[Federal Register: December 28, 2007 (Volume 72, Number 248)]
[Notices]
[Page 73941-73946]
[DOCID:fr28de07-196]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57004; File No. SR-MSRB-2007-06]

Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing of Proposed Rule Change Relating to an
Amendment to the Municipal Securities Information Library[reg] System
To Establish a Pilot System for Consolidated Dissemination of
Disclosure Documents and Related Information Through an Internet-Based
Public Access Portal

December 20, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 15, 2007, the Municipal Securities Rulemaking Board
(``MSRB'' or ``Board'') filed with the Securities and Exchange
Commission (``Commission'' or ``SEC'') the proposed rule change as
described in Items I, II, and III below, which Items have been
substantially prepared by the MSRB. 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.
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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
establishing a pilot system for the consolidated dissemination, through
an Internet-based public access portal, of disclosure documents and
related information received by the MSRB through its existing
facilities (the ``pilot portal''). The proposed rule change consists of
an amendment to the MSRB's existing Official Statement and Advance
Refunding Document (OS/ARD) system of the Municipal Securities
Information Library[reg] (``MSIL''[reg]) system,\3\ under which the
pilot portal would be established and operated pending establishment of
a permanent Internet-based public access system (the ``permanent
system''). The MSRB expects the pilot portal to become operational on
the later of March 10, 2008 or 5 business days after SEC approval. The
MSRB requests approval of the pilot portal for a period of one year
from the date it becomes operational, subject to earlier termination
upon completion of the transition to the permanent system. The text of
the proposed rule change is available on the MSRB's Web site (http://www.msrb.org
), at the MSRB's principal office, and at the Commission's

Public Reference Room.
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    \3\ Municipal Securities Information Library and MSIL are
registered trademarks of the MSRB. The MSIL system's OS/ARD system
was initially approved by the Commission in 1991 and amended in 2001
to establish the current optional electronic submission system. See
Securities Exchange Act Release No. 29298 (June 13, 1991), 56 FR
28194 (June 19, 1991) (File No. SR-MSRB-1990-2); Securities Exchange
Act Release No. 44458 (June 20, 2001), 66 FR 34495 (June 28, 2001)
(File No. SR-MSRB-2001-03).
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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 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
    Rule G-36 requires that a broker, dealer or municipal securities
dealer (a ``dealer'') that acts as managing or sole underwriter for
most primary offerings of municipal securities send the official
statement (``OS'') and Form G-36(OS) to the MSIL system. In addition,
if the offering is an advance refunding and an escrow deposit agreement
or other advance refunding document (``ARD'') has been prepared, the
ARD and Form G-36(ARD) also must be sent to the MSIL system by the
managing or sole underwriter. OSs and ARDs collected by the MSIL system
currently are made available in paper form, subject to copying charges,
at the MSRB's public access facility in Alexandria, Virginia, and
electronically by paid subscription on a daily over-night basis and by
purchase of annual back-log collections.
    The proposed rule change will establish, on a pilot basis, an
Internet-based public access portal (the ``pilot portal'') to provide
free access to OSs and ARDs received by the MSRB under Rule G-36.
Copies of all such OSs and ARDs received by the MSRB on or after
implementation of the pilot portal will be made available to the public
as portable document format (PDF) files for viewing, printing and
downloading at the pilot portal promptly after

acceptance and processing, and will remain publicly available for the
life of the municipal securities through the pilot portal or the
permanent system. The pilot portal will provide on-line search
functions utilizing the MSIL system computer index to ensure that users
of the pilot portal are able to readily identify and access documents
that relate to specific municipal securities based on a broad range of
search parameters. The pilot portal will be designed to provide a user
searching for a particular municipal security with a comprehensive
display of relevant information concerning such security available from
the MSRB's various information systems on a single screen or related
set of screens. The pilot portal will provide basic identifying
information for the security, direct access to the OS submitted by the
underwriter to the MSIL system, price information from the MSRB's Real-
Time Transaction Reporting System (``RTRS'') for the most recent trades
in such security (as well as historical price information), and, if the
security has been advance refunded by a refunding issue, any ARDs
submitted by the underwriter to the MSIL system in connection with such
advance refunding.
    The pilot portal will operate for a limited period of time as the
MSRB transitions to a permanent integrated system for electronic
submissions of all OSs and ARDs to the MSRB and free public access to
such documents through a centralized Internet-based portal to be
implemented in conjunction with the expected adoption by the MSRB of an
``access equals delivery'' standard for OS dissemination under Rule G-
32, on disclosures in connection with new issues.\4\ The functions of
the pilot portal, along with other key features of the current MSIL
system and additional functional improvements (including but not
limited to establishment of real-time subscriptions to the complete
document collections processed through the permanent system for re-
dissemination or other use by subscribers), will be incorporated into
the permanent system. The permanent system is expected to replace the
MSIL system once this transition is completed and all critical
functions and information stores (including but not limited to the
complete OS/ARD back-log collection) of the MSIL system have been
transferred to the new permanent system or are able to be handled by
other Board processes.
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    \4\ Under current Rule G-32, a dealer selling a new issue
municipal security to a customer during the period ending 25 days
after bond closing must deliver the official statement to the
customer on or prior to trade settlement. Under an ``access equals
delivery'' standard, dealers selling most new issue municipal
securities would be deemed to have satisfied this basic requirement
for delivering OSs to customers by trade settlement since such OSs
would be publicly available through the permanent system. The MSRB
expects to propose amendments to Rules G-32 and G-36 to adopt an
``access equals delivery'' standard at a future date through a
separate filing with the SEC.
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    Although the MSRB currently operates CDINet, a service of the MSIL
system designed to process and disseminate continuing disclosure
information and notices of material events submitted to the MSRB under
Exchange Act Rule 15c2-12, the MSRB does not anticipate including
information received through CDINet in the pilot portal due to the very
limited level of submissions of disclosure information received by
CDINet from issuers and their agents.\5\ The MSRB believes that making
the limited collection of secondary market information available in
CDINet accessible to the public through the pilot portal would
represent a piecemeal approach that would not be beneficial to the
public and could potentially be misleading under certain circumstances.
In particular, investors would be required to search through various
other sources to find secondary market information for the bulk of the
outstanding issues for which information is not available through
CDINet and, even if some secondary market information for a particular
security is available through CDINet, investors would still need to
search through the various other sources to ensure that no additional
secondary market information about that security has been submitted
elsewhere.
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    \5\ Exchange Act Rule 15c2-12 currently requires underwriters
for most primary offerings of municipal securities to obtain an
undertaking by the issuer or obligated person to provide certain
types of continuing disclosure information to the marketplace,
consisting of material event notices and annual filings of financial
information. Annual filings are to be sent to all existing
nationally recognized municipal securities information repositories
(``NRMSIRs'') and any state information depositories (``SIDs''),
while material event notices may be sent either to all existing
NRMSIRs or to the MSRB, as well as to any SIDs. The level of
submissions of material event notices to the MSRB's CDINet has
diminished dramatically since this provision was adopted such that
CDINet receives only a small percentage of material event notices
currently provided to the marketplace. The Commission has published
proposed amendments to Exchange Act Rule 15c2-12 to eliminate the
MSRB's limited role in the current secondary market disclosure
system due in large measure to the low volume of usage as well as
the need for significant upgrades to keep the CDINet operational.
See Securities Exchange Act Release No. 54863 (December 4, 2006), 71
FR 71109 (December 8, 2006).
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    The MSRB recognizes the substantial benefits to the marketplace
that would be realized should the Commission determine to modify the
existing secondary market disclosure system under Exchange Act Rule
15c2-12 to provide for a centralized electronic submission and
dissemination model. The MSRB stands ready to expand its planned
electronic submission system under the permanent system to also serve
as the central electronic submission system for free filings of all
secondary market disclosure under an amended Rule 15c2-12 and to
integrate this complete collection of secondary market disclosure
information with the MSRB's OS/ARD collection and RTRS data to provide
a free comprehensive centralized public access portal for primary
market disclosure information, secondary market disclosure information
and transaction price information.
2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with
section 15B(b)(2)(C) of the Act,\6\ which provides that the MSRB's
rules shall:

    \6\ 15 U.S.C. 78o-4(b)(2)(C).
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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, to remove
impediments to and perfect the mechanism of a free and open market
in municipal securities, and, in general, to protect investors and
the public interest.

    The MSRB believes that the proposed rule change is consistent with
the Act because the pilot facility will serve as a necessary
transitional step toward establishing a permanent system for free and
timely public access to OSs and ARDs. Together, the pilot facility and
permanent system will remove impediments to and help perfect the
mechanisms of a free and open market in municipal securities, assist in
preventing fraudulent and manipulative acts and practices, and will in
general promote investor protection and the public interest by ensuring
equal access for all market participants to the critical disclosure
information needed by investors in the municipal securities market.

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 that is not necessary or appropriate in
furtherance of the purposes of the Act because documents and
information provided

through the pilot portal and the permanent system will be available to
all persons on an equal basis. The MSRB will continue to make the OS/
ARD collection available by subscription on an equal basis without
imposing restrictions on subscribers from re-disseminating such
documents or otherwise offering value-added services and products based
on such documents on terms determined by each subscriber. The MSRB
believes that any incidental impact of the proposed rule change on
commercial enterprises would not create an unequal burden among such
enterprises and would be substantially outweighed by the benefits
provided by the proposed rule change in removing impediments to and
helping to perfect the mechanisms of a free and open market in
municipal securities, assisting in the prevention of fraudulent and
manipulative acts and practices, and generally promoting investor
protection and the public interest.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

Concept Release

    In a concept release published on July 27, 2006, the MSRB sought
comment on whether the establishment of an ``access equals delivery''
model in the municipal securities market would be appropriate and on
the general parameters relating to such a model (the ``Concept
Release'').\7\ The Concept Release described two critical factors that
would need to be put into place: all OSs must be available
electronically, and such electronic OSs must be easily and freely
available to the public. The Concept Release described in general terms
certain modifications that could be made to existing MSRB rules to
implement the ``access equals delivery'' model.
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    \7\ MSRB Notice 2006-19 (July 27, 2006).
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    With regard to public access to OSs under an ``access equals
delivery'' standard for municipal securities, the Concept Release
stated that electronic OSs would need to be made readily available to
the investing public, at no cost, for the duration of the applicable
new issue disclosure period, at a minimum. The MSRB expressed the
belief that investors would be best served if such OSs were made
available at a centralized Internet website, although other parties
could of course make all or portions of such collection available at
other websites or through other means as well. In the alternative, a
central directory of such OSs could be maintained, with the actual
hosting of the electronic OS occurring by multiple parties (such as
issuers, financial advisors, underwriters, information vendors,
printers, etc.) that have undertaken to maintain free ready access to
such documents throughout the new issue disclosure period. However, the
MSRB observed that this second alternative would provide fewer
assurances that electronic access to the OSs will in fact be maintained
in a uniform manner for the required duration and likely would require
third-party monitoring of these decentralized sources. The MSRB also
sought comment on whether it should undertake the central access
function, or whether other market participants or vendors could
undertake such function subject to appropriate supervision.

January 2007 Notice

    In a subsequent notice published on January 25, 2007, the MSRB
sought comment on draft amendments to Rules G-32 and G-36 to implement
an electronic system for access to primary market disclosure in the
municipal securities market (the ``January 2007 Notice'').\8\ The
electronic system would build on the MSIL system to provide through an
Internet-based central access facility an assured source for free
access to OSs and other related documents and information in connection
with all new issue municipal securities to investors, other market
participants and the public. Additional public access portals using the
document collections from the MSIL system obtained through real-time
subscriptions could be established by other entities as parallel
sources for OSs and other documents and information.
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    \8\ MSRB Notice 2007-5 (January 25, 2007).
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    The MSRB noted in the January 2007 Notice that it would operate a
public access portal that would post OSs and other documents and
information directly on its centralized website and would make posted
information available for free for the life of the securities to
investors, other market participants and the general public. The MSRB
indicated that multiple entities subscribing to the MSIL system
document collection--which will be designed to provide nearly real-time
access to documents as they are submitted and processed--could
establish separate public access portals designed to make available
publicly the basic documents and information provided through such
subscription, together with such other documents, information and
utilities (e.g., indicative data, transaction pricing data, secondary
market information, analytic tools, etc.) as each such operator shall
determine. These separate portals could provide these services on such
commercial terms as they deem appropriate.
    The January 2007 Notice also stated that the MSRB intends to
continue offering subscriptions to the MSIL system collection on terms
that promote the broad dissemination of disclosure information
throughout the marketplace without creating a significant negative
impact on the pricing of dissemination services by subscribers. The
MSRB hoped that multiple public access portals would provide free
continuous access to OSs and other documents throughout the new issue
disclosure period and a reasonable limited period of time thereafter
and also would provide continuing access beyond the expiration of this
period on favorable terms, with due consideration for promoting access
by infrequent users (e.g., retail investors) for free or at greatly
reduced rates. The MSRB's goal in promoting the establishment of
parallel public access portals would be to provide all market
participants with a realistic opportunity to access OSs and other
documents and information throughout the life of the securities in a
non-cost prohibitive manner while encouraging market-based approaches
to meeting the needs of investors and other market participants.

SEC's ``Access Equals Delivery'' Rule

    The Concept Release and January 2007 Notice noted that the new
dissemination system for municipal securities disclosure would be
modeled in part on the ``access equals delivery'' rule for prospectus
delivery for registered securities offerings adopted by the SEC in
2005.\9\ The MSRB observed that issuers in the registered securities
market are required to file registration statements and prospectuses
electronically through the SEC's EDGAR (Electronic Data Gathering,
Analysis, and Retrieval) system prior to an offering. The EDGAR system
then makes electronic versions of filings available to the public at no
charge on a ``real-time'' basis through the SEC's website. As a result,
prospectuses for most registered offerings are available free of charge
at a centralized site (as well as through other information services,
in some

cases for a fee) throughout the selling process. The MSRB observed that
the SEC's ``access equals delivery'' standard is premised on, among
other things, this immediate free availability of prospectuses and
other filings through the EDGAR system and other electronic sources.
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    \9\ See Securities Act Release No. 8591 (July 19, 2005), 70 FR
44722 (August 3, 2005). The MSRB's draft amendments would
incorporate (with modifications adapted to the specific
characteristics of the municipal securities market) many of the key
``access equals delivery'' provisions in Securities Act Rule 172, on
delivery of prospectus, Rule 173, on notice of registration, and
Rule 174, on delivery of prospectus by dealers and exemptions under
Section 4(3) of the Securities Act of 1933, as amended.
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Discussion of Comments

    The MSRB received comments on the Concept Release from 29
commentators and on the January 2007 Notice from 12 commentators.\10\
Commentators were nearly unanimous in their support of adoption of an
``access equals delivery'' standard and the establishment of a
centralized Internet-based system for dissemination of municipal
securities disclosure.\11\ After reviewing these comments, the MSRB
approved the proposed rule change for filing with the SEC. The comments
relating to the dissemination system are discussed below.\12\ Document
Format. PDF was the preferred OS file format of most commentators
responding to the Concept Release.\13\ Some commentators suggested that
other OS formats also should be accepted,\14\ with Wells Fargo
emphasizing that PDF is the licensed product of a single software
vendor and, although popular, the municipal securities industry should
not encourage a situation that may require firms to purchase essential
technology from only one vendor. Other commentators stated that the
system should have the flexibility to allow new formats that may in the
future meet or exceed the current parameters for PDF.\15\ RMOA stated
that a single format should be prescribed, and other commentators
believed that allowing multiple formats could prove problematic.\16\
Zions stated that other electronic formats that may require specific
formatting, such as hypertext markup language (``html'') or ASCII
(American Standard Code for Information Interchange), would be
unacceptable. However, ADP noted that there may be benefits to market
participants in permitting Extensible Business Reporting Language
(``XBRL'') and TRB suggested that PDF does not permit analysis and
comparison between different investments. UBS observed that submissions
using files that originate electronically yield smaller, better quality
files than do scanned files, and that larger scanned files can
sometimes cause technological difficulties, particularly for smaller
retail customers. UBS suggested that the MSRB and industry remain
cognizant of any emerging, widely utilized, non-proprietary, freely
available format that would retain the desirable characteristics of PDF
documents but create smaller scanned files.
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    \10\ The MSRB received comments on the Concept Release from the
American Bar Association, Section of State and Local Government;
American Government Financial Services Company (``AGFS''); Automated
Data Process, Inc.; Bernardi Securities, Inc. (``Bernardi''); Bond
Market Association (``BMA''); brokersXpress, LLC
(``brokersXpress''); College Savings Plans Network (``CSPN'');
Commerce Bancshares, Inc. (``Commerce''); Digital Assurance
Certification LLC; DPC DATA Inc. (``DPC''); Edward D. Jones & Co.,
LP (``Edward Jones''); First Southwest Company (``First
Southwest''); Griffin, Kubik, Stephens & Thompson, Inc. (``Griffin
Kubik''); Investment Company Institute (``ICI''); J.J.B. Hilliard,
W.L. Lyons, Inc. (``Hilliard Lyons''); Morgan Keegan & Company, Inc.
(``Morgan Keegan''); Municipal Advisory Council of Texas (``Texas
MAC''); National Association of Bond Lawyers (``NABL''); National
Federation of Municipal Analysts (``NFMA''); Regional Municipal
Operations Association (``RMOA''); Securities Industry Association
(``SIA''); Standard & Poor's CUSIP Service Bureau (``S&PCUSIP'');
Daniel E. Stone; TRB Associates; UBS Securities LLC (``UBS''); UMB
Bank, N.A. (``UMB''); USAA Investment Management Company (``USAA'');
Wells Fargo Institutional Brokerage & Sales (``Wells Fargo''); and
Zions Bank Public Finance (``Zions''). The MSRB received comments on
the January 2007 Notice from American Municipal Securities, Inc.
(``AMS''); Bear, Stearns & Co., Inc. (``Bear Stearns''); Bernardi;
CSPN; DPC; Griffin Kubik; Ipreo Holdings LLC (``Ipreo''); NABL;
Securities Industry and Financial Markets Association (``SIFMA'');
Merry Jane Tissier; UMB; and Wulff, Hansen & Co. (``Wulff'').
    \11\ AGFS, AMS, Bear Stearns, Bernardi, BMA, brokersXpress,
CSPN, Commerce, DPC, Edward Jones, First Southwest, Griffin Kubik,
Hilliard Lyons, ICI, Ipreo, Morgan Keegan, Texas MAC, NABL, NFMA,
RMOA, SIA, SIFMA, S&P CUSIP, UBS, UMB, USAA, Wells Fargo, Wulff,
Zions. Although DPC supported the concept of electronic access to
OSs, it expressed concerns regarding several basic concepts
discussed in the January 2007 Notice, as discussed below. A number
of these commentators (e.g., ADP, AGFS, BMA, CSPN, Griffin Kubik,
ICI, Hilliard Lyons, RMOA, SIA), as well as Mr. Stone and Ms.
Tissier, made specific suggestions on details relating to the manner
of implementing the ``access equals delivery'' standard. See
footnote 12 infra. While supporting a central dissemination system
for OSs, TRB stated that it was unclear whether the proposal would
make any improvement on what it viewed as most important--the
availability of current information on all municipal bonds on an
ongoing basis.
    \12\ Comments relating to the draft amendments to Rules G-32 and
G-36 that would institute an ``access equals delivery'' standard to
replace the current physical delivery paradigm will be addressed in
the MSRB's expected rule filing relating to such amendments.
    \13\ Bernardi, BMA, brokersXpress, CSPN, Commerce, DPC, Edward
Jones, Griffin Kubik, Hilliard Lyons, Morgan Keegan, Texas MAC,
NABL, SIA, UBS, UMB, Wells Fargo, Zions.
    \14\ Bernardi, Wells Fargo.
    \15\ BMA, Edward Jones, Griffin Kubik, SIA, Texas MAC, UBS,
Zions.
    \16\ DPC, NABL, UBS, Zions.
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    The January 2007 Notice indicated that PDF would be the acceptable
document format, although the system would retain flexibility to permit
other appropriate file formats as they are developed and become
available for general public use. SIFMA, AMS, DPC, Ipreo and NABL
generally agreed with this approach. With regard to formats other than
PDF that may be developed in the future, NABL suggested the following
as basic parameters before permitting such format to be used for OSs:
(i) software to read files should be free, user-friendly and readily
available; (ii) software should protect the integrity of files; and
(iii) consumers should be familiar with the format before adoption.\17\
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    \17\ DPC suggested that required data elements accompanying
documents be captured in formatted fields and that such data be
parsed automatically into extensible markup language (XML) for
distribution. The current electronic submission process in the MSIL
system provides an option for XML uploads of such data and the MSRB
expects to continue providing this or similar capabilities in the
new system.
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    In addition, the MSRB supports the SEC's Interactive Data and XBRL
Initiatives for registered offerings. Although the MSRB will initially
accept documents into the pilot portal solely as PDF files and will not
be in a position to accept documents or data in XBRL format upon
initial launch of the pilot portal or the permanent system, the MSRB
will seek to explore with other industry participants the possibility
of incorporating into the permanent system at a later date an option to
make submissions using XBRL.

Duration of Availability of OSs On-Line and Impact on Commercial
Vendors

    Most commentators stated that OSs should remain publicly available
for the life of the securities.\18\ Some commentators noted that,
although financial and operating information in OSs quickly becomes
stale, many portions of the OS remain useful throughout the life of a
bond issue.\19\ BMA stated that the financial and operating information
included in the OS serve as valuable points of reference when reviewing
secondary market financial and operating information provided to
NRMSIRs pursuant to Rule 15c2-12.\20\ UBS suggested that appropriate
disclaimers be used with respect to the potential staleness of
information beyond the current new issue disclosure period. RMOA stated
that OSs could be made available for free during the 25 day new issue
disclosure period and a fee could be charged for access after that
period.
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    \18\ Bernardi, BMA, Griffin Kubik, Morgan Keegan, NABL, NFMA,
RMOA, SIA, Texas MAC, UBS, UMB, Wells Fargo, Zions.
    \19\ BMA, Griffin Kubik, NFMA, RMOA, SIA, Texas MAC, UBS.
    \20\ Griffin Kubik, SIA and UBS agreed.
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    Other commentators stated that making the OSs available solely for
the current 25 day new issue disclosure

period would be sufficient,\21\ with DPC stating that maintaining
public access beyond this 25-day period would impair the economic
interests of information vendors that currently make OSs available on a
commercial basis and would ultimately negatively impact the
marketplace.\22\ DPC stated that, although OSs may be made available
for free to those accessing them through a public access portal, there
will be a cost to the dealer community to subsidize the dissemination
system's development and operation. DPC further noted that having the
industry subsidize the cost ``appears to be more biased and unfair than
recovering the costs from the users of the system based on usage.''
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    \21\ brokersXpress, Commerce, DPC, First Southwest.
    \22\ DPC argued that some aspects of the system's operations as
proposed ``could be construed as interfering with standard
commercial processes of private businesses.'' DPC viewed the MSRB's
proposal in the January 2007 Notice that customer notices provide a
specific URL for the OS as ``prejudicial to the economic interests
of existing vendors whose delivery services required that the
definitive PDF file be archived on their web sites for public
access.'' DPC also did not approve of the proposal in the January
2007 Notice to the effect that a public access portal referred to in
the customer notice would need to provide free OS access to
customers for a limited period of time after issuance of the
securities, although the January 2007 Notice made clear that private
portal operators could provide value-added services, as well as
access to OSs after the initial free period, on such commercial
terms as they deem appropriate. Concerns regarding the potential
impact on existing commercial interests of the amendments necessary
to institute the ``access equals delivery'' standard will be
addressed in the MSRB's expected rule filing relating to such
amendments. See footnote 12 supra.
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    The MSRB agrees that there is significant value to maintaining OSs
available for the life of the securities and therefore will make OSs
available through the pilot portal and the permanent system until the
maturity of the securities. The MSRB also agrees with the approach
taken by the SEC in the registered securities market of providing such
access to disclosure at no charge to the public. The MSRB believes that
a free flow of basic disclosure information to all market participants
on an equal basis is essential to pursuing one of the MSRB's
congressionally mandated core functions of removing impediments to and
perfecting a free and open market in municipal securities. By making
these basic disclosure documents--most of which exist and are available
to commercial enterprises solely by virtue of the mandates set forth by
the SEC in its Rule 15c2-12--also available to the general public for
free, the MSRB does not in any way inhibit the free market in value-
added services based on such documents.
    OS Amendments and POSs. BMA noted that investors should be informed
of any amendments to an OS available on the system, and BMA and AGFS
suggested the possibility of highlighting changes made in such
amendments. BMA and DPC emphasized the importance of tracking and
properly linking amendments and the original OSs to which they relate.
    Some commentators suggested preliminary official statements
(``POSs'') should also be made available electronically through the
system.\23\ DPC suggested that the MSRB explore making the submission
of all POSs mandatory, while SIFMA, AMS and NABL emphasized that POS
submissions should not be made mandatory. SIFMA and DPC noted the
importance of ensuring version control where both POSs and OSs are made
available (as well as in handling ``stickers'' to OSs), suggesting that
the MSRB include a mechanism for notification to the public when the
final OS is posted in cases where a POS has previously been submitted.
DPC suggested that POSs be deleted when final OSs are submitted, while
NABL suggested that underwriters be permitted to request that the POS
be removed from the system once the ``timeliness of a POS has ended,''
noting that its continued availability may confuse investors. However,
SIFMA opposed the removal of the POS.
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    \23\ AMS, Bear Stearns, DPC, Griffin Kubik, Ipreo, NABL, SIFMA,
TRB, UMB, Zions.
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    The MSRB will continue to receive and will post all amendments to
OSs, with such amendments properly linked to the original OS. The MSRB
also intends to make POSs voluntarily submitted available on the
permanent system, but POSs are not expected to be available on the
pilot portal. Once POSs become part of the permanent system, the MSRB
expects to provide a feature that would alert investors who have
accessed an earlier version to be alerted of the posting of updated
information, such as where an OS is posted after an initial posting of
a POS or where a posted OS is subsequently stickered.
    Secondary Market Disclosure. Some commentators stated that
secondary market disclosures should be made available on the same
platform as OSs.\24\ ICI stated that the ``access equals delivery''
system should disseminate OSs to the NRMSIRs so that investors can view
OSs and secondary market disclosures at a single source.
---------------------------------------------------------------------------

    \24\ BMA, RMOA, Texas MAC, TRB, UBS.
---------------------------------------------------------------------------

    As noted above, the MSRB stands ready to expand its planned
electronic submission system under the permanent system to also serve
as the central electronic submission system for free filings of all
secondary market disclosure under an amended Rule 15c2-12 and to
integrate this complete collection of secondary market disclosure
information with the MSRB's OS/ARD collection and RTRS data to provide
a free comprehensive centralized public access portal for primary
market disclosure information, secondary market disclosure information
and transaction price information, should the SEC determine to pursue
such option.
    Basic Identifying Information and Search Function. Some
commentators suggested that the information submitted on Form G-36(OS)
should be made available to the public.\25\ UBS noted that Form G-36
data should be used to develop a flexible indexing system, perhaps
using XML, to allow for searches on a broad range of fields. NFMA also
emphasized the importance of the search function. TRB stated that a
cover sheet including primary information such as issuer, CUSIP
numbers, security, maturity dates, ratings, callability, etc. is
needed. TRB believed that the task of creating a data base from such
information that is available to investors would be the most
significant contribution that could be made by the MSRB to the
municipal marketplace.
---------------------------------------------------------------------------

    \25\ BMA, RMOA, TRB.
---------------------------------------------------------------------------

    As noted above, the MSRB will use its MSIL indexing data to provide
appropriate identifying information on the pilot portal and to develop
a robust search function to facilitate quickly finding the appropriate
document on the system.
    Method of Posting Documents. Nearly all commentators stated that
the central access facility should post OSs directly on a central
website, rather than serving as a directory of links to OSs posted by
underwriters, issuers, financial advisors, printers or others at other
sites.\26\ Some commentators noted that a decentralized system with a
central hyperlinked directory could be problematic with regard to
ensuring continuous access, uniformity of handling and ease of use.\27\
Morgan Keegan stated that a decentralized model could be acceptable if
access and data input requirements are uniformly applied to all
vendors, but that long-term free access would be problematic. TRB
stated that it would be more

effective to link the MSRB website to the appropriate posting site for
each OS, with the MSRB monitoring and/or restricting these posting
sites, ``just as it does for the NRMSIRs.'' CSPN noted that it viewed
its own centralized web-based disclosure utility for the 529 college
savings plan market as the appropriate central access facility for that
market.
---------------------------------------------------------------------------

    \26\ Bernardi, BMA, brokersXpress, Commerce, DPC, First
Southwest, Griffin Kubik, Hilliard Lyons, ICI, Morgan Keegan, NABL,
NFMA, RMOA, SIA, Texas MAC, UBS, Wells Fargo, Zions.
    \27\ BMA, brokersXpress, DPC, Griffin Kubik, ICI, NFMA, SIA,
UBS, Zions.
---------------------------------------------------------------------------

    As noted above, the MSRB will post OSs and related items directly
on its central access portal, rather than merely posting hyperlinks to
other sources.
    Operation of Public Access Sites. AMS and UMB generally supported a
single central access portal, while SIFMA, DPC, Ipreo, and NABL
prefered that OSs be made available from multiple sources. Many
commentators felt that the MSRB could operate the central access
facility,\28\ with several indicating that the MSRB is their first
choice to do so.\29\ Many commentators suggested that the central
access facility also could be operated by an outside contractor with
oversight by the MSRB pursuant to contract.\30\ Wells Fargo stated that
the MSRB should investigate a centralization function that will not
unequally empower a single data vendor.
    Several private sector organizations expressed interest in their
comment letters in participating in the proposed electronic
dissemination system.\31\ NABL stated that proposed approaches by
market participants and others will need careful consideration to
determine the optimal choice for the municipal securities market, and
RMOA stated that vendors offering their services would need to insure
the industry that they would accept oversight by established regulatory
authorities and would be subject to penalties for non-performance. UBS
stated that, if an entity other than the MSRB operates the central
access facility, the MSIL system's existing OS/ARD library and full
database would need to be made available to such entity. Several
commentators emphasized that, in deciding which entity should operate
the central access facility, cost should be an important factor,
including which parties should bear such costs.\32\
---------------------------------------------------------------------------

    \28\ Bernardi, BMA, Commerce, First Southwest, Griffin Kubik,
Hilliard Lyons Morgan Keegan, NFMA, RMOA, SIA, UBS, Zions.
    \29\ Bernardi, Commerce, Hilliard, Lyons, Morgan Keegan, RMOA,
UBS, Zions. Morgan Keegan noted that the industry has already paid
to establish the MSIL system and that the additional expense can be
covered at the MSRB's discretion.
    \30\ BMA, First Southwest, Griffin Kubik, NMFA, RMOA, SIA, Texas
MAC, UBS.
    \31\ ADP, DPC, S&P CUSIP and Texas MAC.
    \32\ BMA, Griffen Kubik, SIA, UBS.
---------------------------------------------------------------------------

    Although the MSRB has determined to establish the pilot portal and
expects to transition such pilot portal to the permanent system, the
MSRB's public access portal need not operate as the sole public access
facility. Rather, multiple entities that subscribe to the MSIL system
document collection--which will be designed to provide nearly real-time
access to documents--could establish separate access portals to make
available publicly the basic documents and information provided through
the MSIL system subscription, together with such other documents,
information and utilities (e.g., indicative data, transaction pricing
data, secondary market information, analytic tools, etc.) as each
operator determines. These separate public access portals could provide
these services on commercial terms. The MSRB would hope that multiple
public access portals would provide free continuous access to OSs for a
defined period after initial issuance and continuing access beyond this
period on favorable terms, with due consideration for promoting access
by infrequent users (e.g., retail investors) for free or at greatly
reduced rates. The MSRB's goal in promoting the establishment of
parallel public access portals is to provide market participants with
an effective opportunity to access OSs throughout the life of the
securities in a non-cost prohibitive manner while encouraging market-
based approaches to meeting the needs of investors and other
participants in the municipal securities market.

III. Date Of Effectiveness Of The Proposed Rule Change And Timing For
Commission Action

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule
change should be disapproved.

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 e-mail to<EMAIL_ADDRESS>Please include

File Number SR-MSRB-2007-06 on the subject line.

Paper Comments:

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR--MSRB-2007-06. This file
number should be included on the subject line if e-mail 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 inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the MSRB. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-MSRB-2007-06 and should be
submitted on or before January 18, 2008

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
---------------------------------------------------------------------------

    \33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-25186 Filed 12-27-07; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 123 (Monday, June 27, 2011)]
[Notices]
[Pages 37386-37388]
[FR Doc No: 2011-15916]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64715; File No. SR-NASDAQ-2011-084]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Amend NASDAQ Rule 4763

June 21, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 15, 2011, The NASDAQ Stock Market LLC (the ``Exchange'' or
``NASDAQ'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange is filing this proposed rule change to amend NASDAQ
Rule 4763 to modify the Exchange's procedures for early termination of
the short sale price test restrictions of Rule 201 of Regulation SHO.
The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com/, at NASDAQ'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 Exchange 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 Exchange 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
    On February 26, 2010, the Commission adopted amendments to

Rules 200(g) and 201 of Regulation SHO.\3\ The amendments became
effective on May 10, 2010, and compliance was required by February 28,
2011.\4\ The amendments to Rule 201 require trading centers \5\ such as
NASDAQ to establish, maintain, and enforce certain written policies and
procedures reasonably designed to comply with the rule.\6\ NASDAQ is
proposing to amend NASDAQ Rule 4763 to modify the Exchange's procedures
for early termination of the short sale price test restrictions of Rule
201 based on a triggering transaction that another exchange or SRO has
determined was a clearly erroneous execution pursuant to the rules of
that exchange or SRO.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 61595 (February 26,
2010), 75 FR 11232 (March 10, 2010) (File No. S7-08-09; Amendments
to Regulation SHO) (``Rule 201 Adopting Release''). In the Rule 201
Adopting Release, the Commission also adopted amendments to Rule
200(g) of Regulation SHO to include a ``short exempt'' marking
requirement. 17 CFR 242.200(g).
    \4\ See Securities Exchange Act Release No. 63247 (November 4,
2010), 75 FR 68702 (November 9, 2010) (File No. S7-08-09).
    \5\ Rule 201(a)(9) states the term ``trading center'' will have
the same meaning as in Rule 600(b)(78). 17 CFR 242.201(a)(9). Rule
600(b)(78) of Regulation NMS defines a ``trading center'' as ``a
national securities exchange or national securities association that
operates an SRO trading facility, an alternative trading system, an
exchange market maker, an OTC market maker, or any other broker or
dealer that executes orders internally by trading as principal or
crossing orders as agent.'' 17 CFR 242.600(b)(78).
    \6\ See 17 CFR 242.201(b). As a general matter, Rule 201
requires trading centers to establish, maintain, and enforce written
policies and procedures reasonably designed to prevent the execution
or display of a short sale order of a covered security at a price
that is less than or equal to the current national best bid if the
price of that covered security decreases by 10% or more from the
covered security's prior day's closing price. 17 CFR
242.201(b)(1)(i).
---------------------------------------------------------------------------

    Under NASDAQ Rule 4763(d), Duration of Short Sale Price Test, once
triggered, the short sale price test restriction shall remain in effect
until the next trading day when a national best bid for the covered
security is calculated and disseminated on a current and continuing
basis by a plan processor pursuant to an effective national market
system plan,\7\ as provided for in Rule 201(b)(1)(ii) (the ``Short Sale
Period''). The duration of the Short Sale Period may differ under two
different scenarios provided for in Rule 4763.\8\ First, if the
Exchange determines pursuant to NASDAQ Rule 4763(d)(1) that the short
sale price test restriction for a covered security was triggered
because of a clearly erroneous execution,\9\ NASDAQ may lift the short
sale price test restriction before the Short Sale Period ends for
covered securities for which the Exchange is the listing market.\10\
Second, if NASDAQ determines pursuant to NASDAQ Rule 4763(d)(2) that
the prior day's closing price for a covered security is incorrect in
the System and resulted in an incorrect determination of the Trigger
Price,\11\ the Exchange may correct the prior day's NASDAQ official
closing price and lift the short sale price test restriction before the
Short Sale Period ends.
---------------------------------------------------------------------------

    \7\ See 17 CFR 242.201(b)(1)(ii). See also Division of Trading
and Markets: Responses to Frequently Asked Questions Concerning Rule
201 of Regulation SHO, Q&A No. 2.1.
    \8\ In addition, if the price of a covered security declines
intra-day by at least 10% on a day on which the security is already
subject to the short sale price test restriction of Rule 201, the
restriction will be re-triggered and, therefore, will continue in
effect for the remainder of that day and the following day. See Rule
201 Adopting Release, 75 FR at 11253, n. 290. In addition, Rule 201
does not place any limit on the frequency or number of times the
circuit breaker can be re-triggered with respect to a particular
stock. See Division of Trading and Markets: Responses to Frequently
Asked Questions Concerning Rule 201 of Regulation SHO, Q&A No. 2.2.
    \9\ See NASDAQ Rule 4762 which cross-references NASDAQ Rule
11890 for the standard of determining when a trade is ``clearly
erroneous.'' The terms of a transaction executed on NASDAQ are
``clearly erroneous'' when there is an obvious error in any term,
such as price, number of shares or other unit of trading, or
identification of the security. A transaction made in clearly
erroneous error and cancelled by both parties or determined by
NASDAQ to be clearly erroneous will be removed from the consolidated
tape.
    \10\ See 17 CFR 242.201(a)(3).
    \11\ The term ``Trigger Price'' is used in Rule 4763(b) to refer
to a decrease of 10% or more in a security's price from the
security's closing price on the listing market at the end of regular
trading hours on the prior day.
---------------------------------------------------------------------------

    For securities for which the Exchange is the listing market, NASDAQ
Rule 4763 currently addresses only clearly erroneous triggering
transactions deemed to be clearly erroneous executions under the
Exchange's rules, and does not address situations where another
exchange or SRO determines, under its respective rules, that a
triggering transaction was a clearly erroneous execution. To address
this scenario, the Exchange proposes to amend NASDAQ Rule 4763(d) to
provide that the Exchange may also lift the short sale price test
restrictions before the Short Sale Period ends, for covered securities
for which the Exchange is the listing market, if the Exchange has been
informed by another exchange or SRO that a transaction in the covered
security that occurred at the Trigger Price was a clearly erroneous
execution, as determined by that exchange or SRO under its rules.\12\
---------------------------------------------------------------------------

    \12\ The Exchange will only lift the short sale price test
restrictions before the Short Sale Period ends under these
circumstances when informed by another exchange or SRO that a
triggering transaction has been determined to be a clearly erroneous
execution under the rules of the exchange or SRO, consistent with
the authority of that exchange or SRO for making such
determinations.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\13\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\14\ in particular, in that it is designed to, among
other things, prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, and, in general, to
protect investors and the public interest. The proposal is designed to
refine the Exchange's written policies and procedures reasonably
designed to prevent the execution or display of a short sale order of a
covered security in violation of the short sale price test restrictions
established in NASDAQ Rule 4763 and Rule 201. To that end, the proposed
rule change expands the ability of the Exchange, as a listing market,
to lift short sale price test restrictions to include situations where
the Exchange has been informed by another exchange or SRO that a
transaction in the covered security that occurred at the Trigger Price
was a clearly erroneous execution, as determined by that exchange or
SRO under its rules.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. Rather, the change
will promote greater competition by allowing NASDAQ to adopt
functionality already in use at competing national securities
exchanges.

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.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has

become effective pursuant to Section 19(b)(3)(A) of the Act \15\ and
Rule 19b-4(f)(6) thereunder.\16\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
    A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\17\
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest.\18\ NASDAQ has requested that the
Commission waive the 30-day operative delay so that the proposed rule
change may become effective and operative immediately upon filing,
pursuant to Section 19(b)(3)(A) of the Act \19\ and Rule 19b-4(f)(6)
\20\ thereunder. The Exchange believes that waiver of the delayed
operative date is appropriate because the proposed rule change is
consistent with the original objective of Rule 4763 (i.e., to permit
the Exchange to lift the short sale price test restrictions before the
end of a Short Sale Period in the event of a clearly erroneous
triggering trade). Specifically, the current rule only addresses
triggering transactions deemed to be clearly erroneous executions under
the Exchange's rules. The proposed change would permit the Exchange to
lift the short sale price test restrictions before the Short Sale
Period ends, for covered securities for which the Exchange is the
listing market, if the Exchange has been informed by another exchange
or SRO that a transaction in the covered security that occurred at the
Trigger Price was a clearly erroneous execution, as determined by that
exchange or SRO under its rules.
---------------------------------------------------------------------------

    \17\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self regulatory organization submit to
the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change, at least five business days prior to the date of filing
of the proposed rule change, or such shorter time as designated by
the Commission. The Exchange has satisfied this requirement.
    \18\ Id.
    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    The Exchange believes that this proposal is ``non-controversial''
because it merely seeks to implement additional protections against the
triggering of short sale price test restrictions based on transactions
determined by an exchange or SRO to be clearly erroneous executions
under the rules of that exchange or SRO. For the foregoing reasons,
this rule filing qualifies for immediate effectiveness as a
``noncontroversial'' rule change under paragraph (f)(6) of Rule 19b-
4.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    The Commission has considered the Exchange's request to waive the
30-day operative delay, and hereby grants the request.\22\ The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest, as
it will permit the Exchange to lift the short sale price test
restrictions of Rule 201, in a covered security for which the Exchange
is the listing market, when such restrictions were triggered by a
transaction that another exchange or SRO has determined to be a clearly
erroneous execution, under the rules of that exchange or SRO. For this
reason, the Commission designates the proposed rule change to be
operative upon filing.
---------------------------------------------------------------------------

    \22\ For the purposes only of waiving the 30-day operative delay
of this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. See 15
U.S.C. 78c(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2011-084 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2011-084. This
file number should be included on the subject line if e-mail 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 on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of such filing also will be available for inspection and copying at the
principal offices of the Exchange. 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-NASDAQ-2011-084, and
should be submitted on or before July 18, 2011.
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-15916 Filed 6-24-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 124 (Wednesday, June 27, 2012)]
[Notices]
[Pages 38301-38302]
[FR Doc No: 2012-15719]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2012-N-0369]

Agency Information Collection Activities; Submission for Office
of Management and Budget Review; Comment Request; Regulations Under the
Federal Import Milk Act

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) is announcing that a
proposed collection of information has been submitted to the Office of
Management and Budget (OMB) for review and clearance under the
Paperwork Reduction Act of 1995.

DATES: Fax written comments on the collection of information by July
27, 2012.

ADDRESSES: To ensure that comments on the information collection are
received, OMB recommends that written comments be faxed to the Office
of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer,
Fax:<PHONE_NUMBER>, or emailed to<EMAIL_ADDRESS>All
comments should be identified with the OMB control number 0910-0212.
Also include the FDA docket number found in brackets in the heading of
this document.

FOR FURTHER INFORMATION CONTACT: Domini Bean, Office of Information
Management, Food and Drug Administration, 1350 Piccard Dr., PI50-400T,
Rockville, MD 20850,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has
submitted the following proposed collection of information to OMB for
review and clearance.

Regulations Under the Federal Import Milk Act--21 CFR Part 1210 (OMB
Control Number 0910-0212)--Extension

    Under Federal Import Milk Act (FIMA) (21 U.S.C. 141-149), milk or
cream may be imported into the United States only by the holder of a
valid import milk permit (21 U.S.C. 141). Before such permit is issued:
(1) All cows from which import milk or cream is produced must be
physically examined and found healthy; (2) if the milk or cream is
imported raw, all such cows must pass a tuberculin test; (3) the dairy
farm and each plant in which the milk or cream is processed or handled
must be inspected and found to meet certain sanitary requirements; (4)
bacterial counts of the milk at the time of importation must not exceed
specified limits; and (5) the temperature of the milk or cream at time
of importation must not exceed 50 [deg]F (21 U.S.C. 142).
    FDA's regulations in part 1210 (21 CFR part 1210) implement the
provisions of FIMA. Sections 1210.11 and 1210.14 require reports on the
sanitary conditions of, respectively, dairy farms and plants producing
milk and/or cream to be shipped to the United States. Section 1210.12
requires reports on the physical examination of herds, while Sec.
1210.13 requires the reporting of tuberculin testing of the herds. In
addition, the regulations in part 1210 require that dairy farmers and
plants maintain pasteurization records (Sec.  1210.15) and that each
container of milk or cream imported into the United States bear a tag
with the product type, permit number, and shipper's name and address
(Sec.  1210.22). Section 1210.20 requires that an application for a
permit to ship or transport milk or cream into the United States be
made by the actual shipper. Section 1210.23 allows permits to be
granted based on certificates from accredited officials.
    In the Federal Register of April 20, 2012 (77 FR 23732), FDA
published a 60-day notice requesting public comment on the proposed
collection of information. FDA received one letter in response to the
notice. The letter contained one relevant comment, while additional
comments were outside the scope of the four collection of information
topics on which the notice solicits comments and will not be discussed
in this document.
    (Comment 1) One comment suggested that ``huge bureaucratic expenses
created by the usa [sic] for 2 forms'' for taxpayers.
    (Response) While FDA appreciates the comment, the commenter did not
specify which two forms might create an undue expense for taxpayers.
Each form relating to this information collection request is necessary
for the proper performance of FDA's functions. FDA has examined each
form related to this information collection request to assure its
efficiency.
    FDA estimates the burden of this collection of information as
follows:

                                 Table 1--Estimated Annual Reporting Burden \1\
----------------------------------------------------------------------------------------------------------------
                                                     Number of
21 CFR Section      Form No.         Number of     responses per   Total annual   Average burden    Total hours
                                    respondents     respondent       responses     per response
----------------------------------------------------------------------------------------------------------------
1210.11.......  FDA 1996/                      2             200             400             1.5             600
                 Sanitary
                 inspection of
                 dairy farms.
1210.12.......  FDA 1995/                      1               1               1             0.5             0.5
                 Physical
                 examination of
                 cows.
1210.13.......  FDA 1994/                      1               1               1             0.5             0.5
                 Tuberculin test.
1210.14.......  FDA 1997/                      2               1               2               2               4
                 Sanitary
                 inspections of
                 plants.
1210.20.......  FDA 1993/                      2               1               2             0.5               1
                 Application for
                 permit.
1210.23.......  FDA 1815/Permits               2               1               2             0.5               1
                 granted on
                 certificates.
               -------------------------------------------------------------------------------------------------

    Total.....  ................  ..............  ..............  ..............  ..............             607
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

                                                    Table 2--Estimated Annual Recordkeeping Burden\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Number of                       Average burden
                           21 CFR Section                               Number of       records per      Total annual         per          Total hours
                                                                      recordkeepers     recordkeeper       records       recordkeeping
--------------------------------------------------------------------------------------------------------------------------------------------------------
1210.15............................................................               2                1                2             0.05             0.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of information.

    The estimated number of respondents and hours per response are
based on FDA's experience with the import milk permit program and the
average number of import milk permit holders over the past 3 years. FDA
estimates that 2 respondents will submit approximately 200 Form FDA
1996 reports annually, for a total of 600 responses. FDA estimates the
reporting burden to be 1.5 hours per response, for a total burden of
607 hours.
    The Secretary of Health and Human Services has the discretion to
allow Form FDA 1815, a duly certified statement signed by an accredited
official of a foreign government, to be submitted in lieu of Forms FDA
1994 and 1995. To date, Form FDA 1815 has been submitted in lieu of
these forms. Because FDA has not received any Forms FDA 1994 and 1995
in the last 3 years, the Agency estimates no more than one will be
submitted annually. FDA estimates the reporting burden for each to be
0.5 hours per response for a total burden reporting burden of 0.5 hours
each.
    FDA estimates that two respondents will submit one Form FDA 1997
report annually, for a total of two responses. FDA estimates the
reporting burden to be 2.0 hours per response, for a total burden of 4
hours. FDA estimates that two respondents will submit one Form FDA 1993
report annually, for a total of two responses. FDA estimates the
reporting burden to be 0.5 hours per response, for a total burden of 1
hour. FDA estimates that two respondents will submit one Form FDA 1815
report annually, for a total of two responses. FDA estimates the
reporting burden to be 0.5 hours per response, for a total burden of 1
hour.
    With regard to records maintenance, FDA estimates that
approximately two recordkeepers will spend 0.05 hours annually
maintaining the additional pasteurization records required by Sec.
1210.15, for a total of 0.10 hours annually.
    No burden has been estimated for the tagging requirement in Sec.
1210.22 because the information on the tag is either supplied by FDA
(permit number) or is disclosed to third parties as a usual and
customary part of the shipper's normal business activities (type of
product, shipper's name and address). Under 5 CFR 1320.3(c)(2), the
public disclosure of information originally supplied by the Federal
Government to the recipient for the purpose of disclosure to the public
is not a collection of information. Under 5 CFR 1320.3(b)(2)), the
time, effort, and financial resources necessary to comply with a
collection of information are excluded from the burden estimate if the
reporting, recordkeeping, or disclosure activities needed to comply are
usual and customary because they would occur in the normal course of
business activities.

    Dated: June 22, 2012.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2012-15719 Filed 6-26-12; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 76, Number 250 (Thursday, December 29, 2011)]
[Notices]
[Pages 82008-82009]
[FR Doc No: 2011-33379]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66037; File No. SR-Phlx-2011-177]

 Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Modify
Fees Applicable to the Trading of NMS Stocks Through NASDAQ OMX PSX

December 22, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 16, 2011, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to modify the fees applicable to trading of
NMS stocks through NASDAQ OMX PSX (``PSX''). The text of the proposed
rule change is available on the Exchange's Web site at http://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/Filings/ com/NASDAQOMXPHLX/Filings/, at the
principal office of the Exchange, on the Commission's Web site at
http://www.sec.gov/, 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 Exchange 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 Exchange 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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing to modify order execution fees applicable
to use of PSX. The Commission recently approved PSX's new Minimum Life
Order type,\3\ and this filing is designed to establish rebates
applicable to its use. A Minimum Life Order is a Displayed Order that
may not be cancelled for a period of 100 milliseconds following its
entry. Because a party entering a Minimum Life Order incurs a degree of
risk due to its inability to cancel the order for a period of time, the
Exchange believes that it is appropriate to encourage use of the order
through an enhanced liquidity provider rebate for such orders when they
provide liquidity. The Exchange believes that it is appropriate to
encourage use of the order type because it is intended to promote
greater stability in the quotes available at PSX, thereby encouraging
more market participants to direct orders to PSX in an effort to
interact with its quotes. The Exchange thereby seeks to increase both
its market share and its market quality.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 65926 (December 9,
2011), 76 FR 78057 (December 15, 2011) (SR-Phlx-2011-141).
---------------------------------------------------------------------------

    Currently, the Exchange offers a rebate of $0.0026 per share
executed for Displayed Orders with an original order size of 2,000 or
more shares, but only $0.0024 for Displayed Orders with an original
order size of less than 2,000. The rebate for Non-Displayed Orders is
$0.0010 per share executed. PSX proposes also to offer the higher
rebate of $0.0026 per share executed to Minimum Life Orders that
provide liquidity.\4\ PSX believes that the Minimum Life Order, with
its goal of promoting more stable quotes, is complementary to PSX's
goal of encouraging quotes with greater displayed size.
---------------------------------------------------------------------------

    \4\ As is the case with other liquidity-providing orders, no
rebate is paid with respect to securities priced at less than $1 per
share.
---------------------------------------------------------------------------

    When a Minimum Life Order executes against an existing quote,
rather than posting and providing liquidity, the market participant
will pay the same fee ($0.0027 per share executed, or 0.20% of the
total transaction cost for securities priced at less than $1 per share)
that applies to all other liquidity-accessing orders.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\5\ in general, and with
Section 6(b)(4) of the Act,\6\ in particular, in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility or
system which the Exchange operates or controls. Specifically, the
Exchange believes that the proposed rebate for Minimum Life Orders is
reasonable because it is set at a level comparable to the existing
rebate for orders with an original displayed size of 2,000 or more
shares. The Exchange further believes that the proposal reflects an
equitable allocation of fees, as all similarly situated member
organizations will be subject to the same fee structure, and access to
the Exchange's market is offered on fair and non-discriminatory terms.
The Exchange further believes that it is equitable to pay a high rebate
with respect to Minimum Life Orders, because (i) a market participant
incurs a risk when it enters the order, which may not be cancelled for
a period of time, and (ii) the Exchange expects that the higher rebate
will promote its goal of encouraging display of more stable quotes that
attract more order flow to the Exchange.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues if they
deem fee levels at a particular venue to be excessive. The Exchange
believes that its fees continue to be reasonable and equitably
allocated to members on the basis of whether they opt to direct orders
to the Exchange and thereby make use of its order execution services.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended.
Because the market for order execution and routing is extremely
competitive, members may readily favor the Exchange's competitors in
making order routing decisions to the extent that they deem PSX's fees
to be excessive. Moreover, the Exchange believes that the proposal will
enhance competition through its use of pricing incentives to draw
greater order flow to PSX.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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.\7\ 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. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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_ADDRESS>Please include
File No. SR-Phlx-2011-177 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File No. SR-Phlx-2011-177. 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
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. 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 No. SR-Phlx-2011-177 and should be
submitted on or before January 19, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-33379 Filed 12-28-11; 8:45 am]
BILLING CODE 8011-01-P