MSRB NOTICE 2004-21 (JUNE 24, 2004)

MSRB WILL MAKE FORM RTRS AVAILABLE ON-LINE

On July 1, 2004, the Municipal Securities Rulemaking MSRB ("the MSRB" or "MSRB") will make available an on-line form, Form RTRS, in connection with real-time transaction reporting.  All brokers, dealers and municipal securities dealers (“dealers”) registered with the MSRB will be required to complete the form.

Access to the form will be through the same system that allows dealers to electronically update Electronic Mail Contacts pursuant to rule G-40 (“G-40 system”)[1].  Prior to Form RTRS being available, dealers are encouraged to make sure that they have a current username and password for the G-40 system.  Additional instructions on how to access and complete the form can be found here.

Purpose

Real-time transaction reporting will soon be effective[2].  The MSRB is taking a number of steps to ensure that the transition from end-of-day batch reporting to real-time messaging is successful.  To that end, the MSRB must have current, accurate information about each municipal securities dealer.

The information collected on Form RTRS will provide for a smooth transition in several ways: 

•    New types of information are being collected which are required for the Real-Time Transaction Reporting System, which were not required for the current Transaction Reporting System. 

•    Dealers will be allowed to update their information, removing a potential source of errors. 

•    Information collected on the form will allow testing to be tailored to the needs of the individual dealers, making testing more efficient.

•    Dealers not required to report transactions can formally notify the MSRB of this fact, allowing MSRB staff to focus on dealers that will be reporting.

By providing an on-line, interactive form, the MSRB wishes to make completion of Form RTRS as efficient and simple as possible.  When a dealer first views the form, most information on the form will already be filled in from current MSRB records.  The role of the person completing the form will be to check the form for completeness and accuracy, and supply new or missing information.

Rule Filing

On June 1, 2004, the Board filed a proposed rule change with the Securities and Exchange Commission ("SEC") regarding Rule G-14, on transaction reporting, Rule G-12(f),on automated comparison of inter-dealer transactions, and the implementation of a facility for real-time transaction reporting and price dissemination (the Real-Time Transaction Reporting System or RTRS)[3].  Under the proposed rule change, each dealer will be required to provide the MSRB with information needed to process transactions correctly on a new form, Form RTRS.  The dealer will use the form to indicate the method it will use to submit trade reports, its broker symbol, the identity of any intermediary or agent it will use to report transactions, contact information for dealer testing and operations staff, and whether the dealer acts in the capacity of a broker's broker.

Who Must Complete Form RTRS

All dealers registered with the MSRB must complete Form RTRS.  The form must be completed by a registered municipal principal or by an executive officer of the firm.

The form must be completed and submitted on the web site.  Forms mailed in will be returned to sender.

Some municipal securities (e.g. municipal fund securities) are exempt from transaction reporting under rule G-14.  Firms that deal only in municipal securities exempt from transaction reporting will be able to complete an abbreviated version of the form.

Form Used for Test Planning

The June 1, 2004 filing also states that each dealer must be prepared to test its use of RTRS no later than three months before January 2005 (that is, by October 1, 2004) and must schedule a test date by that time unless it has already successfully tested its RTRS capabilities. 

Completing Form RTRS will allow MSRB staff to tailor the testing requirements to the situation of the individual dealer, and allows the dealer to designate a person whom the MSRB staff should contact to arrange testing.  Additional information about testing for RTRS can be found here


[1] Rule G-40 requires that all dealers appoint a Primary Electronic Mail Contact, and provide the MSRB with certain information about the contact.  In addition, dealers are required to submit updates to the contact information electronically.  To facilitate electronic updates, the MSRB has provided all Electronic Mail Contacts with a username and password, which allows access to a secure system via the Internet.  The same secure system, and the same usernames and passwords, will be used to electronically submit Form RTRS.

[2] The current planned effective date of real-time reporting is January 2005.

[3] File No. SR-MSRB-2004-02, which can be found on www.msrb.org as notice 2004-13.