Notice2024-17384
Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MSRB's Real-Time Transaction Reporting System and Price Dissemination Information Facility To Retire the Transmission Control Protocol Secure Socket Connection
Primary source
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Published
August 7, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 152 (Wednesday, August 7, 2024)</title>
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[Federal Register Volume 89, Number 152 (Wednesday, August 7, 2024)]
[Notices]
[Pages 64505-64507]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-17384]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100632; File No. SR-MSRB-2024-06]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change To Amend the MSRB's Real-Time Transaction Reporting System and
Price Dissemination Information Facility To Retire the Transmission
Control Protocol Secure Socket Connection
August 1, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby
given that on July 30, 2024, the Municipal Securities Rulemaking Board
(``MSRB'') filed with the Securities and Exchange Commission
(``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 to amend
the MSRB's Real-Time Transaction Reporting System and Price
Dissemination Information Facility (``IF-1'') to consolidate access by
subscribers to the real-time transaction data residing within the Real-
Time Transaction Reporting System (``RTRS'') through a web service and
to fully retire the Transmission Control Protocol secure socket
connection (``TCP secure socket connection'') (the ``proposed rule
change'').
The MSRB has filed the proposed rule change under Section
19(b)(3)(A)(iii) of the Exchange Act \3\ and Rule 19b-4(f)(6) \4\
thereunder, as a noncontroversial rule change that renders the proposed
rule change effective upon filing. The MSRB will announce the operative
date of the proposed rule change, which would be no earlier than 30
days following the filing of the proposed rule change with the
Commission, in a regulatory notice to be published on the MSRB website.
The operative date will be the earlier of nine months following the
filing date or the day by which all subscribers are deemed to have
discontinued the use of the TCP secure socket connection. During the
period leading to the operative date, the MSRB will no longer permit
new subscribers to establish new connectivity to RTRS using the TCP
secure socket connection.
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\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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The text of the proposed rule change is available on the MSRB's
website at <a href="https://msrb.org/2024-SEC-Filings">https://msrb.org/2024-SEC-Filings</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
[[Page 64506]]
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
MSRB Rule G-14, on transaction reporting, requires brokers, dealers
and municipal securities dealers (``dealers''), and associated persons
to report executed transactions in municipal securities to RTRS, with
limited exceptions. The MSRB disseminates trade reporting information
from RTRS to subscribers through certain data subscription feeds.\5\
One subscription feed offered by the MSRB is the Real-Time Transaction
Data Subscription Service (the ``Real-Time Subscription''). Currently,
subscribers to the Real-Time Subscription may connect to RTRS to obtain
real-time data through one of two methods: a TCP secure socket
connection, a broadcast service, referred to in IF-1 as a ``TCP secure
socket connection'' and referred to by subscribers as the TCP secure
socket interface, and a secure web Application Programming Interface
connection, referred to in IF-1 as the ``web service''.\6\
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\5\ The MSRB also disseminates trade reporting information free
of charge to the general public through the MSRB's centralized
Electronic Municipal Market Access (EMMA[supreg]) website.
EMMA[supreg] is a registered trademark of the MSRB.
\6\ See IF-1, MSRB Real-Time Transaction Data Subscription
Service, Access to Real-Time Service and Replay Files.
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The MSRB has utilized a socket service-based technology since the
introduction of RTRS in 2005, with the current version consisting of
the TCP secure socket connection. The MSRB later added the web service
in 2018 as an additional connectivity option to obtain real time
transaction data through the Real-Time Subscription.\7\ Since then, the
TCP secure socket connection has become less reliable than the web
service, with greater susceptibility for individual subscribers to
experience sporadic temporary connection problems.\8\ In some cases,
this can require the intervention of information technology support
resources from both the MSRB and individual subscribers for
troubleshooting and resolving such issues when they arise.
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\7\ See Exchange Act Release No. 83038 (Apr. 12, 2018), 83 FR
17200 (Apr. 18, 2018), (File No. MSRB-2018-02) available at <a href="https://www.msrb.org/sites/default/files/MSRB-2018-02-Fed-Reg.pdf">https://www.msrb.org/sites/default/files/MSRB-2018-02-Fed-Reg.pdf</a>.
\8\ These connectivity issues are confined to TCP socket service
subscribers only and are not related to RTRS, EMMA[supreg], or any
other MSRB system.
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The MSRB has determined to consolidate access by subscribers to the
Real-Time Subscription through the web service and to retire the older
TCP secure socket connection. The purpose of the proposed rule change
is to amend IF-1 to remove the reference to the TCP secure socket
connection therein to reflect its retirement. Current subscribers using
the TCP secure socket connection that wish to continue receiving the
real-time transaction data subscription would need to migrate to the
web service. The MSRB expects that, upon migration, these subscribers
would experience improvements in the consistency and reliability of
receiving trade data information in real-time.
The MSRB would announce the operative date of the proposed rule
change, which would be no earlier than 30 days following the filing of
the proposed rule change with the Commission, in a regulatory notice to
be published on the MSRB website. The operative date will be the
earlier of nine months following the filing date or the day by which
all subscribers are deemed to have discontinued the use of the TCP
secure socket connection. The MSRB intends to engage in outreach
efforts to impacted subscribers to support the transition from the TCP
secure socket connection to the web service.
Lastly, the proposed rule change also includes minor language
changes to improve the readability and technical accuracy of the rule.
These changes include adding the word ``disseminated'' to better
describe the mechanics of the Real-Time Subscription, adding the
article ``a'' to clarify the use of a single connection, and changing
``connecting with RTRS'' to ``connected to RTRS'' to more accurately
describe the connection between the web service and RTRS.
2. Statutory Basis
The MSRB believes that the proposed rule change is consistent with
Section 15B(b)(2) of the Exchange Act,\9\ which provides that the MSRB
shall propose and adopt rules to effect the purposes of the Exchange
Act with respect to, among other matters, transactions in municipal
securities effected by dealers. Section 15B(b)(2)(C) of the Exchange
Act \10\ further provides that the MSRB's rules 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.
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\9\ 15 U.S.C. 78o-4(b)(2).
\10\ 15 U.S.C. 78o-4(b)(2)(C).
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The proposed rule change would improve subscribers' experience
using the Real-Time Subscription to receive trade data. As noted above,
the TCP secure socket connection has become less reliable than the web
service, with greater susceptibility for individual subscribers to
experience sporadic temporary connection problems and requiring the
intervention and resources of information technology support resources
from both the MSRB and individual subscribers for resolving such
issues. By consolidating subscriber connection to only the web service,
the MSRB can also streamline technical support for the web service and
provide an improved user experience for subscribers.\11\ As a result,
the MSRB believes that subscribers will benefit from a common
connection with more efficient technical support and faster resolution
when any issues arise.
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\11\ Using the web service exclusively would also allow the MSRB
to perform more efficient maintenance and information technology
deployments during business hours, thereby enhancing business
continuity in addition to subscriber experience.
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These improvements in the resiliency and efficiency of the Real-
Time Subscription will further remove impediments to and perfect the
mechanism of a free and open market in municipal securities by making
it more likely that subscribers to the Real-Time Subscription receive
continuous transaction information. Therefore, the MSRB believes that
the proposed rule change satisfies the applicable requirements of
Section 15B(b)(2)(C) of the Exchange Act.\12\
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\12\ 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 \13\ 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. The
MSRB does not believe the proposed rule change to amend IF-1 would
result in any burden on competition. Therefore, the MSRB does not
believe the proposed rule change would result in any burden on
competition that is not
[[Page 64507]]
necessary or appropriate in furtherance of the purposes of the Exchange
Act. In determining whether these standards have been met, the MSRB is
guided by the MSRB's Policy on the Use of Economic Analysis in MSRB
Rulemaking.\14\ The proposed rule change consists of revisions to
remove language relating to the TCP secure socket connection to obtain
trade reporting data from RTRS.
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\13\ Id.
\14\ See Policy on the Use of Economic Analysis in MSRB
Rulemaking, available at <a href="https://www.msrb.org/Policy-Use-Economic-Analysis-MSRB-Rulemaking">https://www.msrb.org/Policy-Use-Economic-Analysis-MSRB-Rulemaking</a>. In evaluating whether there was any burden
on competition that is not necessary or appropriate in furtherance
of the purposes of the Exchange Act, the MSRB was guided by its
principles that required the MSRB to consider costs and benefits of
a rule change, its impact on efficiency, capital formation and
competition, and the main reasonable alternative regulatory
approaches. For those rule changes which the MSRB files for
immediate effectiveness under Section 19(b)(3)(A) of the Exchange
Act (15 U.S.C. 78s(b)(3)(A)), including information facility rule
fillings, while not subject to the policy, the MSRB usually focuses
its examination exclusively on the burden of competition on
regulated entities, but may also include any additional economic
analysis that the MSRB believes may inform the rulemaking process
based on the facts and circumstances.
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The proposed rule change is of a technical nature. This proposed
rule change to IF-1 would remove references to the ``TCP secure socket
connection'' for access to RTRS data to correspond to the MSRB's
planned retirement of that connection for a subset of subscribers.
Subscribers presently using the TCP secure socket connection would need
to convert to web service for messaging with RTRS. However, with the
introduction of a more modern technology infrastructure, issues for
individual subscribers using the TCP secure socket connection have
increased, and MSRB staff has spent time and resources troubleshooting
problems and restoring connectivity to individual subscribers. The MSRB
expects that such efforts would need to be continued on a longer-term
basis so long as the TCP secure socket connection is available.
Subscribers using the TCP secure socket connection are burdened with
the higher level of service disruptions and inquiries to MSRB support
staff as compared to subscribers through the web service.
By retiring the TCP secure socket connection, the MSRB is expected
to focus its resources on one method of connection, therefore improving
the reliability, availability, and supportability of the Real-Time
Subscription. This in turn will benefit the current TCP secure socket
connection users with a more reliable connection if they choose to
continue their Real-Time Subscription and migrate to the web service.
The MSRB believes the proposed rule change, while requiring some
initial adjustments by subscribers who currently use the TCP secure
socket connection to rewrite, or retrofit, their code for the use of
the web service, would reduce connection problems for subscribers and
therefore improve market efficiency in the longer term. The proposed
rule change would not modify the MSRB's administration of RTRS in
collecting and disseminating information to the EMMA[supreg] website
publicly for transactions in the municipal securities market.
Accordingly, the MSRB does not believe that the proposed rule change
would result in any burden on competition that is not necessary or
appropriate in furtherance of the Exchange Act.\15\
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\15\ 15 U.S.C. 78o-4(b)(2)(C).
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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
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Exchange Act \16\ and
Rule 19b-4(f)(6) \17\ thereunder. 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 Exchange Act.
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6).
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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 Exchange Act. Comments may be submitted
by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#3b494e575e16585456565e554f487b485e58155c544d"><span class="__cf_email__" data-cfemail="4032352c256d232f2d2d252e3433003325236e272f36">[email protected]</span></a>. Please include
File Number SR-MSRB-2024-06 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-2024-06. 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="https://www.sec.gov/rules/sro.shtml">https://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. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to File Number SR-MSRB-2024-06 and should be
submitted on or before August 28, 2024.
For the Commission, pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-17384 Filed 8-6-24; 8:45 am]
BILLING CODE 8011-01-P
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