Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by the Municipal Securities Rulemaking Board Relating to Preservation of Records

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-37304; File No. SR-MSRB-96-5]

Self-Regulatory Organizations; Notice of Filing and Immediate

Effectiveness of a Proposed Rule Change by the Municipal Securities

Rulemaking Board Relating to Preservation of Records

June 11, 1996.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on June 4,

1996, the Municipal Securities Rulemaking Board (``Board'' or ``MSRB'')

filed with the Securities and Exchange Commission (``Commission'' or

``SEC'') a proposed rule change (SR-MSRB-96-5). The proposed rule

change is described in Items I and II below, which Items have been

prepared by the Board. The Commission is publishing this notice to

solicit comments on the proposed rule change from interested persons.

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

of the Proposed Rule Change

The Board is proposing to amend rule G-9, on preservation of

records. The proposed rule change would require that brokers, dealers

and municipal securities dealers (collectively, ``dealers'') retain the

records required by rule G-8(a)(xv) for a period of three years. The

Board requests that the Commission set the effective date for the

proposed rule for 30 days after filing.

II. Self-Regulatory Organization's Statement of the Terms of Substance

of the Proposed Rule Change

In its filing with the Commission, the Board 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

texts of these statements may be examined at the places specified in

Item IV below. The Board has prepared summaries, set forth in Section

(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

Among other things, Board rule G-36 requires that, with certain

exceptions, each dealer acting as an underwriter in a primary offering

of municipal securities submit a copy of the final official statement,

if one is prepared, to the Board. Underwriters also are required to

send advance refunding documents to the Board if an offering of

municipal securities ``advance refunds'' an outstanding issue of

municipal securities.

Rule G-8(a)(xv) requires that dealers maintain a record of sending

to the Board, Forms G-36(O/S) and G-36(ARD) and the corresponding

required documentation. Rule G-9, on preservation of records, currently

does not state a time period for preservation of these records.

The proposed amendment to rule G-9 would require that dealers

retain the records required by rule G-8(a)(xv) for a period of three

years. This three-year period would coincide with the record retention

requirement for the documentation supporting proof of delivery of

official statements to purchasers of new issues securities as required

by rule G-32 on disclosures in connection with new issues.

The Board believes the proposed rule change is consistent with

Section 15B(b)(2)(G) of the Act, which requires, in pertinent part,

that the Board's rules:

prescribe records to be made and kept by municipal securities

brokers and municipal securities dealers and the periods for which

such records shall be preserved.

(B) Self-Regulatory Organization's Statement on Burden on Competition

The Board does not believe that the proposed rule change will

impose any burden on competition not necessary or appropriate in

furtherance of the purposes of the Act.

(C) Self-Regulatory Organization's Statement on Comments on the

Proposed Rule Change Received From Members, Participants, or Others

Written comments were neither solicited nor received.

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

Commission Action

Because the foregoing proposed rule change: (i) does not

significantly affect the protection of investors or the public

interest; (ii) does not impose any significant burden on competition;

(iii) was provided to the Commission for its review at least five days

prior to the filing date; and (iv) does not become operative for thirty

(30) days from the date of its filing, the Board has submitted this

proposed rule change to become effective pursuant to Section

19(b)(3)(A) of the Act and Rule 19b-4(e)(6) thereunder. In particular,

the Board believes that the proposed rule change qualifies as a ``non-

controversial filing'' in that the proposed amendment does not

significantly affect the protection of investors or the public interest

and does not impose any significant burden on competition. At any time

within sixty days of the filing of the proposed rule change, the

Commission may summarily abrogate 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 purpose of the Act.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views, and

arguments concerning the foregoing. Persons making written submissions

should file six copies thereof with the Secretary, Securities and

Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.

Copies of the submissions, all subsequent amendments, all written

statements with respect to the proposed rule change that are filed with

the Commission, and all written communications relating to the proposed

rule change between the Commission and any person, other than those

that may be withheld from the public in accordance with the provisions

of 5 U.S.C. 552, will be available for inspection and copying in the

Commission's Public Reference Room. Copies of the filing will also be

available for inspection and copying at the Board's principal offices.

All submissions should refer to File No.

[[Page 31208]]

SR-MSRB-96-5 and should be submitted by July 10, 1996.

For the Commission by the Division of Market Regulation,

pursuant to delegated authority, 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96-15508 Filed 6-18-96; 8:45 am]

BILLING CODE 8010-01-M