Filing, ``the MSRB would not be seen to be
delegating its core mission to protect the municipal securities market,
as there is nothing particularly unique regarding the transfer of
customer accounts with respect to municipal securities.'' \105\ SIFMA
noted that it believed there is precedence in the MSRB rulebook for
making incorporating the rules of other SROs by reference in a MSRB
rule.\106\ SIFMA also suggested that, as an alternative to
incorporation by reference, ``FINRA member firms could elect to follow
FINRA 11870 in lieu of MSRB Rule G-26, NYSE member firms can follow
NYSE Rule 412 in lieu of MSRB Rule G-26, and firms that are not covered
by either, then must follow MSRB Rule G-26.'' \107\ SIFMA stated that
it believes adoption of one of these, or similar, alternative would be
an ``efficient way to reduce confusion and risk to investors, and
reduce regulatory risk to dealers.'' \108\
---------------------------------------------------------------------------

    \105\ See SIFMA Letter and SIFMA Response Letter to Request for
Comment.
    \106\ See SIFMA Letter.
    \107\ Id.
    \108\ Id.
---------------------------------------------------------------------------

    The MSRB responded that, as it previously noted in the Notice of
Filing, it continues to believe that Rule G-26 is necessary and that
the proposed rule change is the appropriate approach to achieve the
purpose of modernizing the rule and promoting a uniform customer
account transfer standard for all dealers. The MSRB noted that it
believed that SIFMA's comments are substantially similar to previous
comments it submitted in response to the MSRB's Request for
Comment,\109\ and the MSRB had addressed them in detail in the Notice
of Filing. The MSRB stated that it believes that, although SIFMA is
correct that any firms that are not members of FINRA or the NYSE are
likely not direct clearing participants of the NSCC and, therefore,
ineligible to participate in ACATS, this does not obviate the need for
Rule G-26. The MSRB stated that, contrary to SIFMA's assertion, this is
a key reason why Rule G-26 is not redundant and is necessary to ensure
that all dealers are subject to a customer account transfer rule, and
the proposed rule change is necessary and appropriate to ensure that
the standard in Rule G-26 is consistent with the industry
standard.\110\ The MSRB further stated that ACATS, which is established
and governed by NSCC Rule 50, is an automated process utilized by NSCC
members to perform customer account transfers.\111\ The MSRB also
responded to SIFMA's comment by stating that not only does NSCC Rule 50
not apply to dealers that are not direct clearing participants and
members of NSCC, it does not apply to manual processes, which are used
by certain dealers with municipal security-only customer accounts,
particularly bank dealers that are not members of FINRA or the
NYSE.\112\ The MSRB stated that, as a result, it believes that there
remains a need for Rule G-26, which applies, currently and as proposed,
to both automated and manual processes, including provisions to
facilitate the use of ACATS,\113\ to address the customer account
transfers of these dealers.\114\ The MSRB stated that it continues to
believe that amending Rule G-26 to incorporate FINRA Rule 11870 by
reference would not be an appropriate approach to the proposed rule
change, as well as being inconsistent with the MSRB's statutory mandate
and mission, as most relevant here, to protect investors, issuers, and
the public interest, and to promote a fair and efficient municipal
market.\115\ The MSRB further stated that--putting aside whether there
are unique aspects of the transfer of municipal security-only customer
accounts--it believes that bank dealers clearly are unique, as they
would not be subject to a customer account transfer rule but for the
existence of Rule G-26.\116\ The MSRB stated that, as a result, it
believes it is important that, at a minimum, it retain the full ability
to deliberately consider issues that may be unique to these dealers,
but also to the municipal securities market more broadly, in the
consideration of future amendments to Rule G-26, which ability could be
hindered if the MSRB were merely to incorporate FINRA Rule 11870 by
reference.\117\
---------------------------------------------------------------------------

    \109\ See Request for Comment.
    \110\ See MSRB Response Letter.
    \111\ Id.
    \112\ Id.
    \113\ See Notice of Filing, MSRB Rule G-26(h) and proposed MSRB
Rule G-26(k)(i).
    \114\ See MSRB Response Letter.
    \115\ Id.
    \116\ Id.
    \117\ Id.
---------------------------------------------------------------------------

    In response to SIFMA's suggested alternative to effectively allow
FINRA and NYSE members to follow FINRA Rule 11870 in lieu of Rule G-26,
while dealers that are not members of those SROs would remain subject
to Rule G-26, the MSRB stated that it believes that SIFMA's suggestion
captures how Rule G-26 already operates (and would continue to operate
as proposed to be amended).\118\ The MSRB further responded by stating
that it had explained in the Request for Comment and the Notice of
Filing that, at the time Rule G-26 was adopted, NYSE Rule 412 and FINRA
Rule 11870 (NASD Rule 11870 at the time) were not applicable to certain
dealers, particularly those with municipal security-only accounts and
bank dealers.\119\ The MSRB further stated that this jurisdictional
divide remains true today, such that Rule G-26 is not applicable to
FINRA or NYSE members.\120\ However, the MSRB noted that there are
dealers which are not members of those other SROs, particularly bank
dealers, necessitating the existence of Rule G-26.\121\ The MSRB
further stated that the main effect of the proposed rule change is to
increase harmonization with FINRA Rule 11870, promoting a uniform
customer account transfer standard that will make the transfer of
customer securities accounts more flexible, less burdensome and more
efficient, while reducing confusion and risk to investors and allowing
them to better move their municipal securities to their dealer of
choice.\122\
---------------------------------------------------------------------------

    \118\ Id.
    \119\ See MSRB Response Letter, Notice of Filing and Request for
Comment.
    \120\ See MSRB Response Letter.
    \121\ Id.
    \122\ Id.
---------------------------------------------------------------------------

2. Extension of the Implementation Date of the Proposed Rule Change

    BDA suggested, in its comment letter, that the effective date of
the proposed rule change be adjusted from three months from the date of
approval to 180 days from the effective date of a approval to benefit
smaller dealers with fewer compliance staff and resources and dealers
subject to new Department of Labor rules effective January 1, 2018 and
new MSRB and FINRA retail confirmation rules effective in May
2018.\123\
---------------------------------------------------------------------------

    \123\ See BDA Letter.

---------------------------------------------------------------------------

    The MSRB stated that it agreed that a more lengthy implementation
period is appropriate, but that it does not believe a period of nearly
a year is necessary, as the proposed rule change is designed primarily
to create efficiencies in the customer account transfer process and the
MSRB does not anticipate that the limited number of dealers subject to
the amended rule would need to make significant changes to systems and/
or policies and procedures.\124\ To ease the extent of the burden
created by the proposed rule change, the MSRB stated that it believes
doubling the implementation period from three to six months from the
date of approval is a sufficient amount of time for dealers to effect
any changes necessary to achieve compliance.\125\ In response to the
comment from BDA, the MSRB proposed, in Amendment No. 1, to amend the
effective date of the proposed rule change requested in the Notice of
Filing from three months to six months from the date of approval.\126\
---------------------------------------------------------------------------

    \124\ See MSRB Response Letter and Amendment No. 1.
    \125\ See MSRB Response Letter and Amendment No. 1.
    \126\ See Amendment No. 1.
---------------------------------------------------------------------------

3. Economic Impact of the Proposed Rule Change

    SIFMA stated that while it agrees that current Rule G-26 is not
consistent with current securities industry standards and practices and
that it likely creates ``uncertainties, inefficiencies and unnecessary
costs associated with customer account transfers for all market
participants'' but that the proposed rule change is not the most
effective means for addressing these issues.\127\ SIFMA stated that
``[h]aving different rules for account level transfers could result in:
Additional compliance burdens, conflicting examiners from different
regulators applying different rules to the same customer account
transfer, and confusion among customers.'' \128\
---------------------------------------------------------------------------

    \127\ See SIFMA Letter.
    \128\ Id.
---------------------------------------------------------------------------

    The MSRB stated in Notice of Filing that it has evaluated the
potential impacts on competition of the proposed rule change, including
in comparison to reasonable alternative regulatory approaches, relative
to the baseline in accordance with its Policy on the Use of Economic
Analysis in MSRB Rulemaking,\129\ and does not believe the proposed
rule change imposes any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.\130\
---------------------------------------------------------------------------

    \129\ See Notice of Filing and Policy on the Use of Economic
Analysis in MSRB Rulemaking, MSRB, available at: http://msrb.org/rules-and-interpretations/economic-analysis-policy.
    \130\ See Notice of Filing.
---------------------------------------------------------------------------

4. Request for an Update and Harmonization of Relevant FINRA Rules

    SIFMA and BDA requested that FINRA amend its Rule 11870 as soon as
practicable to reflect the recent amendments to MSRB Rule G-12 relating
to close-outs.\131\ SIFMA also suggested that the Commission should
direct FINRA to ``consolidate its provisions that relate to the
transfer of securities into FINRA 11870'' and recommended that FINRA
delete its Rule 11650 with its operative language being included as new
FINRA 11870 Supplementary Material .04.\132\
---------------------------------------------------------------------------

    \131\ See SIFMA Letter and BDA Letter.
    \132\ See SIFMA Letter.
---------------------------------------------------------------------------

    The comments from BDA and SIFMA regarding their suggestion that
FINRA amend its Rules 11870 and 11650 are beyond the scope of the
proposed rule change.

IV. Discussion and Commission Findings

    The Commission has carefully considered the proposed rule change,
the comment letters received, the MSRB Response Letter, and Amendment
No. 1. 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), 15B(b)(2)(C) and
15B(b)(2)(G) of the Act.\133\ Section 15B(b)(2) of the Act requires the
MSRB to adopt rules to effect the purposes of this 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.\134\ Section 15B(b)(2)(C) of the Act requires that the MSRB's
rules 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, in general, to protect investors, municipal
entities, obligated persons, and the public interest.\135\ Section
15B(b)(2)(G) of the Act requires that the MSRB's rules 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.\136\
---------------------------------------------------------------------------

    \133\ 15 U.S.C. 78o-4(b)(2); 78o-4(b)(2)(C) and 78o-4(b)(2)(G).
    \134\ See 15 U.S.C. 78o-4(b)(2).
    \135\ See 15 U.S.C. 78o-4(b)(2)(C).
    \136\ See 15 U.S.C. 78o-4(b)(2)(G).
---------------------------------------------------------------------------

    The Commission believes that the proposed rule change is consistent
with the provisions of Sections 15B(b)(2) \137\ and 15B(b)(2)(C) \138\
of the Act because it would re-establish consistency with the customer
account transfer rules of other SROs by conforming to significant
updates by the NSCC, the NYSE and FINRA that have relevance to
municipal securities. The Commission further believes that including
certain provisions from the other rules in the proposed rule change
will make the transfer of customer securities account assets more
flexible, less burdensome, and more efficient, while reducing confusion
and risk to investors and allowing them to better move their securities
to their dealer of choice. The Commission believes that the proposed
rule change will promote fairness and provide greater efficiency in the
transfer of customer accounts, which should prevent fraudulent and
manipulative acts and practices, promote just and equitable principles
of trade, 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, remove impediments to and perfect the mechanism of
a free and open market in municipal securities and municipal financial
products, and, in general, protect investors and the public interest.
---------------------------------------------------------------------------

    \137\ See 15 U.S.C. 78o-4(b)(2).
    \138\ See 15 U.S.C. 78o-4(b)(2)(C).
---------------------------------------------------------------------------

    The Commission believes that the proposed rule change is consistent
with Section 15B(b)(2)(G) of the Act \139\ because it would require
dealers to document the procedures they follow to effect customer
account transfers and to require explicitly written procedures for
supervision of the same.
---------------------------------------------------------------------------

    \139\ Id.

---------------------------------------------------------------------------

    In approving the proposed rule change, the Commission also has
considered the impact of the proposed rule change, as modified by
Amendment No. 1, on efficiency, competition, and capital
formation.\140\ The Commission 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. The Commission
believes the proposed rule change would apply equally to all municipal
securities brokers and municipal securities dealers and may reduce
inefficiencies that stem from uncertainty and confusion associated with
existing Rule G-26. The Commission believes that the clarifications and
revisions included in the proposed rule change will likely result in
dealers processing of customer account transfers by dealer in a manner
that more closely reflects the securities industry standard, which may,
in turn, reduce operational risk to dealers and investors. Furthermore,
the Commission believes that the proposed rule change will likely make
the transfer of customer municipal securities account assets more
flexible, less burdensome, and more efficient, while reducing confusion
and risk to investors and allowing them to more efficiently and
effectively transfer their municipal securities to their dealer of
choice.
---------------------------------------------------------------------------

    \140\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    As noted above, the Commission received two comment letters on the
filing. The Commission believes that the MSRB, through its responses
and through Amendment No. 1, has addressed commenters' concerns.
    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 the foregoing, including whether Amendment No. 1
to the proposed rule change is consistent with the Act. Comments may be
submitted by any of the following methods:

Electronic Comments

     Use of the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-MSRB-2017-03 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-2017-03. 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 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-2017-03 and should be
submitted on or before August 23, 2017.

VI. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1

    The Commission finds good cause for approving the proposed rule
change, as amended by Amendment No. 1, prior to the 30th day after the
date of publication of notice of Amendment No. 1 in the Federal
Register. As discussed above, Amendment No. 1 modifies the proposed
rule change by proposing a longer implementation period of six months
rather than the previously proposed three months. The MSRB has proposed
the revisions included in Amendment No. 1 to provide a sufficient
amount of time for dealers to effect any changes necessary to achieve
compliance with the proposed rule change. As noted by the MSRB,
Amendment No. 1 does not alter the substance of the original proposed
rule change and only provides a lengthier implementation period to
address a commenter's concern and ease the limited burden of the
proposed rule change on dealers.
    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.

VIII. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\141\ that the proposed rule change (SR-MSRB-2017-03) be, and
hereby is, approved.
---------------------------------------------------------------------------

    \141\ 15 U.S.C. 78s(b)(2).

    For the Commission, pursuant to delegated authority.\142\
---------------------------------------------------------------------------

    \142\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16213 Filed 8-1-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 64 (Tuesday, April 6, 2021)]
[Notices]
[Pages 17849-17850]
[FR Doc No: 2021-07038]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket No. USCG-2021-0124]

Certificate of Alternative Compliance for the USNS HARVEY MILK
and USNS EARL WARREN

AGENCY: Coast Guard, DHS.

ACTION: Notification of issuance of a certificate of alternative
compliance.

-----------------------------------------------------------------------

SUMMARY: The Coast Guard announces that the Eleventh Coast Guard
District's Prevention Division has issued a certificate of alternative
compliance from the International Regulations for Preventing Collisions
at Sea, 1972 (72 COLREGS), for the USNS HARVEY MILK (O.N. CG1473700)
and USNS EARL WARREN (O.N. CG1473701). We are issuing this notice
because its publication is required by statute. Due to the design and
operation of the ship's whistles, USNS HARVEY MILK and USNS EARL WARREN
cannot fully comply with the light, shape, or sound signal provisions
of the 72 COLREGS without interfering with the design and construction
of each vessel. This notification of issuance of a certificate of
alternative compliance promotes the Coast Guard's marine safety
mission.

DATES: The Certificate of Alternative Compliance was issued on March
22, 2021.

FOR FURTHER INFORMATION CONTACT: For information or questions about
this notice call or email LT Amanda Garcia, District Eleven, Prevention
Division, U.S. Coast Guard, telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The United States is signatory to the
International Maritime Organization's International Regulations for
Preventing Collisions at Sea, 1972 (72 COLREGS), as amended. The
special construction or purpose of some vessels makes them unable to
comply with the light, shape, or sound signal provisions of the 72
COLREGS. Under statutory law, however, specified 72 COLREGS provisions
are not applicable to a vessel of special construction or purpose if
the Coast Guard determines that the vessel cannot comply fully with
those requirements without interfering with the special function of the
vessel.\1\
---------------------------------------------------------------------------

    \1\ 33 U.S.C. 1605.
---------------------------------------------------------------------------

    The owner, builder, operator, or agent of a special construction or
purpose vessel may apply to the Coast Guard District Office in which
the vessel is being built or operated for a determination that
compliance with alternative requirements is justified,\2\ and the Chief
of the Prevention Division would then issue the applicant a certificate
of alternative compliance (COAC) if he or she determines that the
vessel cannot comply fully with 72 COLREGS light, shape, and sound
signal provisions without interference with the vessel's special
function.\3\ If the Coast Guard issues a COAC, it must publish notice
of this action in the Federal Register.\4\
---------------------------------------------------------------------------

    \2\ 33 CFR 81.5.
    \3\ 33 CFR 81.9.
    \4\ 33 U.S.C. 1605(c) and 33 CFR 81.18.
---------------------------------------------------------------------------

    The Eleventh Coast Guard District's Prevention Division, U. S.
Coast Guard, certifies that the USNS HARVEY MILK (O.N. CG1473700) and
USNS EARL WARREN (O.N. CG1473701) are both vessels of special
construction or purpose, and that, with respect to the operation of the
ship's whistles, it is not possible to comply fully with the
requirements of the provisions enumerated in the 72 COLREGS, without
interfering with the normal operation, construction, or design of each
vessel. The Eleventh Coast Guard District's Prevention Division, U.S.
Coast Guard further finds and certifies that the operation of the
ship's whistles, are in the closest possible compliance with the
applicable provisions of the 72 COLREGS.\5\
---------------------------------------------------------------------------

    \5\ 33 U.S.C. 1605(a); 33 CFR 81.9.
---------------------------------------------------------------------------

    This notice is issued under authority of 33 U.S.C. 1605(c) and 33
CFR 81.18.

    Dated: March 30, 2021.
G.A. Callaghan,
Captain, U.S. Coast Guard, Chief, Prevention Division, Eleventh Coast
Guard District.
[FR Doc. 2021-07038 Filed 4-5-21; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 77, Number 141 (Monday, July 23, 2012)]
[Notices]
[Page 43072]
[FR Doc No: 2012-17826]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER12-2251-000]

Public Power & Utility of NY, Inc.; Supplemental Notice That
Initial Market-Based Rate Filing Includes Request for Blanket Section
204 Authorization

    This is a supplemental notice in the above-referenced proceeding,
of Public Power & Utility of NY, Inc.'s application for market-based
rate authority, with an accompanying rate schedule, noting that such
application includes a request for blanket authorization, under 18 CFR
part 34, of future issuances of securities and assumptions of
liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426, in accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone
filing a motion to intervene or protest must serve a copy of that
document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability is August 7, 2012.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First St. NE., Washington, DC 20426.
    The filings in the above-referenced proceeding(s) are accessible in
the Commission's eLibrary system by clicking on the appropriate link in
the above list. They are also available for review in the Commission's
Public Reference Room in Washington, DC. There is an eSubscription link
on the Web site that enables subscribers to receive email notification
when a document is added to a subscribed docket(s). For assistance with
any FERC Online service, please email<EMAIL_ADDRESS>or
call<PHONE_NUMBER> (toll free). For TTY, call<PHONE_NUMBER>.

    Dated: July 17, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-17826 Filed 7-20-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 79, Number 250 (Wednesday, December 31, 2014)]
[Notices]
[Pages 78885-78887]
[FR Doc No: 2014-30683]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Docket ID FEMA-2014-0002]

Final Flood Hazard Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Final notice.

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SUMMARY: Flood hazard determinations, which may include additions or
modifications of Base Flood Elevations (BFEs), base flood depths,
Special Flood Hazard Area (SFHA) boundaries or zone designations, or
regulatory floodways on the Flood Insurance Rate Maps (FIRMs) and where
applicable, in the supporting Flood Insurance Study (FIS) reports have
been made final for the communities listed in the table below.
    The FIRM and FIS report are the basis of the floodplain management
measures that a community is required either to adopt or to show
evidence of having in effect in order to qualify or remain qualified
for participation in the Federal Emergency Management Agency's (FEMA's)
National Flood Insurance Program (NFIP). In addition, the FIRM and FIS
report are used by insurance agents and others to calculate appropriate
flood insurance premium rates for buildings and the contents of those
buildings.

DATES: The effective date of February 18, 2015 which has been
established for the FIRM and, where applicable, the supporting FIS
report showing the new or modified flood hazard information for each
community.

ADDRESSES: The FIRM, and if applicable, the FIS report containing the
final flood hazard information for each community is available for
inspection at the respective Community Map Repository address listed in
the tables below and will be available online through the FEMA Map
Service Center at www.msc.fema.gov by the effective date indicated
above.

FOR FURTHER INFORMATION CONTACT: Luis Rodriguez, Chief, Engineering
Management Branch, Federal Insurance and Mitigation Administration,
FEMA500 C Street SW., Washington, DC 20472,<PHONE_NUMBER>, or (email)
<EMAIL_ADDRESS>or visit the FEMA Map Information
eXchange (FMIX) online at www.floodmaps.fema.gov/fhm/fmx_main.html.

SUPPLEMENTARY INFORMATION: The Federal Emergency Management Agency
(FEMA) makes the final determinations listed below for the new or
modified flood hazard information for each community listed.
Notification of these changes has been published in newspapers of local
circulation and 90 days have elapsed since that publication. The Deputy
Associate Administrator for Mitigation has resolved any appeals
resulting from this notification.
    This final notice is issued in accordance with section 110 of the
Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part
67. FEMA has developed criteria for floodplain management in floodprone
areas in accordance with 44 CFR part 60.
    Interested lessees and owners of real property are encouraged to
review the new or revised FIRM and FIS report available at the address
cited below for

each community or online through the FEMA Map Service Center at
www.msc.fema.gov.
    The flood hazard determinations are made final in the watersheds
and/or communities listed in the table below.

(Catalog of Federal Domestic Assistance No. 97.022, ``Flood
Insurance.'')

    Dated: December 11, 2014.
Roy E. Wright,
Deputy Associate Administrator for Mitigation, Department of Homeland
Security, Federal Emergency Management Agency.

------------------------------------------------------------------------
                                             Community map repository
               Community                             address
------------------------------------------------------------------------
             Mohave County, Arizona, and Incorporated Areas
                         Docket No.: FEMA-B-1351
------------------------------------------------------------------------
City of Kingman........................  City Hall, 310 North 4th
                                          Street, Kingman, AZ 86401.
Unincorporated Areas of Mohave County..  County Administration Building,
                                          700 West Beale Street,
                                          Kingman, AZ 86401.
------------------------------------------------------------------------
        San Bernardino County, California, and Incorporated Areas
                         Docket No.: FEMA-B-1351
------------------------------------------------------------------------
City of Ontario........................  City Hall, Engineering
                                          Department Public Counter, 303
                                          East B Street, Ontario, CA
                                          91764.
City of Rancho Cucamonga...............  City Hall, Engineering
                                          Department Plaza Level, 10500
                                          Civic Center Drive, Rancho
                                          Cucamonga, CA 91730.
------------------------------------------------------------------------
             Fayette County, Indiana, and Incorporated Areas
                         Docket No.: FEMA-B-1348
------------------------------------------------------------------------
City of Connersville...................  Fayette County Area Plan
                                          Commission, Courthouse Annex,
                                          401 North Central Avenue,
                                          Connersville, IN 47331.
Unincorporated Areas of Fayette County.  Fayette County Area Plan
                                          Commission, Courthouse Annex,
                                          401 North Central Avenue,
                                          Connersville, IN 47331.
------------------------------------------------------------------------
          Anne Arundel County, Maryland and Incorporated Areas
                         Docket No.: FEMA-B-1352
------------------------------------------------------------------------
City of Annapolis......................  Department of Neighborhood and
                                          Environmental Programs, 145
                                          Gorman Street, Annapolis, MD
                                          21401.
Town of Highland Beach.................  Town Hall, 3243 Walnut Drive,
                                          Highland Beach, MD 21403.
Unincorporated Areas of Anne Arundel     Anne Arundel County Department
 County.                                  of Inspections and Permits,
                                          2664 Riva Road, Annapolis, MD
                                          21401.
------------------------------------------------------------------------
              Newaygo County, Michigan (All Jurisdictions)
                         Docket No.: FEMA-B-1348
------------------------------------------------------------------------
Charter Township of Sheridan...........  Township Hall, 6360 South
                                          Township Parkway, Fremont, MI
                                          49412.
City of Fremont........................  City Hall, 101 East Main
                                          Street, Fremont, MI 49412.
City of Newaygo........................  City Hall, 28 North State Road,
                                          Newaygo, MI 49337.
City of White Cloud....................  City Hall, 12 North Charles
                                          Street, White Cloud, MI 49349.
Township of Ashland....................  Township Hall, 2019 West 120th
                                          Street, Grant, MI 49327.
Township of Bridgeton..................  Township Hall, 11830 South
                                          Warner Avenue, Grant, MI
                                          49327.
Township of Brooks.....................  Township Hall, 490 Quarterline
                                          Road, Newaygo, MI 49337.
Township of Croton.....................  Township Hall, 5833 East
                                          Division Street, Newaygo, MI
                                          49337.
Township of Dayton.....................  Township Hall, 3215 South Stone
                                          Road, Fremont, MI 49412.
Township of Everett....................  Township Hall, 1516 East 8th
                                          Street, White Cloud, MI 49349.
Township of Garfield...................  Township Hall, 7910 South
                                          Bingham Avenue, Newaygo, MI
                                          49337.
Township of Lilley.....................  Multi Purpose Building, 10767
                                          Prospect Avenue, Bitely, MI
                                          49309.
Township of Lincoln....................  Township Hall, 1988 North
                                          Wisner Avenue, White Cloud, MI
                                          49349.
Township of Merrill....................  Township Hall, 1585 West 11
                                          Mile Road, Bitely, MI 49309.
Township of Sherman....................  Township Hall, 2168 South
                                          Wisner Avenue, Fremont, MI
                                          49412.
Township of Wilcox.....................  Township Hall, 1795 North
                                          Evergreen Drive, White Cloud,
                                          MI 49349.
------------------------------------------------------------------------
            King George County, Virginia (All Jurisdictions)
                         Docket No.: FEMA-B-1359
------------------------------------------------------------------------
Unincorporated Areas of King George      King George County Community
 County.                                  Development Department, 10459
                                          Courthouse Drive, Suite 104,
                                          King George, VA 22485.
------------------------------------------------------------------------
           Northumberland County, Virginia (All Jurisdictions)
                         Docket No.: FEMA-B-1352
------------------------------------------------------------------------
Unincorporated Areas of Northumberland   Northumberland County Building
 County.                                  and Zoning Department, 72
                                          Monument Place, Heathsville,
                                          VA 22473.
------------------------------------------------------------------------

              Stafford County, Virginia (All Jurisdictions)
                         Docket No.: FEMA-B-1359
------------------------------------------------------------------------
Unincorporated Areas of Stafford County  Stafford County Administration
                                          Center, Department of Code
                                          Administration, 1300
                                          Courthouse Road, Stafford, VA
                                          22554.
------------------------------------------------------------------------

[FR Doc. 2014-30683 Filed 12-30-14; 8:45 am]
BILLING CODE 9110-12-P