Notice2022-13041
Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Consisting of Amendments to Certain Administrative Rules and Articles of the By-Laws of the Municipal Securities Rulemaking Board Relating to the MSRB's Officers
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 17, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 117 (Friday, June 17, 2022)</title>
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[Federal Register Volume 87, Number 117 (Friday, June 17, 2022)]
[Notices]
[Pages 36558-36560]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-13041]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95094; File No. SR-MSRB-2022-04]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change Consisting of Amendments to Certain Administrative Rules and
Articles of the By-Laws of the Municipal Securities Rulemaking Board
Relating to the MSRB's Officers
June 13, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on June 7, 2022 the Municipal Securities
Rulemaking Board (``MSRB'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the 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 filed with the Commission a proposed rule change
consisting of amendments to MSRB Rules A-3, A-4, A-5, and A-8 and
Articles 3, 4, 5, 8, 11, 12, 13, 14, 15, and 16 of the By-Laws of the
Municipal Securities Rulemaking Board (``Bylaws'') (the ``proposed rule
change'') relating to the MSRB's officers. The MSRB has designated the
proposed rule change as concerned solely with the administration of the
self regulatory organization under Section 19(b)(3)(A)(iii) of the Act
\3\ and Rule 19b-4(f)(3) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. As described below, the
proposed rule change would modify provisions regarding the Board's
officers.
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\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(3).
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The text of the proposed rule change is available on the MSRB's
website at <a href="http://www.msrb.org/Rules-and-Interpretations/SEC-Filings/2022-Filings.aspx">www.msrb.org/Rules-and-Interpretations/SEC-Filings/2022-Filings.aspx</a>, at the MSRB's principal office, and at the Commission's
Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the MSRB included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The MSRB has prepared summaries, set forth in Sections
A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Background
The Bylaws relate to the Board's governance and address topics such
as Board membership, meetings, and officers, among other things. The
current Bylaws are organized into 16 Articles (the proposed rule change
would organize the Bylaws into 14
[[Page 36559]]
Articles), and certain of the Articles in the Bylaws parallel MSRB
administrative rules. MSRB Rules A-2 through A-10 are paralleled in the
Bylaws and, when the Board amends any of these administrative rules,
the paralleled Article in the Bylaws is amended also.\5\ The Bylaws are
publicly available on the MSRB's website.\6\
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\5\ The MSRB amends Articles in the Bylaws that are not
administrative rules pursuant to current Article 16 of the Bylaws
(the proposed rule change would move the text of Article 16 to
Article 14).
\6\ The Bylaws are available at <a href="https://www.msrb.org/-/media/Files/Goverance/By-Laws.ashx">https://www.msrb.org/-/media/Files/Goverance/By-Laws.ashx</a>?
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Designation of Officers of the Board
MSRB Rule A-5 and Article 5 of the Bylaws contain provisions
regarding officers and employees of the Board and, among other things,
designate the Board's required officer positions. Current MSRB Rule A-5
and Articles 5, 12, 13 and 14 of the Bylaws designate a Chair, Vice
Chair, President, Secretary, General Counsel, Treasurer, Assistant
Treasurer and Assistant Secretary. The proposed rule change would
narrow the officer positions designated in MSRB Rule A-5 and the Bylaws
to a Chair, Vice Chair, President and Secretary. The proposed rule
change would provide the Board with increased flexibility by
designating only essential officer positions in MSRB Rule A-5 and the
Bylaws and, accordingly, allowing the Board to create additional
officer positions as the Board determines is appropriate in light of
governance needs, without requiring the Board to amend the Bylaws.
While providing the Board with increased flexibility, the proposed rule
change still provides the Board with the officer positions required by
the Virginia Nonstock Corporation Act,\7\ pursuant to which the Board
is organized.
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\7\ Va. Code Ann. Sec. 13.1-872.
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The proposed rule change would also expressly reflect in MSRB Rule
A-5(a) and Article 5(a) of the Bylaws that the Board may appoint
additional officers as shall be stated in a resolution of the Board, as
provided for in the Virginia Nonstock Corporation Act.\8\ The proposed
rule change would also replace the reference to ``personnel'' in MSRB
Rule A-5(c) and Article 5(c) of the Bylaws with ``employees'' to match
the title of Rule A-5 and Article 5 of the Bylaws, which is ``Officers
and Employees of the Board.''
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\8\ Va. Code Ann. Sec. 13.1-872(A).
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The Bylaws also include Articles which describe each officer
position. The proposed rule change would move the Bylaw Articles which
describe the President and Secretary positions and modify the
descriptions of these officer positions to better reflect their
respective responsibilities. Current Article 12 describes the President
position. The proposed rule change would move this description to
Article 11, which is currently titled ``Reserved,'' and add language to
reflect the President's responsibility for advancing the Board's
strategic goals and general supervision, management and control.
Current Article 14(a) describes the Secretary position. The
proposed rule change would move this description to Article 12, which
currently describes the President position, and add language to
expressly reflect the Secretary's responsibility for preparing minutes
of all meetings of the Board and maintaining records of all actions
taken by the Board without a meeting by unanimous written consent.
The proposed rule change would delete the General Counsel,
Treasurer, Assistant Treasurer and Assistant Secretary from MSRB Rule
A-5 and Articles 5, 13 and 14 of the Bylaws. Specifically, the proposed
rule change would remove the description of the General Counsel
position in Article 13, the description of the Treasurer position in
Article 14(b), and the descriptions of the Assistant Secretary and
Assistant Treasurer position in Article 14(c). As a result of such
deletions, current Article 15 relating to the Board's policies and
procedures would move to Article 13 and current Article 16 relating to
amendment of By-Laws provisions other than rules of the Board would
move to Article 14.
The proposed rule change would also remove the phrase ``of the
Board'' and ``to the Board'' following references to the officer
positions to improve consistency in the manner in which officer
positions are referred to in the MSRB's administrative rules and
Bylaws.
Addition of Vice Chair to Compensation Listing
MSRB Rule A-3(d) and Article 3(d) of the Bylaws relate to the
Board's compensation and expenses. The proposed rule change would add
the Vice Chair position to the list of positions for which the Board
may provide reasonable compensation to correct the omission of the Vice
Chair position from this listing. The proposed rule change would
reflect the MSRB's current policy, which is to provide reasonable
compensation to the Vice Chair. The proposed rule change would also
remove references to ``MSRB'' in MSRB Rule A-3(d) and Article 3(d) of
the Bylaws to improve consistency in the MSRB's administrative rules
and Bylaws, which both use the term ``Board'' as opposed to ``MSRB''.
Removal of Notice Period for Chair and Vice Chair Resignations
MSRB Rule A-5(b) and Article 5(b) of the Bylaws detail matters
relating to the election, term, and resignation of the Chair and Vice
Chair. The proposed rule change would remove provisions in MSRB Rule A-
5(b) and Article 5(b) of the Bylaws specifying a minimum and maximum
notice period for resignations of the Chair and Vice Chair. The removal
of a notice period would better reflect the resignation process for
officers under the Virginia Nonstock Corporation Act which provides
that an officer may resign at any time.\9\ The removal of a notice
period also would protect the public interest by permitting the Chair
or Vice Chair to resign if circumstances arise that call for a notice
period shorter than ten days, or no notice period at all.\10\
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\9\ See Va. Code Ann. Sec. 13.1-874(A).
\10\ MSRB rules provide for disqualification and removal from
the Board under certain circumstances. See MSRB Rule A-3(c)(ii)
(providing that a Board member's change in employment or other
circumstances that results in a conflict with Board composition
requirements disqualifies the member from serving on the Board as of
the date of the change); MSRB Rule A-3(c)(iii) (providing that the
Board may remove a member if it finds that the member has willfully
violated any provision of the Act, any rule or regulation of the
Commission thereunder, or any rule of the Board or has abused his or
her authority or has otherwise acted, or failed to act, so as to
affect adversely the public interest or the best interests of the
Board). Circumstances could arise, however, in which the public
interest may be better served by an accelerated departure from the
Board through an immediate resignation.
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Election of Chair and Vice Chair and Appointment of Other Officers
The proposed rule change would revise MSRB Rule A-5(b) and Article
5 of the Bylaws to make explicit that the provisions regarding
election, terms, resignation and vacancy therein relate solely to the
Chair and Vice Chair positions and not to other officer positions. The
proposed rule change would also explicitly state that persons serving
as President \11\ and Secretary shall be appointed by resolution of the
Board.
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\11\ Pursuant to current Article 12 of the Bylaws (which the
proposed rule change would move to Article 11), the person employed
as the Chief Executive Officer shall hold the office of President.
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2. Statutory Basis
The MSRB has adopted the proposed rule change pursuant to Sections
15B(b)(2)(I) and 15B(b)(2)(C) of the Exchange Act.\12\ Section
15B(b)(2)(I) of the Exchange Act provides that the MSRB's rules shall
provide for the
[[Page 36560]]
operation and administration of the Board, including the selection of a
Chairman from among the members of the Board, the compensation of the
members of the Board, and the appointment and compensation of such
employees, attorneys, and consultants as may be necessary or
appropriate to carry out the Board's functions under this section.\13\
Section 15B(b)(2)(C) of the Exchange Act provides that the MSRB's rules
be designed to protect investors, municipal entities, obligated
persons, and the public interest.\14\
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\12\ 15 U.S.C. 78o-4(b)(2)(I), 78o-4(b)(2)(C).
\13\ 15 U.S.C. 78o-4(b)(2)(I).
\14\ 15 U.S.C. 78o-4(b)(2)(C).
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The proposed rule change is consistent with Section 15B(b)(2)(I) of
the Exchange Act \15\ because the amendments relating to the
designation of officers of the Board, the addition of the Vice Chair to
the compensation listing, the removal of the notice provision for the
Chair and Vice Chair positions, and the election of the Chair and Vice
Chair and appointment of other officers all deal with matters relating
to the operation and administration of the Board.
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\15\ 15 U.S.C. 78o-4(b)(2)(I).
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The proposed rule change is also consistent with Section
15B(b)(2)(C) of the Exchange Act \16\ because it would protect the
public interest by eliminating the notice period for resignations of
the Chair and Vice Chair so that the Chair or Vice Chair could resign
on shorter than ten days' notice, or no notice at all, if the
circumstances would be better addressed by an accelerated departure
from the Board.
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\16\ 15 U.S.C. 78o-4(b)(2)(C).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Section 15B(b)(2)(C) of the Exchange Act requires that MSRB rules
not be designed to impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Exchange Act.\17\ The
proposed rule change relates only to the administration of the Board
and would not impose requirements on dealers, municipal advisors or
others. Accordingly, the MSRB does not believe that the proposed rule
change would result in any burden on competition.
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\17\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \18\ and paragraph (f) of Rule 19b-4
thereunder.\19\ At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
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\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 17 CFR 240.19b-4(f).
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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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#7002051c155d131f1d1d151e0403300315135e171f06"><span class="__cf_email__" data-cfemail="d1a3a4bdb4fcb2bebcbcb4bfa5a291a2b4b2ffb6bea7">[email protected]</span></a>. Please include
File Number SR-MSRB-2022-04 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549.
All submissions should refer to File Number SR-MSRB-2022-04. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the MSRB. All comments received
will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-MSRB-2022-04 and should be submitted on
or before July 8, 2022.
For the Commission, pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-13041 Filed 6-16-22; 8:45 am]
BILLING CODE 8011-01-P
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