[Federal Register Volume 76, Number 39 (Monday, February 28, 2011)]
[Notices]
[Pages 10926-10935]
[FR Doc No: 2011-4391]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63946; File No. SR-MSRB-2011-03]

 Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing of Amendments to Rule G-23, on Activities of
Financial Advisors

February 22, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``the Act'' or ``the ``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ notice is hereby given that on February 9, 2011, the
Municipal Securities Rulemaking Board (``Board'' or ``MSRB'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I and II below, which
Items have been 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 SEC a proposed rule change consisting
of (i) proposed amendments to Rule G-23 (activities of financial
advisors) and (ii) a proposed interpretation of Rule G-23 (the
``proposed interpretive notice''). The MSRB requests that the proposed
rule change be made effective for new issues for which the Time of
Formal Award (as defined in Rule G-34(a)(ii)(C)(1)(a)) occurs more than
six (6) months after SEC approval to allow issuers of municipal
securities time to finalize any outstanding transactions that might be
affected by the proposed rule change.
    The text of the proposed rule change is available on the MSRB's Web
site at http://www.msrb.org/Rules-and-Interpretations/SEC-Filings/2011-Filings.aspx, at the MSRB's principal office, and at the Commission's
Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the MSRB included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Board 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
    (a) Currently Rule G-23, on activities of financial advisors, sets
forth the circumstances under which a broker, dealer, or municipal
securities dealer (``dealer'') acting as a financial advisor to an
issuer with respect to a new issue or issues of municipal securities
(``dealer financial advisor'') may acquire all or any portion of such
issue, directly or indirectly, from the issuer as a principal, or may
act as agent for the issuer in arranging the placement of such issue,
either alone or as a participant in a syndicate or other similar
account formed for that purpose. For negotiated transactions, Rule G-
23(d)(i) requires that: (i) The dealer terminate the financial advisory
relationship with regard to the issue and at or after such termination
the issuer expressly consent in writing to such acquisition or
participation; (ii) at or before such termination, the dealer disclose
in writing to the issuer that there may be a conflict of interest in
changing from the capacity of financial advisor to that of purchaser of
or placement agent for the securities and the issuer expressly
acknowledges in writing to the dealer receipt of such disclosure; and
(iii) the dealer disclose in writing to the issuer at or before such
termination the source and anticipated amount of all remuneration to
the dealer with respect to such issue and the issuer expressly
acknowledge in writing to the dealer receipt of such disclosure. With
respect to issues sold by competitive bid, Rule G-23(d)(ii) provides
that a financial advisor must obtain the issuer's written consent prior
to making a bid for the issue.
    The limitations of Rule G-23(d) also apply to affiliates of the
dealer financial advisor; however, they do not apply to purchases by
dealer financial advisors of securities from an underwriter, either for
the account of the dealer financial advisor or for the account of
customers of the dealer financial advisor, except to the extent that
such purchases are made to contravene the purpose and intent of the
rule.
    In addition, Rule G-23(e) provides that a dealer that has a
financial advisory relationship with respect to a new issue of
municipal securities may not act as agent for the issuer in remarketing
such issue unless the dealer has disclosed in writing to the issuer:
(i) That there may be a conflict of interest in acting as both
financial advisor and remarketing agent for the securities; and (ii)
the source and basis of the remuneration the dealer could earn as
remarketing agent on such issue. The dealer must receive from the
issuer its express acknowledgement, in writing, of its receipt of such
disclosure and its consent to the financial advisor acting in both
capacities along with the source and basis of remuneration.
    The proposed amendments would, subject to the exceptions described
below, (i) prohibit a dealer financial advisor with respect to the
issuance of municipal securities from acquiring all or any portion of
such issue directly or indirectly, from the issuer as principal, or
acting as agent for the issuer in arranging the placement of such
issue, either alone or as a participant in a syndicate or other similar
account formed for that purpose; (ii) apply the same prohibition to any
dealer controlling, controlled by, or under common control with the
dealer financial advisor; and (iii) prohibit a dealer financial advisor
from acting as the remarketing agent for such issue.
    The proposed amendments would not prohibit: (i) A dealer financial
advisor from placing an issuer's entire issue with another governmental
entity, such as a bond bank, as part of a plan of financing by such
entity for or on behalf of the dealer financial advisor's issuer
client; \3\ (ii) a dealer financial advisor from serving as successor
remarketing agent to an issuer for the same issue with respect to which
it provided financial advisory services if the financial advisory
relationship with the issuer had been terminated for at least

one (1) year; or (iii) a dealer financial advisor from purchasing such
securities from an underwriter, either for its own trading account or
for the account of its customers, except to the extent that such
purchase was made to contravene the purpose and intent of the rule.
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    \3\ The exception would only apply if the dealer financial
advisor did not receive compensation for the placement of such issue
and the dealer financial advisor was not compensated as an
underwriter in connection with any related transaction undertaken by
the governmental entity with which such issue is placed.
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    The proposed amendments would change references in Rule G-23 to ``a
new issue or issues of municipal securities'' to ``the issuance of
municipal securities'' to conform the language of the rule to the
language used in Section 15B of the Act, as amended by the Dodd-Frank
Wall Street Reform and Consumer Protection Act (``Dodd-Frank''). This
change in language is not intended to change the meaning or operation
of Rule G-23.
    The proposed amendments would also amend Rule G-23(b) to remove the
requirement that financial advisory services be provided for
compensation. This change is also proposed to conform the rule to the
provisions of Section 15B of the Act as amended by Dodd-Frank, which
does not require that financial advisors receive compensation in order
to be considered ``municipal advisors.''
    The proposed interpretive notice would provide guidance on when a
dealer that provides advice to an issuer would be considered to be
``acting as an underwriter'' for purposes of Rule G-23(b), rather than
a financial advisor. Under the proposed guidance, a dealer providing
advice to an issuer with respect to the issuance of municipal
securities (including the structure, timing, and terms of the issue and
other similar matters, such as the investment of bond proceeds, a
municipal derivative, or other matters integrally related to the issue)
generally would not be viewed as a financial advisor for purposes of
Rule G-23, if such advice is rendered in its capacity as underwriter
for such issue and the dealer clearly identifies itself as an
underwriter from the earliest stages of its relationship with the
issuer with respect to that issue. Nevertheless, a dealer's subsequent
course of conduct (e.g., representing to the issuer that it is acting
only in the issuer's best interests, rather than as an arm's length
counterparty, with respect to that issue) could cause the dealer to be
considered a financial advisor with respect to such issue and such
dealer would be precluded from underwriting that issue by Rule G-23(d).
    The proposed rule change resulted from a concern that a dealer
financial advisor's ability to underwrite the same issue of municipal
securities, on which it acted as financial advisor, presented a
conflict that is too significant for the existing disclosure and
consent provisions of Rule G-23 to cure. Even in the case of a
competitive underwriting, the perception on the part of issuers and
investors that such a conflict might exist was sufficient to cause
concern that permitting such role switching was not consistent with ``a
free and open market in municipal securities,'' which the Board is
mandated to perfect.
    The imposition by Dodd-Frank of a fiduciary duty upon municipal
advisors,\4\ which includes financial advisors, made the existence of
such a conflict a greater concern.
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    \4\ Dodd-Frank amended Section 15B(c)(1) of the Act to provide
that:
    A municipal advisor and any person associated with such
municipal advisor shall be deemed to have a fiduciary duty to any
municipal entity for whom such municipal advisor acts as a municipal
advisor, and no municipal advisor may engage in any act, practice,
or course of business which is not consistent with a municipal
advisor's fiduciary duty or that is in contravention of any rule of
the Board.
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2. Statutory Basis
    The MSRB believes that the proposed rule change is consistent with
Section 15B(b)(2) of the Act, which provides that:

The Board shall propose and 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.

    Section 15B(b)(2)(C) of the Act, provides that the rules of the
MSRB shall:

Be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect
to, and facilitating transactions in municipal securities and
municipal financial products, to remove impediments to and perfect
the mechanism of a free and open market in municipal securities and
municipal financial products, and, in general, to protect investors,
municipal entities, obligated persons, and the public interest.

    The proposed rule change is consistent with Section 15B(b)(2) of
the Act because it would prevent conflicts of interest, whether actual
or perceived, caused by a dealer financial advisor serving as
underwriter or placement agent for an issue of municipal securities for
which it provided financial advisory services. Accordingly, the
proposed rule change would help protect municipal entities and help to
perfect the mechanism of a free and open market in municipal securities
to the benefit of investors, municipal entities, and the public
interest.
    Section 15B(b)(2)(L)(iv) of the Act requires that rules adopted by
the Board:

Not impose a regulatory burden on small municipal advisors that is
not necessary or appropriate in the public interest and for the
protection of investors, municipal entities, and obligated persons,
provided that there is robust protection of investors against fraud.

    The proposed rule change would principally affect dealer financial
advisors that are not small municipal advisors. Furthermore, it is
likely that those dealer financial advisors that are small municipal
advisors primarily serve as financial advisors to issuers of municipal
securities that do not access the capital markets frequently and, when
they do so, issue securities in small principal amounts. Those issuers
may be less likely than larger, more frequent issuers to understand the
conflict presented when their financial advisors also underwrite their
securities. Accordingly, while the proposed rule change might burden
some small municipal advisors, any such burden is outweighed by the
need to protect their issuer clients.

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

    The MSRB does not believe that the proposed rule change would
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change would
not burden competition among dealer financial advisors since it would
apply equally to all such dealer financial advisors. In some cases the
proposed rule change could reduce the number of dealers competing to
underwrite an issuer's issue of municipal securities, if the issuer has
employed a dealer financial advisor that is prohibited by the proposed
rule change from seeking to underwrite such issuance. It could also
reduce the number of dealers competing to serve as financial advisor
for an issuer's issuance of municipal securities, if such dealers
wished to act as underwriter or placement agent for such issue.
Nevertheless, the MSRB does not believe that any such burden on
competition is greater than is necessary or appropriate in furtherance
of the purposes of the Exchange Act, because such burden is outweighed
by the need to protect issuers as described above.

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

    On August 17, 2010, the MSRB requested comment on the portion of
the proposed rule change consisting of amendments to Rule G-23.\5\ A
copy of the Notice can be viewed at http://www.msrb.org/Rules-and-Interpretations/Regulatory-Notices/2010/2010-27.aspx?n=1. The MSRB
received 73 comment letters. An index to the comment letters received
in response to the Notice can be viewed at http://www.msrb.org/Rules-and-Interpretations/Regulatory-Notices/2010/2010-27.aspx?n=1, and
copies of the comment letters received in response to the Notice can
also be accessed through that Web site. In addition, these documents,
submitted with MSRB's filing as Exhibits 2a, 2b, and 2c, respectively,
can be viewed at the Commission's Web site at: http://www.sec.gov/rules/sro/msrb.shtml, under the heading SR-MSRB-2011-03. A discussion
of the comments and the MSRB's responses follows.
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    \5\ See MSRB Notice 2010-27 (August 17, 2010) (``Notice''). The
changes proposed to be made to Rule G-23 that are designed to
conform the language of the rule to the language used in Section 15B
of the Act, as described above, were not the subject of prior public
comment. In addition, the portion of the proposed rule change that
consists of the proposed interpretive notice was not the subject of
prior public comment.
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    In its request for comment, the MSRB posed the following questions:
    1. Should a dealer be precluded for a specific timeframe from
entering into a financial advisory relationship with an issuer after
serving as an underwriter on one of the issuer's prior offerings of
securities?
    2. If the MSRB were to amend Rule G-23 to prohibit dealers from
serving as underwriter on transactions for which they have served as
financial advisor to the issuer, should there be an exception for
competitively bid transactions? Would it matter if the notice of sale
was made available 5-7 business days before a competitively bid
transaction to allow additional time for other competing firms to
conduct due diligence? Should a financial advisor be allowed to bid in
a competitively bid transaction in which a failed bid had occurred? How
would the situation be handled in which there is a failed bid and the
financial advisor cannot step in to buy the bonds because of the
prohibition? Is this a common occurrence?
    3. Are there small and/or infrequent issuers that will be
negatively affected by the proposed prohibition? What are the
alternatives and costs for such issuers should the MSRB adopt the
proposed draft rule amendment?
    4. Is it appropriate for a dealer to serve as financial advisor to
an issuer at the same time that it serves as underwriter on a separate
issue for the same issuer?
    5. As it relates to current practices, are there instances in
competitively bid transactions in which a financial advisor should
resign in order to ``officially'' bid on a competitive issuance
transaction as an underwriter? Is there ever a time when the financial
advisor does not conduct the bid process for the issuer, such as the
use of electronic bidding platforms where the process of collecting
bids is done by a third party on behalf of the issuer? Is it an
uncommon practice for the bid process to be handled internally by the
issuer?
    6. In the context of a primary offering, should the exception found
in Rule G-23(d)(iii) be limited to situations in which a financial
advisor purchases bonds from underwriters who won a competitive bid for
the bonds in which multiple bids were received?
    7. In competitively bid transactions, are there situations where
the issuer may hire a financial advisor to serve on a specific issue
and then, at some point, hire a second financial advisor to oversee the
competitive bid process in order to allow the original financial
advisor to bid on the issue?
Discussion of Comment Letters
    The comments are summarized by topic as follows:
Conflicts of Interest
    A trade association for non-dealer financial advisors stated that
there is an unacceptable and/or inherent conflict of interest when a
dealer financial advisor for an issue becomes an underwriter for the
same issue.\6\ An association for finance officers of State and local
governments noted that it has encouraged the MSRB to adopt changes to
the rule to prohibit such role switching for many years because of the
conflicts of interest and as a caution to issuers.\7\ An issuer stated
that hiring non-dealer financial advisors provides ``greater assurance
of conflict-free advice.'' \8\ A non-dealer financial advisory service
to small and medium sized local governments and school districts
stated, ``[T]he roles and objectives of issuers and underwriters are so
clearly diametrically opposed that the conflict of interest in an
underwriter acting as financial advisor to an issuer can never be
overcome.'' \9\ Another non-dealer financial advisory firm noted that
the possibility of conflicts of interest are real and, in fact,
frequently arise when firms are allowed to serve as both financial
advisor and underwriter on a transaction.\10\
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    \6\ See National Association of Independent Public Finance
Advisors, Letter from Steven F. Apfelbacher, President dated
September 30, 2010 (``NAIPFA Letter''); see also Ehlers &
Associates, Letter from Michael C. Harrigan, Chairman/Senior
Financial Advisor dated September 30, 2010 (``Ehlers Letter'');
Independent Bond & Investment Consultants LLC, Letter from William
N. Lindsay, Director and Mark N. Chapman, Director dated September
30, 2010 (``IBIC Letter''); Munistat Services, Inc., Letter from
Robert F. Sikora, President dated September 30, 2010 (``Munistat
Letter''); Portland, Oregon, Office of Management and Finance,
Letter from Eric H. Johansen, Treasurer dated September 29, 2010
(``Portland Letter''); Specialized Public Finance Inc., Letter from
Garry R. Kimball, President dated September 30, 2010 (``Specialized
Public Finance Letter''); and Springsted Incorporated, Letter from
Kathleen A. Aho, President dated September 29, 2010 (``Springsted
Letter'').
    \7\ See Government Finance Officers Association, Letter from
Susan Gaffney, Director Federal Liaison Center dated September 30,
2010 (``GFOA Letter'').
    \8\ See Portland, supra note 6.
    \9\ See Munistat Letter, supra note 6.
    \10\ See Lewis Young Robertson & Burningham, Inc., Letter from
Scott J. Robertson, Principal dated September 22, 2010 (``Lewis
Young Letter'').
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    The GFOA Letter described GFOA's Best Practices \11\ as the basis
for its response and noted that issuers should be aware of and avoid
the conflicts of interest that arise when a financial advisor resigns
to become the underwriter on a transaction. The GFOA Best Practices
provide that ``issuers must keep in mind that the roles of the
underwriter and the financial advisor are separate, adversarial roles
and cannot be provided by the same party.'' One issuer noted that
allowing a dealer financial advisor to underwrite a negotiated issue
stands in direct conflict with the GFOA Best Practices and two issuers
provided form letters that expressed their support of the GFOA Best
Practices.\12\
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    \11\ See GFOA Best Practice--Selecting and Managing the Method
of Sale of State and Local Government Bonds (1994 and 2007) (DEBT);
GFOA Best Practice--Selecting Financial Advisors (2008) (DEBT); and
GFOA Best Practice--Selecting Underwriters for Negotiated Bond Sales
(2008) (DEBT) (``GFOA Best Practices'').
    \12\ See Copperas Cove, Texas, Letter from Andrea Gardner, City
Manager dated September 29, 2010 (``Copperas Cove Letter'');
Georgetown, Texas, Letter from Micki Rundell, Chief Financial
Officer dated September 8, 2010 (``Georgetown, Texas Letter''); and
Portland Letter, supra note 6.
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    One issuer provided an example of a dealer financial advisor
requesting that the city sign a revised agreement permitting the dealer
to temporarily terminate its financial advisory relationship so that it
could provide underwriting services. The revised agreement provided
that, ``It is necessary to point out that such an action could,

under certain circumstances, create a conflict of interest.'' \13\ The
issuer stated that, as an infrequent issuer, it did not understand the
extent of the conflict inherent in such role switching or the
availability of other options to market its bonds. The issuer further
noted that the proposed amendments would assure that issuers receive
unbiased advice regarding the structure of their issues and the
approach to marketing their bonds. One non-dealer financial advisory
firm noted, ``Most issuers from our markets would be unable to provide
comments because they are not clear on the difference'' between non-
dealer and dealer financial advisors.\14\ Another advisory firm stated
that the practice of role switching ``deprives an issuer of the
unbiased, independent advice it sought when originally retaining a
financial advisor.'' \15\
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    \13\ See Osage Beach, Missouri, Letter from Karri Bell, City
Treasurer dated August 26, 2010 (``Osage Beach Letter'').
    \14\ See Ehlers Letter, supra note 6.
    \15\ See Columbia Capital Management, LLC, Letter from Dennis
Lloyd, President dated September 29, 2010 (``Columbia Capital
Letter'').
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    Commenters against all or portions of the proposed amendments
suggested there cannot be a one size fits all approach in the municipal
market \16\ and stated that they are unaware of any evidence or history
of abuse that the proposed rule is designed to prevent.\17\ One
commenter stated, ``We do not see abuses or issues in the marketplace
related to Rule G-23 and, if abuses or specific concerns exist, would
like to see them highlighted so that we can better understand the
rationale behind the Securities and Exchange Commission's request for
the MSRB to consider changes to this rule.'' \18\ The commenter further
argued that there is existing regulation under Rule G-17 that would
apply to any situation in which a dealer is not acting in a fair and
appropriate manner and that Rule G-23 is ``an appropriately drafted
rule that is serving the function that it was intended to serve.''
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    \16\ See George K. Baum & Company, Letter from Robert K. Dalton,
Vice Chairman dated September 29, 2010 (``Baum Letter''); Bond
Dealers of America, Letter from Mike Nicholas, Chief Executive
Officer dated September 30, 2010 (``BDA Letter''); D.A. Davidson &
Co., Letter from William A. Johnstone, President and Chief Executive
Officer dated September 29, 2010 (``D.A. Davidson Letter''); and
J.J.B. Hilliard, W.L. Lyons, LLC, Letter from Ronald J. Dieckman,
Director Public Finance and Municipal Bonds dated September 30, 2010
(``Hilliard Letter'').
    \17\ See Robert W. Baird & Co. Incorporated, Letter from Charles
M. Weber, Associate General Counsel dated September 29, 2010
(``Baird Letter''); Piper Jaffray & Co., Letter from Frank Fairman,
Managing Director, Head of Public Finance Services, and Rebecca
Lawrence, Assistant General Counsel, Principal dated September 29,
2010 (``Piper Letter''); RBC Capital Markets Corporation, Letter
from Christopher Hamel, Head, Municipal Finance dated September 30,
2010 (``RBC Letter''); and Securities Industry and Financial Markets
Association, Letter from Leslie M. Norwood dated September 30, 2010
(``SIFMA Letter'').
    \18\ See Piper Letter, supra note 17.
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    A trade association for securities firms and banks stated, ``Rule
G-23 represents a comprehensive and balanced approach to potential
conflicts of interest.'' \19\ Another commenter noted ``municipal
clients clearly understand the potential conflict of interest that may
exist when a financial advisor serves as underwriter'' and that such
clients are generally aware of GFOA Best Practices ``which advise them
of the inherent conflict of interest in allowing a financial advisor to
resign in order to serve as underwriter.'' \20\ Another commenter
argued, ``To suggest that an issuer is incapable of understanding an
arrangement it is entering into is always a dangerous concept. Freedom
of choice is an essential element in the healthy functioning of the
financial markets to maximize credit availability.'' \21\ A bank
commenter stated, ``In terms of negotiated financings, Rule G-23 should
remain unchanged since the Rule currently in force does prevent
conflicts of interest.'' \22\ An issuer stated, ``We fully comprehend
the duties owed to us by a dealer financial advisor.'' \23\ The trade
association argued that the provisions that allow a dealer financial
advisor to serve as underwriter on the same transaction are rarely
relied upon by dealers.\24\
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    \19\ See SIFMA Letter, supra note 17; see also BDA Letter, supra
note 16; BMO Capital Markets GKST Inc., Letter from Robert J.
Stracks, Counsel dated September 30, 2010 (``BMO Letter''); Eastern
Bank Capital Markets, Letter from James N. Fox, Senior Vice
President and Managing Director dated September 29, 2010 (``Eastern
Bank Letter''); Fulbright & Jaworski L.L.P., Letter from Fredric A.
Weber dated September 30, 2010 (``Fulbright Letter''); and RBC
Letter, supra note 17.
    \20\ See Baird Letter, supra note 17.
    \21\ See BMO Letter, supra note 19.
    \22\ See Eastern Bank Letter, supra note 19.
    \23\ See Denver, Colorado, Department of Finance, Letter from
R.O. Gibson, Director of Financial Management dated September 29,
2010 (``Denver Letter'').
    \24\ See SIFMA Letter, supra note 17.
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    MSRB Response. The MSRB shares the concern of those commenters who
stated that Rule G-23 permits inherent conflicts of interest, which are
not cured by the disclosure and waiver provisions of the rule. While
underwriters have a duty of fair dealing to issuers under Rule G-
17,\25\ they also have a duty to investors, whose interests are
generally adverse to those of issuers. A financial advisor's sole duty
is to its issuer client. The MSRB believes the proposed amendments will
protect municipal entities, as the MSRB is mandated to do by Dodd-
Frank, by preventing the perceived and actual conflicts of interest
that arise under the existing rule.
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    \25\ See Reminder Notice on Fair Practice Duties to Issuers of
Municipal Securities, MSRB Notice 2009-54 (Sept. 29, 2009),
reprinted in MSRB Rule Book.
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Fiduciary Duty Concerns
    Commenters in favor of the proposed amendments to Rule G-23 noted
that certain sections of Rule G-23 should be eliminated or revised to
ensure compliance with the provisions of Dodd-Frank.\26\ One commenter
\27\ noted that Dodd-Frank ``clearly and concisely defines the type of
advice that a Municipal Advisor provides, and it does so for the
purpose of delineating who owes a fiduciary duty to the issuer of
municipal debt. In so doing, the Act provides an exception for brokers,
dealers or municipal securities dealers serving as underwriters.'' \28\
Another commenter argued that any rulemaking should make a clear
distinction between a financial advisor and an underwriter.\29\ One
commenter stated that the definition of ``underwriter'' in Section
2(a)(11) of the Securities Act of 1933 ``does not contemplate at all
that underwriters will provide `advice' to issuers.'' \30\ Another
commenter stated, ``As presently written, Rule G-23 allows underwriters
to provide substantially the same `advice' as a financial advisor which
is not consistent'' with Dodd-Frank.\31\
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    \26\ See Fieldman, Rolapp & Associates, Letter from Thomas M.
DeMars, Managing Principal dated September 30, 2010 (``Fieldman
Letter''); Fiscal Advisors & Marketing, Inc., Letter from John C.
Shehadi, Chairman, et al. dated September 30, 2010 (``Fiscal
Advisors Letter''); Munistat Letter, supra note 6; NAIPFA Letter,
supra note 6; and Public FA, Inc., Letter from Philip C. Dotts,
President dated September 30, 2010 (``Public FA Letter'').
    \27\ See WM Financial Strategies, Letter from Nathan R. Howard,
Municipal Advisor dated September 28, 2010 (``WM Financial
Strategies/Mr. Howard Letter'').
    \28\ Section 15B(e)(4)(A) of the Exchange Act defines the term
``municipal advisor'' to include, among other things, a person that
provides advice to or on behalf of a municipal entity with respect
to the issuance of municipal securities, including advice with
respect to the structure, timing, terms and other similar matters
concerning such issues. Section 15(B)(e)(4)(C) provides that the
term does not include a dealer serving as an underwriter as defined
in Section 2(a)(11) of the Securities Act of 1933.
    \29\ See WM Financial Strategies, Letter from Joy A. Howard,
Principal dated September 28, 2010 (``WM Financial Strategies/Ms.
Howard Letter'').
    \30\ See Fieldman Letter, supra note 26.
    \31\ See Public FA Letter, supra note 26.
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    The same commenter suggested that advice concerning structure,
timing, terms and other similar matters that dealers are currently
permitted to provide pursuant to Rule G-23 is now a function reserved
for municipal advisors under Dodd-Frank. Another commenter noted, ``the
concept of

``advice,'' both legally and practically, suggests a party that has no
business interest in the transaction that might be contrary to that of
the issuer.'' \32\ One financial advisory firm noted that any
amendments to Rule G-23 should reflect that dealers providing such
advice ``must be fiduciaries and therefore cannot buy the bonds.'' \33\
One commenter noted, ``At the very moment firms seek to resign as
advisers, they remain issuers' fiduciaries until finalization of
resignations.'' \34\ A financial advisory firm noted that financial
advisors to issuers of governmental debt are fiduciaries that must
render advice and must act only in the best interests of the issuers
and another firm stated, ``We have observed over many years that some
broker/dealers performing underwriting services engage themselves to
issuers who (mistakenly) consider the underwriter to be their
``financial advisor'' (i.e., a fiduciary working for them).'' \35\
---------------------------------------------------------------------------

    \32\ See Fieldman Letter, supra note 26.
    \33\ See Lewis Young Letter, supra note 10.
    \34\ See American Governmental Financial Services of Sacramento,
E-mail from Robert Doty, President dated September 30, 2010 (``AGFS
E-mail'').
    \35\ See Ehlers Letter, supra note 6 and Lewis Young Letter,
supra note 10.
---------------------------------------------------------------------------

    One commenter noted that the rule should reiterate that ``the
underwriter does not hold a fiduciary responsibility to the issuer.''
\36\ Another commenter stated that the Board could consider modifying
the existing language of Rule G-23(b) to affirm that advice is now a
function reserved for financial advisors and that providing such advice
on a particular transaction places the underwriter in the role of
financial advisor thus precluding it from acting as underwriter on such
transaction.\37\ Finally, another commenter noted, ``If the advisers
were performing their jobs properly, and not violating their fiduciary
duty so severely, they would be actively contacting potential
underwriters, not attempting to grab for themselves the underwriting
positions in which the advisers become issuers' adversaries.'' \38\
---------------------------------------------------------------------------

    \36\ See GFOA Letter, supra note 7.
    \37\ See Munistat Letter, supra note 6.
    \38\ See AGFS E-mail, supra note 34.
---------------------------------------------------------------------------

    Some commenters did not see a need for the proposed changes in Rule
G-23 at this time, particularly with the advent of the newly mandated
fiduciary standard for municipal advisors.\39\ One commenter stated
that this fiduciary standard of care will ``help ensure that municipal
clients receive reasonable, unbiased advice from their financial
advisors and eliminate the concern that financial advisors are tainted
by the prospect of underwriting new issues.'' \40\ Another commenter
stated, ``As to a federal fiduciary standard, every adviser has had to
deal with a fiduciary obligation under state or common law long before
now (and even before the SEC was created).'' \41\
---------------------------------------------------------------------------

    \39\ See Hilliard Letter, supra note 16; RBC Letter, supra note
17; and SIFMA Letter, supra note 17.
    \40\ See Baird Letter, supra note 17.
    \41\ See BMO Letter, supra note 19.
---------------------------------------------------------------------------

    MSRB Response. The MSRB is concerned that the role switching
currently permitted under Rule G-23 is inconsistent with a dealer
financial advisor's fiduciary duty to its issuer client. This inherent
conflict is too significant for disclosure and consent to cure. Some
commenters \42\ suggested that the proposed amendments to Rule G-23 do
not go far enough, because they do not address the exception from the
definition of ``financial advisory relationship'' in Rule G-23(b) for
dealers ``acting as underwriters.'' The MSRB believes that the proposed
interpretive guidance strikes a balance between these competing
concerns by providing that a dealer may not avail itself of the
underwriter exception unless it maintains an arm's-length relationship
with the issuer.
---------------------------------------------------------------------------

    \42\ See NAIPFA Letter, supra note 6; Public FA Letter, supra
note 26; WM Financial Strategies/Ms. Howard Letter, supra note 29;
and WM Financial Strategies/Mr. Howard Letter, supra note 29.
---------------------------------------------------------------------------

Issue-by-Issue Application of the Proposed Rule
    One commenter expressed support for a ``cooling off'' period during
which a dealer would not be permitted to serve as underwriter for any
transaction of an issuer following the termination of the dealer's
financial advisory relationship with such issuer.\43\ A trade
association stated, ``Under Rule G-37 and the proposed changes to Rule
A-3, the MSRB has established a precedent for imposing two-year bans''
and believes that a financial advisor ``will remain independent if
precluded from serving as an underwriter for a term of two years from
the expiration or termination of the financial advisory relationship.''
\44\ Another commenter agreed with a two year ban \45\ if such a time
frame would be part of the proposed amendments and also noted the two-
year precedent of other MSRB rules. Some commenters supported a cooling
off period of at least one year and some suggested that clarification
be provided to ensure that any issue covered by a financial advisory
agreement be subject to the prohibition.\46\ Other commenters expressed
concern that if clarification is not provided, some dealers may read
the proposed rule change as simply eliminating the requirement for a
disclosure of conflict letter, so long as they have not yet begun work
on a particular issue, and would simply resign as to one issue and
underwrite another issue.\47\
---------------------------------------------------------------------------

    \43\ See IBIC Letter, supra note 6.
    \44\ See NAIPFA Letter, supra note 6.
    \45\ See Copperas Cove Letter, supra note 12; see also Estrada
Hinojosa & Company, Inc., Letter from Robert A. Estrada, Chairman
and Chief Compliance Officer dated September 30, 2010 (``Estrada
Letter''); Ehlers Letter, supra note 6; Fiscal Advisors Letter,
supra note 26; Georgetown, Texas, supra note 12; Munistat Letter,
supra note 6; Public FA Letter, supra note 26; Tamalpais Advisors,
Inc., Letter from Jean Marie Buckley, President dated September 28,
2010 (``Tamalpais Letter''); Specialized Public Finance Letter,
supra note 6; Springsted Letter, supra note 6; and WM Financial
Strategies/Ms. Howard Letter, supra note 29.
    \46\ See Lewis Young, supra note 10.
    \47\ See Columbia Capital Letter, supra note 15; Lewis Young
Letter, supra note 10; and Public Financial Management, Inc., Letter
from F. John White, Chief Executive Officer dated September 29, 2010
(``PFM Letter'').
---------------------------------------------------------------------------

    Some commenters also expressed concerns regarding situations in
which a dealer serves as financial advisor to an issuer while it serves
as underwriter on a separate issue for the same issuer. These
commenters suggested that the best interests of issuers are not
protected even if the services are provided on separate
transactions.\48\
---------------------------------------------------------------------------

    \48\ See NAIPFA Letter, supra note 6; Columbia Capital Letter,
supra note 15; and Lewis Young Letter, supra note 10.
---------------------------------------------------------------------------

    However, other commenters noted that there are issuers with
multiple and/or separate and distinct debt financing programs that are
funded from different revenue sources and that the proposed amendments
would unnecessarily restrict the pool of available dealer financial
advisors available to such issuers on various transactions.\49\ One of
these commenters noted that any proposed prohibition that is broader
than issue-by-issue ``goes beyond what is necessary to ensure fair
competition and would unnecessarily constrain the advice and services
available to issuers.'' \50\ Another noted that a broad amendment to
Rule G-23 would result in unintended consequences that could be very
unfair to dealers that engage in both financial advisory services and
bond

underwriting.\51\ One commenter expressed support for proposed
amendments that would ``allow a regulated firm to continue to engage in
non-transaction specific consulting'' in order to ``allow an issuer to
have certainty in the relationship that they have with a firm for each
specific debt transaction.'' \52\ The same commenter noted that the
``current practice of allowing a financial advisor to retain their role
while involved with a private placement, which the financial advisory
firm or a related bank portfolio purchases, should be eliminated.''
---------------------------------------------------------------------------

    \49\ See BDA Letter, supra note 16; Denver Letter, supra note
23; Eastern Bank Letter, supra note 19; Hilliard Letter, supra note
16; Lynn, Robert O.L., E-mail from Robert O.L. Lynn, Financial
Services Consultant dated September 29, 2010 (``Lynn E-mail''); RBC
Letter, supra note 17; Ross, Sinclaire & Associates, Letter from
Murray Sinclaire, Jr., President/CEO dated September 28, 2010 (``RSA
Letter''); SIFMA Letter, supra note 17; and Stone & Youngberg,
Letter from Stone & Youngberg dated September 28, 2010 (``Stone &
Youngberg Letter'').
    \50\ See BDA Letter, supra note 16.
    \51\ Specifically, the Estrada Letter, supra note 45, provided
examples to support a recommendation that the MSRB not prohibit
dealers from providing financial advisory and/or underwriting
services, at the same time, to more than one debt issuing entities
of a single issuer (e.g., a dealer firm should be able to provide
financial advisory services to a city owned and operated water and
sewer company while providing underwriting services to the same city
owned and operated electric and gas utility company). The Estrada
Letter also argued that such role switching should not be prohibited
on various bond issuances that have more than one series, ``The MSRB
should not prohibit a broker/dealer who serves as financial advisor
on Series 2010A from competing to serve as underwriter for B, C or
D.''
    \52\ See Baum Letter, supra note 16.
---------------------------------------------------------------------------

    Some commenters argued that any proposed cooling off period would
be an arbitrary one, would reduce issuer choice and would decrease
competition among financial advisors.\53\ One of the commenters against
such a period suggested that there is no reason that an issuer should
be precluded from working with a dealer financial advisor for a
specific timeframe because the dealer has previously underwritten a
prior offering for that issuer. Another argued that no cooling off
period is needed following the provision of underwriting services as
there are no ``potentially cognizable conflicts once the underwriter's
role has ended.'' \54\ One commenter also noted that in certain areas
of the country there has been an ``unfortunate movement by non-
registered advisors to exclude broker-dealers/underwriters from
responding to issuers' request for proposals to serve as financial
advisor'' and suggested that this ``looks and smells like restrictive
competition (anti-trust).'' \55\
---------------------------------------------------------------------------

    \53\ See Denver Letter, supra note 23; Piper Letter, supra note
17; RSA Letter, supra note 49; and SIFMA Letter, supra note 17.
    \54\ See Piper Letter, supra note 17 and SIFMA Letter, supra
note 17.
    \55\ See FirstSouthwest, Letter from Hill A. Feinberg, Chairman
and CEO dated September 29, 2010 (``FirstSouthwest/Mr. Feinberg 2
Letter'').
---------------------------------------------------------------------------

    It was also noted that the proposed amendments to the rule would
prohibit a dealer that provided financial advisory services to an
issuer from providing successor remarketing agent services to the same
issuer for a one year term following the termination of its financial
advisory relationship. The commenter suggested ``the restrictions
should be as narrowly tailored as possible so as to prevent unnecessary
disruption in the marketplace'' and suggested a cooling off period of
only three months.\56\
---------------------------------------------------------------------------

    \56\ See SIFMA Letter, supra note 17.
---------------------------------------------------------------------------

    MSRB Response. Upon review of the comment letters, the MSRB has
determined not to impose a cooling off period between the time a dealer
completes a financial advisory engagement with an issuer and the time
the dealer may serve as underwriter for a different issue by the same
issuer. Instead, the MSRB has determined to continue to apply Rule G-23
on an issue-by-issue basis. The proposed amendments would not prohibit
a dealer financial advisor from providing financial advisory services
on one issue and then serving as underwriter on another issue, even if
the two issues were in the market concurrently.
    Nevertheless, the MSRB does consider it to be appropriate to impose
a cooling off period of one year during which a dealer financial
advisor could not serve as remarketing agent for the same issue of
municipal securities. The MSRB believes the one year term is a
significant timeframe that would more adequately address any potential
or actual conflicts of interest than the three month time frame
suggested by one commenter.
Small and/or Infrequent Issuers
    Commenters that supported the proposed amendments to Rule G-23
generally did not support an exception to the proposed amendments for
small and/or infrequent issuers.\57\ One commenter asked what would
constitute a small or infrequent issuer and noted that small and
infrequent issuers would be the primary beneficiaries of a revised rule
because they are less knowledgeable about the capital markets and
consequently, are the least likely issuers to understand the conflicts
of interest that arise when a dealer financial advisor switches to
serve as underwriter.\58\ Another noted, ``We are not aware of any
study proving that ``small'' or ``infrequent'' issuers have difficulty
marketing their issues.'' \59\ Others stated that small and infrequent
issuers would benefit from the prohibition because they lack the market
expertise necessary to defend their own interests.\60\ Another
commenter stated that small and infrequent issuers are the most likely
to be manipulated by dealer financial advisors because such issuers
lack the sophistication to know if the terms of the underwriting
engagement are reasonable.\61\
---------------------------------------------------------------------------

    \57\ See Fieldman Letter, supra note 26; GFOA Letter, supra note
7; IBIC Letter, supra note 6; Lewis Young Letter, supra note 10; PFM
Letter, supra note 47; and Public FA Letter, supra note 26.
    \58\ See WM Financial Strategies Letter/Ms. Howard, supra note
29.
    \59\ See NAIPFA Letter, supra note 6.
    \60\ See Fiscal Advisors Letter, supra note 26 and Munistat
Letter, supra note 6.
    \61\ See Columbia Capital Letter, supra note 15.
---------------------------------------------------------------------------

    A trade association stated that ``if an FA is properly structuring
the deal, and if the deal is rated and advertised appropriately, there
should not be an adverse affect on the issuer.'' \62\ Another commenter
noted, ``In our experience, the smaller, infrequent issuers have ample
access to the market if the credit is sound.'' \63\ Other commenters
noted that ``there are always reasonable alternatives for issuers to
market their bonds,'' which include the use of non-dealer financial
advisors and private placements with local banks and that, ``Many times
the smallest of issuers use governmental lenders anyway, and you have
already provided for this needed exemption.'' \64\
---------------------------------------------------------------------------

    \62\ See GFOA Letter, supra note 7.
    \63\ See Specialized Public Finance Letter, supra note 6.
    \64\ See Columbia Capital Letter, supra note 15; Lewis Young
Letter, supra note 10; NAIPFA Letter, supra note 6; Public FA
Letter, supra note 26; and Springsted Letter, supra note 6.
---------------------------------------------------------------------------

    Other commenters that supported the proposed amendments to Rule G-
23 also noted that a fundamentally sound principle such as the proposed
amendments to Rule G-23 should not be disregarded for small or
infrequent issuers, as the rule as revised will provide protection
against a broker's concealed self-interest and that ``a prohibition
would create a competitive environment'' for all financial advisory
firms, which would ultimately benefit issuers.'' \65\ Finally, another
commented that, if the MSRB continues to be concerned about the impact
of a prohibition on role switching on smaller and infrequent issuers,
it should ``study the overall costs that smaller issuers incur when the
financial advisor resigns to become the underwriter, versus other
methods of sale.'' \66\
---------------------------------------------------------------------------

    \65\ See IBIC Letter, supra note 6.
    \66\ See GFOA Letter, supra note 7; IBIC Letter, supra note 6;
and PFM Letter, supra note 47.
---------------------------------------------------------------------------

    Commenters that opposed the proposed amendments to Rule G-23
generally noted concerns about the effect of the proposed amendments on
smaller and/or infrequent issuers. One noted that any changes that
further limit issuer choice will ``in our opinion, result in adverse
market consequences for

many issuers.'' \67\ Another stated, ``Small issuers, issuing difficult
to place securities need all the options they can get.'' \68\ Another
commenter stated, ``Very often, only the local dealer is interested in
marketing the securities of these municipal issuers and these
transactions are usually too small to attract bids from larger firms''
and argued that any revisions to the rule should retain the ability of
dealer financial advisors to conduct direct placements on behalf of
smaller issuers.\69\ Another noted that small and infrequent borrowers
in the municipal bond market face difficulties getting bids for their
bonds even when deal flow is low.\70\
---------------------------------------------------------------------------

    \67\ See D.A. Davidson Letter, supra note 16.
    \68\ See Zions First National Bank, Letter from W. David
Hemingway, Executive Vice President dated September 30, 2010
(``Zions Letter'').
    \69\ See BDA Letter, supra note 16.
    \70\ See BDA Letter, supra note 16; D.A. Davidson Letter, supra
note 16; Hilliard Letter, supra note 16; and Zions Letter, supra
note 78.
---------------------------------------------------------------------------

    Other commenters against the proposed amendments to Rule G-23
raised specific State law requirements and said that certain special
districts would be negatively affected by the proposed amendments.\71\
Specifically, some commenters noted that municipal utility districts
(``MUDs'') in Texas sell their bonds ``non-rated'' and said that the
proposed amendments would increase interest rates and property
taxes.\72\ One commenter also argued, ``Eliminating financial advisers
from bidding on their own districts would force our firm to seek a
legislative remedy and allow our districts to sell bonds by negotiated
sale and therefore all but eliminating competitive sales in the
future.'' \73\
---------------------------------------------------------------------------

    \71\ See Alabama Department of Education, Letter from Warren
Craig Pouncey, Deputy State Superintendent of Education,
Administrative and Financial Services dated September 29, 2010
(``Alabama Letter''); Allen Boone Humphries Robinson LLP, Letter
from Joe B. Allen, Managing Partner dated September 29, 2010
(``Allen Letter''); Corinthian Communities, Letter from Harry
Masterson, Principal dated September 30, 2010 (``Corinthian
Letter''); Crews & Associates, Inc., Letter from Jim Jones,
President dated September 28, 2010 (``Crews Letter'');
FirstSouthwest, Letter from Terrell Palmer, Senior Vice President
dated September 29, 2010 (``FirstSouthwest/Mr. Palmer Letter'');
Fulbright Letter, supra note 19; GGP-Bridgeland, LP, Letter from
Peter C. Houghton, Vice President dated September 29, 2010 (``GGP-
Bridgeland Letter''); Mischer Investments, Letter from Mark A.
Kilkenny, Senior Vice President dated September 29, 2010 (``Mischer
Letter''); Newland Real Estate Group, LLC, Letter from Walter F.
Nelson, President dated September 30, 2010 (``Newland Letter''); New
Quest Properties, Letter from Steven D. Alvis, Managing Partner
dated September 29, 2010 (``NewQuest Letter''); Schwartz, Page &
Harding, L.L.P., Letter from Joseph M. Schwartz, Managing Partner
dated September 29, 2010 (``Schwartz Letter''); Signorelli Company,
Letter from Daniel K. Signorelli, President (``Signorelli Letter'');
Wolff Companies, Letter from David W. Hightower, Executive Vice
President and Chief Development Officer dated September 30, 2010
(``Wolff Letter''); and Young & Brooks, Letter from Mark W. Brooks
dated September 29, 2010 (``Young & Brooks Letter'').
    \72\ See also FirstSouthwest/Mr. Palmer Letter, supra note 71;
FirstSouthwest, Letter from Julie Peak, Managing Director, dated
September 27, 2010 (``FirstSouthwest/Ms. Peak Letter''); Municipal
Information Services, Letter from Ronald L. Welch dated September
30, 2010 (``MIS Letter''); and Young and Brooks Letter, supra 70.
    \73\ See FirstSouthwest/Mr. Palmer Letter, supra note 71.
---------------------------------------------------------------------------

    Some of the commenters against the proposed amendments also
suggested exemptions for issuances below a certain threshold if the
proposed amendments that would prohibit dealer financial advisors from
serving as underwriters on transactions on which they provided
financial advisory services were adopted.\74\ The proposed threshold
exemptions ranged from $5 million to $30 million or less. One trade
association provided statistics to indicate that ``only 2.5% of all new
issue volume (based on the total dollar amount) for the last ten
years'' exceeded $10,000,000, which suggest that there should be an
exception for smaller issuances as they are a small part of the
market.\75\
---------------------------------------------------------------------------

    \74\ See Baum Letter, supra note 16 ($30,000,000); D.A. Davidson
Letter, supra note 16 ($30,000,000); FirstSouthwest, Letter from
Hill A. Feinberg, Chairman and CEO dated September 23, 2010
(``FirstSouthwest/Mr. Feinberg Letter'') (competitively bid issues
not exceeding $5,000,000); Lantana (Texas) District Offices, Denton
County Fresh Water Supply Districts 6 & 7, Letter from Kevin Mercer,
General Manager dated September 28, 2010 (``Lantana Letter'')
(competitively bid issues not exceeding $10,000,000); NewQuest
Letter, supra note 71 (competitively bid issues not exceeding
$10,000,000); RBC Letter, supra note 17 ($20,000,000); and
Signorelli Letter, supra note 71 (competitively bid issues not
exceeding $10 million).
    \75\ See SIFMA Letter, supra note 17.
---------------------------------------------------------------------------

    MSRB Response. The MSRB believes that the potential negative impact
on fees and market accessibility for small and/or infrequent issuers
would be minimal compared to the protections that will be afforded to
such issuers. The MSRB is persuaded by the arguments that small and/or
infrequent issuers are, in many cases, unable to appreciate the nature
of the conflict they are being asked to waive by the very dealer
financial advisor that will benefit from the waiver.\76\ The MSRB does
not believe that exceptions should be provided for smaller offerings as
suggested by several commenters.
---------------------------------------------------------------------------

    \76\ See Copperas Cove Letter, supra note 12; Fieldman Letter,
supra note 26; Georgetown, Texas Letter, supra note 12; and Portland
Letter, supra note 6.
---------------------------------------------------------------------------

Competitive Bid Offerings and Failed Bids
    Some commenters did not support exceptions to the prohibition that
would allow a dealer financial advisor to bid on a competitive
transaction for which they have provided financial advisory services.
One of these commenters noted ``a financial advisor may also control or
influence the credit enhancement and ratings process. Whether to apply
for insurance and/or a rating, which ratings service to use and
structural considerations like reserve or coverage requirements can all
impact the outcome of a competitive sale.'' \77\ Another argued that if
a financial advisor were permitted to bid for a competitive
transaction, it might not aggressively work to secure the largest
number of bids possible because of an incentive to reduce
competition.\78\ One commenter noted that any time a financial advisor
provides the winning bid on a competitive sale transaction the
potential for an appearance of impropriety exists.\79\
---------------------------------------------------------------------------

    \77\ See Specialized Public Finance Letter, supra note 6.
    \78\ See WM Financial Strategies/Ms. Howard Letter, supra note
29.
    \79\ See Columbia Capital Letter, supra note 15; Specialized
Public Finance Letter, supra note 6; and WM Financial Strategies/Ms.
Howard Letter, supra note 29; see also Fieldman Letter, supra note
26; Fiscal Advisors Letter, supra note 26; Munistat Letter, supra
note 6; Public FA Letter, supra note 26.
---------------------------------------------------------------------------

    Commenters also suggested that, even if a notice of the sale were
made available an ample time before the competitive bid, the notice
would not change the inherent conflict of interest that exists when a
dealer is allowed to participate in such a transaction. One of these
commenters stated that the notice of sale is already published at least
five business days before a competitive sale, so providing such an
exception would not provide meaningful relief or mitigate any conflicts
of interest.\80\ Another commenter suggested that allowing an exception
for competitively bid issues for which the notice of the sale was
provided five to seven business days in advance of the bid deadline to
allow time for due diligence ``will invite game playing.'' \81\
---------------------------------------------------------------------------

    \80\ See Columbia Capital Letter, supra note 15; IBIC Letter,
supra note 6; Fiscal Advisors Letter, supra note 26; Specialized
Public Finance Letter, supra note 6; and Tamalpais Letter, supra
note 45.
    \81\ See Springsted Letter, supra note 6.
---------------------------------------------------------------------------

    Other commenters noted that failed bids are not a common occurrence
and there should be no exceptions for such occurrences.\82\ One noted
that most failed bids are due to ``severe market disruptions,
transactions not suited to competitive bid or poorly designed bidding
rules.'' In the event of a failed

bid, another commenter stated, ``there is almost always means of
getting the securities sold without the advisor stepping in as a
buyer.'' They also argued that in the case of private placements there
is much more potential for abuse and a flat prohibition would be
helpful. However, one commenter provided an example of a transaction
that had not been completed as of the date of her letter and noted that
the firm ``was unsuccessful in underwriting the securities and then
switched to serving as financial advisor for a competitive sale.'' \83\
---------------------------------------------------------------------------

    \82\ See Columbia Capital Letter, supra note 15; IBIC Letter,
supra note 6; Lewis Young Letter, supra note 10; and WM Financial
Strategies/Ms. Howard, supra note 30.
    \83\ See WM Financial Strategies/Ms. Howard Letter, supra note
29.
---------------------------------------------------------------------------

    A trade association for non-dealer financial advisors noted that
``if a bid fails it is most likely because the broker-dealer financial
advisor failed to properly advertise, circulate documents and/or
perform other activities to obtain the largest number of bids possible.
If a financial advisor has performed their role properly and yet there
are no bidders, it is likely that the credit of the issuer's debt
obligation should not be publicly sold.'' \84\ In addition, the
organization argued that in the event of the remote possibility under
which competitive bidding is required by local/State law and the
possibility of only one interested underwriter, the issuer would be
better served by employing a non-dealer municipal advisor to arrange
the competitive sale rather than relying on the potential ``sole
bidder'' to serve as both financial advisor and sole bidder. It also
argued that the non-dealer municipal advisor may recommend that the bid
be rejected which could provide other legal options for the debt
placement and that ``sole bidders'' have the opportunity to charge
higher fees and impose higher yields.
---------------------------------------------------------------------------

    \84\ See NAIPFA Letter, supra note 6.
---------------------------------------------------------------------------

    However, commenters against the proposed amendments stated that
they are unaware of: (i) Many circumstances under which a dealer
financial advisor would be justified in resigning in order to bid on a
competitive issuance transaction as underwriter; (ii) situations under
which the financial advisor is not involved in the bidding process; or
(iii) situations under which the issuer handles the bid process.\85\
One commenter noted that issuers do not usually have the knowledge to
properly handle the bid process internally. Another stated that
allowing a financial advisor to resign to bid on a competitive
transaction is ``another illustration of allowing a loophole for the
dealer that introduces a conflict of interest.'' One commenter argued,
``The electronic bidding platforms are nothing more than vehicles to
collect the bids'' and that ``it is an uncommon practice for the bid
process to be handled internally by the issuer.'' Commenters also
agreed that, in competitively bid transactions, the issuer should not
have to hire a financial advisor to oversee the bid process in order to
allow the original advisor to bid on the transaction. Finally, one of
the commenters argued, ``If the FA maintains its role throughout the
transaction, there would be no need for a second FA.'' \86\
---------------------------------------------------------------------------

    \85\ See Columbia Capital Letter, supra note 15; IBIC Letter,
supra note 6; Munistat Letter, supra note 6; Springsted Letter,
supra note 6; and Tamalpais Letter, supra note 45.
    \86\ See Fiscal Advisors Letter, supra note 26; IBIC Letter,
supra note 6; Lewis Young Letter, supra note 10; Munistat Letter,
supra note 6; Public FA Letter, supra note 26; Springsted Letter,
supra note 6; and Tamalpais Letter, supra note 45.
---------------------------------------------------------------------------

    Some commenters stated that the proposed amendments to Rule G-23
are unnecessary because the competitive bid process is appropriate,
fair and equal for all parties.\87\ One commenter noted, ``awards of
deals in the competitive market are based solely on price and have
nothing to do with any previous or existing relationships among
issuers, advisors and dealers.'' \88\ Another stated, ``The bidding
process for competitive sales encourages competition among the
underwriters and introduces an arms' length basis for establishing the
terms of the issue and the underwriting.'' \89\ One bank argued that
``at least direct purchases by financial advisors for their own
portfolios should be allowed in competitively bid transactions where
the issuer acknowledges the potential conflicts in writing and gives
the financial advisor permission to submit a bid.'' \90\
---------------------------------------------------------------------------

    \87\ See D.A. Davidson Letter, supra note 16; Eastern Bank
Letter, supra note 19; and Hilliard Letter, supra note 16.
    \88\ See SIFMA Letter, supra note 17.
    \89\ See BDA Letter, supra note 16.
    \90\ See Zions Letter, supra note 78.
---------------------------------------------------------------------------

    Eleven commenters \91\ in Kentucky and South Carolina submitted
form letters opposing any changes to the rule. Some of these commenters
noted that, for certain competitive bid issuances, a dealer financial
advisor provided the only winning bid. ``No other underwriting firm had
bid to purchase these bonds and the Sale would have been unsuccessful''
without the dealer financial advisor's participation. Other commenters
noted that for certain of their competitive bid transactions, the
winning bid provided by the dealer financial advisor was at a cost
significantly lower than the next closest bid.
---------------------------------------------------------------------------

    \91\ See Barren County (Kentucky) Schools, Letter from Dr. Jerry
Ralston, Superintendent dated September 15, 2010 (``Barren County
Letter''); Boyd County (Kentucky) Public Schools, Letter from Donald
Fleu, Finance Director/Treasurer dated September 15, 2010 (``Boyd
County Letter''); Crittenden County (Kentucky) Schools, Letter from
Brent Highfil, Finance Director dated September 15, 2010
(``Crittenden County Letter''); Dayton (Kentucky) Independent
Schools, Letter from Gary Rye, Superintendent dated September 14,
2010 (``Dayton, Kentucky Letter''); East Bernstadt (Kentucky)
Independent School, Letter from Homer Radford, Superintendent dated
September 15, 2010 (``East Bernstadt Letter''); Elliott County
(Kentucky) Board of Education, Letter from John Williams,
Superintendent dated September 15, 2010 (``Elliott County Letter'');
Greenup County (Kentucky) Schools, Letter from Scott P. Burchett,
Finance Director/Treasurer dated September 17, 2010 (``Greenup
County Letter''); Kenton County (Kentucky) Board of Education,
Letter from Kelley Gamble, Finance Director dated September 15, 2010
(``Kenton County Letter''); Kentucky Interlocal School
Transportation Association, Letter from Jack Moreland, President
dated September 27, 2010 (``KISTA Letter''); Pike County (Kentucky)
Schools, Letter from Nancy Ratliff, Finance Director dated September
15, 2010 (``Pike County Letter''); and South Carolina Association of
Governmental Organizations, Letter from Brantley D. Thomas III,
Chairman of the Board of Directors dated September 15, 2010 (``SCAGO
Letter''). The letters were an exhibit to the RSA Letter, supra note
49.
---------------------------------------------------------------------------

    Some commenters stated that the negative impact of a failed bid in
a competitive bid transaction can be prevented by allowing the
financial advisor to bid on the transaction.\92\ One commenter cited
the ``dramatic effect failed bids'' had on the marketplace in the last
few years and suggested that an exception to the prohibition for
competitive bid transactions would avoid, ``exacerbating the risk of
failed bids that might otherwise occur.'' And further suggested that a
financial advisor ``* * * should not conduct an auction in a
competitively bid transaction and participate as a bidding underwriter
on the same issue.'' \93\ One commenter stated that it has not had a
failed bid transaction \94\ and others stated that they have seen
transactions in which no bid was placed or the dealer provided the only
bid.\95\ Another commenter argued that when a failed bid occurs ``it is
either a function of very unusual and difficult market conditions or an
issue that likely should have been sold on a negotiated basis to begin
with (perhaps the issue was required to be sold competitively as
required by state law).'' While another stated, ``When we are hired as
municipal advisor we pledge to the issuer that, if permitted, we will
submit a bid for their bonds,''

which guarantees that a failed bid will not occur.\96\
---------------------------------------------------------------------------

    \92\ See BDA Letter, supra note 16 and Eastern Bank Letter,
supra note 19.
    \93\ See SIFMA Letter, supra note 17.
    \94\ See RSA Letter, supra note 49.
    \95\ See DeWaay Financial Network, Letter from Mark Detter, Vice
President dated September 24, 2010 (``DeWaay Letter'') and Stone &
Youngberg Letter, supra note 49 (on a non-rated transaction in a
state where competitive bidding is compulsory).
    \96\ See Piper Letter, supra note 17 and Hilliard Letter, supra
note 16.
---------------------------------------------------------------------------

    Some commenters noted that existing market practice makes a notice
of the competitive bid available five to seven days prior to the sale
and that such notice would be a good rule of practice to allow bidders
to review information, meet any internal processes and conduct any due
diligence that they require.\97\ One commenter also noted that five
days advance notice is adequate and is ``about the time of forward
focus for underwriters. Anything longer will not be beneficial.'' \98\
Other commenters stated that a five to ten day notice requirement would
be helpful with competitive bid transactions.\99\
---------------------------------------------------------------------------

    \97\ See D.A. Davidson Letter, supra note 16; Eastern Bank
Letter, supra note 19; Piper Letter, supra note 17; and Stone &
Youngberg Letter, supra note 49.
    \98\ See Hilliard Letter, supra note 16.
    \99\ See BDA Letter, supra note 16; Hilliard Letter, supra note
16; Piper Letter, supra note 17; SIFMA Letter, supra note 17; Smith,
Murdaugh, Little & Bonham, L.L.P., Letter from W. James Murdaugh,
Jr. dated September 29, 2010 (``Smith Letter''); Young & Brooks
Letter, supra note 71; and Zions Letter, supra note 78.
---------------------------------------------------------------------------

    Commenters did not recognize situations in which the financial
advisor would have to resign in order to submit a bid to underwrite a
competitive bid transaction, especially because of the wide use of the
electronic bidding process.\100\ One of the commenters noted, ``Nearly
all competitive sales in our markets utilize a third party electronic
platform to receive the bids,'' which precludes a financial advisor
from manipulating the results and provides assistance with eliminating
concerns regarding such practice. Another stated, ``As financial
advisor we facilitate the setting up of the bid process but the
access'' is handled by the issuer. One of the commenters requested that
the MSRB consider modifications to the proposed amendments that would
allow a financial advisory firm to bid on a competitive bond issuance
through an ``* * * independent electronic bidding system (e.g., PARITY)
in which the financial advisory firm does not have access to bid
information.'' \101\
---------------------------------------------------------------------------

    \100\ See D.A. Davidson Letter, supra note 16; Eastern Bank
Letter, supra note 19; Hilliard Letter, supra note 16; Piper Letter,
supra note 17; Stone & Youngberg Letter, supra note 49 and Zions
Letter, supra note 78.
    \101\ See Allen Letter, supra note 71.
---------------------------------------------------------------------------

    One commenter stated, ``there are some situations where a financial
advisor does not conduct the bid process for an issuer, but this is
typically in the case of very large and very sophisticated issuers. In
most cases issuers are ill-equipped to manage the bidding process, and
would be negatively impacted if they attempted to do so.'' \102\
Another commenter stated, in general, as financial advisor they do not
conduct the bid process but they would assist the issuer in evaluating
bids that issuers receive in a sealed bid process and suggested that it
would be good practice to require that any dealer financial advisor
that is bidding on a competitive sale for an issuer be required to
submit its bid electronically through a third party independent
platform.\103\ Another noted, ``Electronic bidding platforms are a
viable option if those services are readily available to an issuer at a
cost that is not prohibitive.'' \104\
---------------------------------------------------------------------------

    \102\ See RSA Letter, supra note 49.
    \103\ See Piper Letter, supra note 17.
    \104\ See DeWaay Letter, supra note 105.
---------------------------------------------------------------------------

    Finally, other commenters argued that any proposed changes to Rule
G-23 should apply to negotiated sales only and not to competitive sales
and that the financial advisor should not be permitted to serve as
underwriter on a negotiated transaction unless ``the issuer is afforded
the opportunity to hire an independent financial advisor to monitor the
FA's structuring and the underwriter's pricing of the negotiated
issue.'' Another argued that they could cite many examples in which the
flexibility of a negotiated refunding has allowed issuers to generate
savings that would have been missed or reduced by selling at
competitive sale.\105\
---------------------------------------------------------------------------

    \105\ See BDA Letter, supra note 16; MIS Letter, supra note 72;
and Piper Letter, supra note 17.
---------------------------------------------------------------------------

    MSRB Response. The MSRB does not believe that the use of electronic
bidding platforms mitigates the conflict of interest posed by a dealer
financial advisor's switching to an underwriter role, in part, because
such platforms are not necessarily available to all issuers. Further,
the MSRB does not believe that requiring additional advance notice of a
competitive sale would provide adequate protections against conflicts
of interest. As stated by a non-dealer financial advisor, ``a financial
advisor may also control or influence the credit enhancement and
ratings process. Whether to apply for insurance and/or a rating, which
ratings service to use and structural considerations like reserve or
coverage requirements can all impact the outcome of a competitive
sale.'' \106\ The MSRB believes that involvement in this process
provides a dealer financial advisor with information that can provide
an unfair advantage when such dealer participates in a competitive bid
transaction.
---------------------------------------------------------------------------

    \106\ See Specialized Public Finance Letter, supra note 6.
---------------------------------------------------------------------------

Effective Date/Transitional Rule
    Some commenters noted that immediate implementation of the proposed
amendments to prohibit a dealer financial advisor from serving as
underwriter on an issue would cause disorder in the market because of
existing contractual relationships. Commenters suggested various
transitional time frames to allow market participants adequate time to
comply with any changes.\107\ One commenter suggested that ``the MSRB
delay its effective date or continue to apply current Rule G-23 to
those financial advisory relationships that are in place at the time
the modified Rule is enacted.'' \108\Another requested that ``the MSRB
include a transitional rule and time period to allow issuers, dealers
and financial advisors time to review their current engagements and
business practices and to take action to conform to, and comply with,
any new rules.'' \109\
---------------------------------------------------------------------------

    \107\ See BDA Letter, supra note 16; Baum Letter, supra note 16;
and SIFMA Letter, supra note 17.
    \108\ See RBC Letter, supra note 17.
    \109\ See BDA Letter, supra note 16.
---------------------------------------------------------------------------

    MSRB Response. The MSRB has requested that the proposed rule change
be made effective for new issues for which the Time of Formal Award (as
defined in Rule G-34(a)(ii)(C)(1)(a)) occurs more than six months after
SEC approval to allow issuers of municipal securities time to finalize
any outstanding transactions that might be affected by the proposed
rule change.
Miscellaneous
    Conduit Issues. One dealer financial advisor provided an example of
services that it provides to its hospital clients. The commenter noted
that such clients often pursue multiple Federal credit enhancement
programs and must engage a financial advisor to assist and support them
as they proceed through certain Federal processes. If at some point
during the process, a client determines to pursue one Federal program
over another, this commenter states that ``the dealer engaged as
financial advisor would be unable to serve as the client's
underwriter.'' The commenter also suggests this is detrimental to the
client because of ``unnecessary project delays'' and may lead the
client to ``select an underwriter inexperienced in structuring and
issuing'' certain types of financing structures.\110\
---------------------------------------------------------------------------

    \110\ See Red Capital Markets, LLC, Letter from Kevin J.
Mainelli, Managing Director dated September 30, 2010 (``Red Capital
Letter'').
---------------------------------------------------------------------------

    Another commenter requested a specific exemption for ``corporate
(not

for profit and for profit) conduit borrowers'' because of their
expectation, ``to be treated in the same manner as they are treated in
the corporate advisory and underwriting context.'' \111\
---------------------------------------------------------------------------

    \111\ See SIFMA Letter, supra note 17; see also BMO Letter,
supra note 19.
---------------------------------------------------------------------------

    MSRB Response. Rule G-23 does not preclude a dealer from serving as
financial advisor to a conduit borrower on an issuance of municipal
securities and the proposed amendments would not prohibit the dealer
from providing underwriting services for such issue of the conduit
issuer so long as it has not also become the financial advisor to the
conduit issuer.
    Principal Transactions by Financial Advisors. One commenter noted
that an important issue to be considered is that financial advisors
``should not be allowed to serve as a principal in any municipal
transaction which includes a swap counter party, GIC provider or the
reinvestment of proceeds.'' \112\
---------------------------------------------------------------------------

    \112\ See FirstSouthwest/Mr. Feinberg Letter, supra note 74.
---------------------------------------------------------------------------

    MSRB Response. The MSRB will take this comment under advisement
when it considers the fiduciary duty of municipal advisors, as mandated
by Dodd-Frank.
    Bank Loans. One commenter noted that any amendments to the rule
should prohibit the activities of financial advisors, dealer banks and
affiliated bank portfolios from doing indirectly what they are
prohibited from doing directly. Another noted that the MSRB should not
adopt any amendments that will prevent a national bank that provides
financial advisory services to municipalities from purchasing municipal
securities from its municipal clients.\113\
---------------------------------------------------------------------------

    \113\ See Baum Letter, supra note 16 and Zions Letter, supra
note 78.
---------------------------------------------------------------------------

    MSRB Response. The MSRB notes that a bank's purchase of an issuer
client's municipal securities is covered by Rule G-23. However, the
proposed amendments would not preclude true loans that are not
municipal securities under the Act made by banks to municipal issuers.
    Competitiveness. One commenter argued, ``It has been difficult for
a broker dealer to compete when a non regulated competitor is able to
buy business rather than earn it. But now proposed amendments to G-23
seem to be a trade off, further placing broker dealers in a non
competitive situation.'' Another stated that the proposed amendments
are anti-competitive and potentially harmful to municipalities on their
new issues. Finally, another argued, ``To adopt a rule change that
narrows the free choice of state and local governments, even if with
the intent to protect their interest, would appear to be inconsistent
with fundamental principles of federalism.'' \114\
---------------------------------------------------------------------------

    \114\ See Baird Letter, supra note 17; Fulbright Letter, supra
note 19; and Hilliard Letter, supra note 16.
---------------------------------------------------------------------------

    MSRB Response. Rule G-23 was adopted as part of the MSRB's ``fair
practice'' rules \115\ with the intent to establish standards of
ethical conduct for dealer financial advisors. The Board has long noted
that a dealer financial advisor acts in a ``fiduciary capacity'' as
agent for a governmental unit. The role and interests of the dealer
financial advisor are ``significantly different'' from the role and
interests of a dealer acting as an underwriter for the same
governmental unit. Often, when a dealer financial advisor switches
roles to underwrite a transaction, the issuer does not fully understand
the implications of the ending of the financial advisory relationship
with the issuer (which ends the dealer's fiduciary obligation to the
issuer) and the arm's length relationship that is necessary due to the
dealer financial advisor's becoming the underwriter on the transaction.
Further, under Dodd-Frank, the Board will be considering the adoption
of fair practice rules applicable to non-dealer financial advisors and
other municipal advisors, thereby promoting a more equalized regulatory
burden on both dealers and municipal advisors. On balance, dealer
financial advisors will not be placed at a competitive disadvantage
with non-dealer financial advisors as a result of the proposed rule
change.
---------------------------------------------------------------------------

    \115\ See Exchange Act Rel. No. 13987 (September 22, 1977).
---------------------------------------------------------------------------

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate 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 or disapprove 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-2011-03 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MSRB-2011-03. 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 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 MSRB's offices. 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-2011-03 and should be submitted on or before March
21, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\116\
---------------------------------------------------------------------------

    \116\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-4391 Filed 2-25-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 123 (Wednesday, June 26, 2019)]
[Notices]
[Pages 30104-30105]
[FR Doc No: 2019-13585]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings #1

    Take notice that the Commission received the following electric
corporate filings:

    Docket Numbers: EC19-104-000.
    Applicants: Hartree Partners, LP, Griffith Energy LLC, Cogen
Technologies Linden Venture, L.P., East Coast Power Linden Holding,
L.L.C., Footprint Power Salem Harbor Development LP, Brookfield Asset
Management Inc.
    Description: Application for Authorization Under Section 203 of the
Federal Power Act, et al. of Hartree Partners, LP, et. al.
    Filed Date: 6/19/19.
    Accession Number: 20190619-5196.
    Comments Due: 5 p.m. ET 7/10/19.

    Take notice that the Commission received the following exempt
wholesale generator filings:

    Docket Numbers: EG19-138-000.
    Applicants: RE Rambler LLC.
    Description: Notice of Self-Certification of Exempt Wholesale
Generator Status of RE Rambler LLC.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5044.
    Comments Due: 5 p.m. ET 7/11/19.

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER10-3077-006; ER10-3071-006; ER10-3074-006; ER10-
3075-006; ER10-3076-006; ER14-1342-003; ER14-608-003; ER15-876-003;
ER16-1644-003; ER17-1214-002; ER19-537-002.
    Applicants: CalPeak Power--Border LLC, CalPeak Power--Enterprise
LLC, CalPeak Power--Panoche LLC, CalPeak Power--Vaca Dixon LLC, CalPeak
Power LLC, Midway Peaking, LLC, Malaga Power, LLC, MRP San Joaquin
Energy, LLC, High Desert Power Project, LLC, MRP Generation Holdings,
LLC, Coso Geothermal Power Holdings, LLC.
    Description: Notice of Change in Status of CalPeak Power--Border
LLC, et. al.
    Filed Date: 6/19/19.
    Accession Number: 20190619-5132.
    Comments Due: 5 p.m. ET 7/10/19.

    Docket Numbers: ER15-1682-007.
    Applicants: TransCanyon DCR, LLC.
    Description: Compliance filing: Formula Rate Template Second
Compliance Filing for ADIT to be effective 6/27/2019.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5072.
    Comments Due: 5 p.m. ET 7/11/19.

    Docket Numbers: ER19-1503-001.
    Applicants: Midcontinent Independent System Operator, Inc., Entergy
Services, LLC.
    Description: Tariff Amendment: 2019-06-20_Deficiency Response re
Entergy OpCos Att O Revisions Regarding ADIT to be effective 6/1/2019.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5071.
    Comments Due: 5 p.m. ET 7/11/19.

    Docket Numbers: ER19-1576-001.
    Applicants: Duke Energy Progress, LLC, Duke Energy Carolinas, LLC.
    Description: Compliance filing: DEP Attachment H.1 (DEP Formula
Rate) Compliance Filing to be effective 5/15/2019.

    Filed Date: 6/20/19.
    Accession Number: 20190620-5021.
    Comments Due: 5 p.m. ET 7/11/19.

    Docket Numbers: ER19-2208-000.
    Applicants: Pacific Gas and Electric Company.
    Description: Sec.  205(d) Rate Filing: First Amendment to Llagas
Energy Storage SGIA (SA 387) to be effective 8/18/2019.
    Filed Date: 6/19/19.
    Accession Number: 20190619-5135.
    Comments Due: 5 p.m. ET 7/10/19.

    Docket Numbers: ER19-2209-000.
    Applicants: Midcontinent Independent System Operator, Inc.,
MidAmerican Energy Company.
    Description: Sec.  205(d) Rate Filing: 2019-06-20_SA 3322 ATXI-MEC-
ITC T-T (MVP 7) to be effective 6/20/2019.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5018.
    Comments Due: 5 p.m. ET 7/11/19.

    Docket Numbers: ER19-2210-000.
    Applicants: Midcontinent Independent System Operator, Inc.
    Description: Sec.  205(d) Rate Filing: 2019-06-20_SA 3323 Prairie
State Solar-Ameren Illinois GIA (J808) to be effective 6/6/2019.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5033.
    Comments Due: 5 p.m. ET 7/11/19.

    Docket Numbers: ER19-2211-000.
    Applicants: Southwestern Public Service Company.
    Description: Sec.  205(d) Rate Filing: SPS-Multi Pty-Kiowa IA-SPS
711-0.0.0 to be effective 6/21/2019.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5055.
    Comments Due: 5 p.m. ET 7/11/19.

    Docket Numbers: ER19-2212-000.
    Applicants: CFE International LLC.
    Description: Sec.  205(d) Rate Filing: normal filing 2019 to be
effective 6/21/2019.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5068.
    Comments Due: 5 p.m. ET 7/11/19.

    Docket Numbers: ER19-2213-000.
    Applicants: Florida Power & Light Company.
    Description: Sec.  205(d) Rate Filing: FPL and Seminole Rate
Schedule No. 327 Revisions to Exhibit A to be effective 6/21/2019.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5075.
    Comments Due: 5 p.m. ET 7/11/19.

    Docket Numbers: ER19-2214-000.
    Applicants: Milford Wind Corridor Phase I, LLC.
    Description: Compliance filing: Request for Cat. 1 Seller Status in
the SW Region & Revised MBR Tariff to be effective 6/21/2019.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5093.
    Comments Due: 5 p.m. ET 7/11/19.

    Docket Numbers: ER19-2215-000.
    Applicants: Milford Wind Corridor Phase II, LLC.
    Description: Sec.  205(d) Rate Filing: Request for Cat. 1 Seller
Status in the SW Region & Revised MBR Tariff to be effective 6/21/2019.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5097.
    Comments Due: 5 p.m. ET 7/11/19.

    Docket Numbers: ER19-2216-000.
    Applicants: Agua Caliente Solar, LLC.
    Description: Sec.  205(d) Rate Filing: Revisions to Market-Based
Rate Tariff and Requests for Waivers to be effective 6/21/2019.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5107.
    Comments Due: 5 p.m. ET 7/11/19.

    Take notice that the Commission received the following electric
securities filings:

    Docket Numbers: ES19-30-000.
    Applicants: GridLiance West LLC.
    Description: Amendment to May 17, 2019 Application [Revised Exhibit
D] under Section 204 of the Federal Power Act for Authorization to
Issue Securities of GridLiance West LLC.
    Filed Date: 6/20/19.
    Accession Number: 20190620-5036.
    Comments Due: 5 p.m. ET 7/1/19.

    Docket Numbers: ES19-35-000.
    Applicants: Michigan Electric Transmission Company, LLC.
    Description: Application under Section 204 of the Federal Power Act
for Authorization to Issue Securities of Michigan Electric Transmission
Company, LLC.
    Filed Date: 6/19/19.
    Accession Number: 20190619-5173.
    Comments Due: 5 p.m. ET 7/10/19.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: June 20, 2019.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2019-13585 Filed 6-25-19; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 88, Number 189 (Monday, October 2, 2023)]
[Notices]
[Page 67861]
[FR Doc No: 2023-21582]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No.: FAA-2022-0767; Summary Notice No.-2023-34]

Petition for Exemption; Summary of Petition Received; Flexjet,
LLC

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Notice.

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

SUMMARY: This notice contains a summary of a petition seeking relief
from specified requirements of Federal Aviation Regulations. The
purpose of this notice is to improve the public's awareness of, and
participation in, the FAA's exemption process. Neither publication of
this notice nor the inclusion nor omission of information in the
summary is intended to affect the legal status of the petition or its
final disposition.

DATES: Comments on this petition must identify the petition docket
number and must be received on or before October 23, 2023.

ADDRESSES: Send comments identified by docket number FAA-2022-0767
using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S.
Department of Transportation, 1200 New Jersey Avenue SE, Room W12-140,
West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue SE, Washington, DC 20590-0001, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments
from the public to better inform its rulemaking process. DOT posts
these comments, without edit, including any personal information the
commenter provides, to http://www.regulations.gov, as described in the
system of records notice (DOT/ALL-14 FDMS), which can be reviewed at
http://www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at
http://www.regulations.gov at any time. Follow the online instructions
for accessing the docket or go to the Docket Operations in Room W12-140
of the West Building Ground Floor at 1200 New Jersey Avenue SE,
Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Nia Daniels,<PHONE_NUMBER>, Office of
Rulemaking, Federal Aviation Administration, 800 Independence Avenue
SW, Washington, DC 20591.
    This notice is published pursuant to 14 CFR 11.85.

    Issued in Washington, DC, on September 26, 2023.
Brandon Roberts,
Executive Director, Office of Rulemaking.

Petition For Exemption

    Docket No.: FAA-2022-0767.
    Petitioner: Flexjet, LLC.
    Section of 14 CFR Affected: 135.152(j).
    Description of Relief Sought: Flexjet, LLC petitions for an
exemption from 14 CFR 135.152(j) that would allow the Gulfstream 450 to
meet the flight data recording requirements of part 91, Appendix E and
Sec.  91.609(c)(1), instead of the 88 required parameters detailed in
Sec.  135.152(h). As these aircraft do not have an 88-parameter FDR
installed, such relief is necessary until such time that Gulfstream
makes the components available.

[FR Doc. 2023-21582 Filed 9-29-23; 8:45 am]
BILLING CODE 4910-13-P