MSRB NOTICE 2007-36 (NOVEMBER 27, 2007)

NOTICE OF FILING OF PROPOSED RULE CHANGES TO EXTEND THE EXPIRATION OF THE THREE-HOUR EXCEPTION AND TO REQUIRE UNDERWRITER PARTICIPATION WITH DTCC'S NIIDS SYSTEM

Today the Municipal Securities Rulemaking Board (“MSRB”) filed with the Securities and Exchange Commission (the “SEC”) two proposed rule changes relating to transaction reporting of new issue municipal securities.  One proposed rule change consists of an amendment to Rule G-14, Reports of Sales or Purchases, to extend to June 30, 2008 the expiration date of the three-hour exception to the fifteen-minute reporting deadline for certain when, as and if issued transactions under Rule G-14 RTRS Procedures, paragraph (a)(ii)(C).[1]  The three-hour exception is currently set to expire on December 31, 2007.  Accordingly, the effective date for this proposed rule change is December 31, 2007.

The second proposed rule change consists of an amendment of Rule G-8, Books and Records, Rule G-9, Preservation of Records, and Rule G-34, CUSIP Numbers and New Issue Requirements, designed to improve new issue trade reporting.[2]  This proposed rule change would accelerate the timing for CUSIP number assignment and, with the exception of new issues of short-term instruments with less than nine months in effective maturity, require underwriters to: (i) submit certain information about a new issue of municipal securities to Depository Trust and Clearing Corporation’s New Issue Information Dissemination System within set timeframes; and (ii) set and disseminate a “Time of First Execution” that allows time for market participants to access necessary information in preparation for trade reporting prior to beginning trade executions in the issue.[3]  The MSRB proposes an effective date for this proposed rule change of June 30, 2008.    

BACKGROUND

MSRB Rule G-14 requires all brokers, dealers and municipal securities dealers (“dealers”) to report all transactions in municipal securities to the MSRB Real-Time Transaction Reporting System (“RTRS”) within fifteen minutes of the time of trade execution, with limited exceptions.  One exception listed in Rule G-14 RTRS Procedures, paragraph (a)(ii) is a “three-hour exception” that allows a dealer three hours to report a transaction in a when, as and if issued (“when-issued”) security if all of the following conditions apply:  (i) the CUSIP number and indicative data of the issue traded are not in the securities master file used by the dealer to process trades for confirmations, clearance and settlement; (ii) the dealer has not traded the issue in the previous year; and (iii) the dealer is not a syndicate manager or syndicate member for the issue.[4] 

The three-hour exception was designed to give a dealer time to add a security to its “securities master file” so that a trade can be reported through the dealer’s automated trade processing systems.  A securities master file contains the information about a municipal security issue that is necessary for a dealer to be able to process transactions in the issue.  It includes such items as the interest rate, dated date, interest payment cycle, and put and call schedules.  The dealer’s securities master file often contains information only for securities held in custody for customers and for securities that have been recently traded.  If a dealer trades a security that is not in its securities master file, the relevant securities information must be obtained by the dealer from an information vendor before the trade can be processed and reported.[5]  

For new issue transactions, a dealer’s access to necessary securities information depends not only on its link with an information vendor but also on whether that vendor itself has the information on the new issue.  Vendors currently obtain much of their new issue information through voluntary cooperation from underwriters.  This process does not always result in all the vendors having the necessary securities information by the time trade executions begin.  Dealers trading a new issue for the first time need the three-hour exception from the fifteen-minute trade reporting requirement for their first trades in a new issue because the securities information is not always available at the time the trade is executed.[6] 

NIIDS INITIATIVE

To address inefficiencies in the collection of new information securities data, Securities Industry and Financial Markets Association (“SIFMA”), industry members, securities information vendors, and other service providers in the municipal securities market have worked extensively with The Depository Trust and Clearing Corporation (“DTCC”) to develop a centralized system for collecting and communicating new issue securities information.  The system, called the “New Issue Information Dissemination System” (“NIIDS”), will be operated by DTCC and will act as a central collection point for standardized electronic files of new issue information provided by underwriters which will be disseminated in real-time to information vendors.

Although the amount of securities information needed for trade reporting under Rule G-14 is limited,[7] many of the automated trade processing systems used to report trades currently need more extensive securities information (essentially the information necessary to produce a trade confirmation) before a trade can be reported.  The industry initiative on NIIDS has resulted in a relatively comprehensive list of new issue securities data that will be collected and disseminated by NIIDS, including Time of Formal Award and Time of First Execution, discussed below.  DTCC plans to implement NIIDS in early 2008.[8]  Additional information about NIIDS is available on DTCC”s web site at http://www.dtcc.com/leadership/issues/reengineering/.    

DESCRIPTION OF PROPOSED RULE CHANGES

The proposed rule change prescribes timetables for submission of data to NIIDS and other underwriter procedures that are intended to ensure that all dealers have timely access to the new issue information that is needed for compliance with trade reporting requirements. 

 Amendments to Rule G-34

Currently, Rule G-34 requires underwriters[9]  to apply for CUSIP numbers within specific deadlines and to transmit a limited amount of information about a new issue such as the coupons, maturities and issue closing date to DTCC.  The rule also contains a requirement for Time of Formal Award to be disseminated to market participants that may trade the new issue.  The proposed rule change would accelerate the timing for CUSIP number assignment and, with the exception of new issues of short-term instruments with less than nine months in effective maturity, require underwriters to: (i) submit certain information about a new issue of municipal securities to DTCC’s NIIDS  System within set timeframes; and (ii) set and disseminate a “Time of First Execution” that allows time for market participants to access necessary information in preparation for trade reporting prior to beginning trade executions in the issue.

Timing of CUSIP Number Assignment

CUSIP numbers are a required data element for automated trade processing and trade reporting systems and will be a prerequisite for entry of new issue information into NIIDS.  Timely processing of new issue transactions requires that CUSIP numbers be assigned as early as possible in the underwriting process.  Rule G-34 contains various requirements for underwriters, and for dealers acting as financial advisors on competitive sales, to apply to the CUSIP Service Bureau for CUSIP number assignment.  The current deadlines are based on: the time the bond purchase agreement is executed (for underwriters in negotiated sales); the time of the issuer’s award (for dealers acting as financial advisors in competitive sales); and the time of the first execution of a trade in the issue (for underwriters in competitive sales).  The proposed rule change would set new deadlines designed to ensure CUSIP number assignment occurs as soon as possible in the underwriting process, allowing for the timely submission of new issue information to NIIDS.

For negotiated issues, the proposed rule change would require that an application must be made no later than the time that the pricing information for the issue is determined.  For a dealer acting as a financial advisor on a competitive deal, the proposed rule change would require an application for CUSIP number assignment to be made within one business day of dissemination of a notice of sale.  The proposed rule change also states a general requirement that the underwriter on a negotiated underwriting and a dealer acting as a financial advisor on a competitive deal would be required to ensure that final CUSIP number assignment occurs prior to the formal award of the new issue.[10]

Rule G-34 currently requires the underwriter in a competitive sale to apply for CUSIP numbers if an application has not already been made by the issuer or the issuer’s representative.  The MSRB understands that CUSIP numbers for competitively sold issues generally are assigned by the date of sale, but that on occasion this is not done.[11]  Dealers have noted that, in these situations, automated trade processing and real-time trade reporting for the issue may be delayed because of the time necessary for the underwriter to obtain CUSIP numbers after the formal award.  The proposed rule change would clarify the underwriter’s existing responsibility in such situations to apply for CUSIP numbers immediately after receiving the award. 

Underwriter Requirement to Provide Information to NIIDS within Certain Deadlines

The proposed rule change would require underwriters to transmit new issue information to NIIDS within deadlines that are intended to ensure that the information reaches information vendors and is further re-disseminated for use in automated trade processing systems by the time that trade executions begin in a new issue.  The specific items of information required to be submitted are those generally considered necessary for automated trade processing in an issue and are designated in the NIIDS system as items necessary for “Trade Eligibility.” 

Underwriters would be required to submit this information electronically in accordance with the methods and formats stated for NIIDS system users.  The information could be provided through computer-to-computer links or through a web interface allowing manual input of data.  Although the underwriter would be ultimately responsible for timely, comprehensive and accurate data submission, the proposed rule change would allow for use of an intermediary to accomplish this function.[12] 

NIIDS is designed so that, once CUSIP numbers are assigned to a new issue, information about the issue can be submitted as it becomes available.  The proposed rule change would require underwriters to provide information specified by NIIDS as required for Trade Eligibility as soon as it is available, with a final deadline for all such information to be provided no later than two hours after the Time of Formal Award, which would be redefined as discussed below.[13]  The proposed rule change also states that only the hours between 9:00 A.M. and 5:00 P.M. Eastern on an RTRS Business Day are counted for purposes of the time tables listed in the draft amendments.  For example, if the Time of Formal Award occurs at 6:00 P.M. Eastern, the time tables listed in the proposed rule change would not commence until 9:00 A.M. Eastern on the next RTRS Business Day.

Revised Definition of “Time of Formal Award”

The Time of Formal Award represents the earliest time that a dealer can execute transactions in a new issue and is used currently in Rule G-34 and in the proposed rule change to set certain deadlines.  The proposed rule change includes a minor change to the current definition of “Time of Formal Award” for purposes of Rule G-34 timetables.  The MSRB understands that underwriters are not always present at the time the issuer executes a bond purchase agreement or formally confirms an award of a competitive issue.  Some time may elapse between this time and the time at which the underwriter becomes aware of the issuer’s action and this delay may not be under the control of the underwriter.  To address this issue, the proposed rule change states that for purposes of Rule G-34, “Time of Formal Award” is defined as:

  • for competitive issues, the later of the time the issuer formally awards the issue or the time the issuer notifies the underwriter of the award; and,

  • for negotiated issues, the later of the time the contract to purchase the securities from the issuer is executed or the time the issuer notifies the underwriter of its execution of the agreement.  

The Time of Formal Award is one of the required information items to be submitted to NIIDS.  Therefore, it would be subject to the general requirement to be submitted as soon as it is available as well as the ultimate deadline for submission of all required data, which is two hours after the Time of Formal Award.  These requirements should ensure that all information necessary for trade reporting is available through NIIDS no later than two hours after the Time of Formal Award. 

 “Time of First Execution” and Advance Notification Requirement

The second major component of the amendments to Rule G-34 is an advance notification requirement that would ensure that all dealers have advance notification of the underwriter’s planned time for first trade executions and can be prepared to process trade executions by that time.  The MSRB understands that under current industry practices, underwriters do not always disseminate the time that they intend to begin trade executions.  Consequently, dealers that are not in the underwriting group sometimes do not know when their own transactions in the issue should begin and this may negatively affect the ability of those dealers to report their initial transactions in a timely and accurate manner or to coordinate their reported time of trade execution on inter-dealer transactions with members of the underwriting group. 

To address this concern, the proposed rule change would require the underwriter of a new issue to disseminate the “Time of First Execution,” which is the underwriter’s anticipated time for beginning trade executions in a new issue.  Once an underwriter has completed the submission of all required information to NIIDS, the information then will need to be re-disseminated to other dealers that may have trades in the issue and these dealers (and service bureaus) will need to “set up” automated trade processing systems with the new issue information.  To allow time for this process to occur, the underwriter would be required to provide a Time of First Execution that is at least two hours after the time that all required information is provided to NIIDS.

The proposed rule change would accommodate several situations that may occur in the underwriting of new issues of municipal securities.  For example, the underwriter would be allowed to submit an anticipated Time of Formal Award rather than wait for the actual Time of Formal Award if the underwriter and issuer have agreed in advance on a Time of Formal Award.  This may be the case if the formal award is a scheduled pro forma requirement by an issuer’s governing body and all details necessary for the formal award have been finalized and submitted to NIIDS in advance.  The underwriter could in this case complete its submission to NIIDS using the anticipated Time of Formal Award.  By doing this, the underwriter could schedule its Time of First Execution to occur immediately after the formal award, rather than waiting two hours.  Any changes to these times would require correction in NIIDS as soon as known.  As long as the two-hour notification period has been met once, however, it would not be necessary to start a new notification period as a result of minor adjustments to the Time of Formal Award or Time of First Execution.

Amendments to Rules G-8 and G-9

The proposed rule change includes amendments to the MSRB’s recordkeeping rules that would require an underwriter to retain for three years a record of the Time of Formal Award, a copy of the notification from DTCC indicating that a new issue received Trade Eligibility status in NIIDS and the Time of First Execution.  This would provide a record showing whether the underwriter provided information necessary for Trade Eligibility no later than two hours after the Time of Formal Award and whether the underwriter provided at least two hours advance notification of the Time of First Execution. 

Amendment to Rule G-14

NIIDS, in conjunction with MSRB rules, should make it possible for dealers to report new issue trades earlier and thus eliminate the need for the three-hour exception for when-issued trade reports.  Accordingly, an extension of the three-hour exception for when-issued transactions to June 30, 2008 will allow time for NIIDS to be implemented and will ensure that the three-hour exception is available up to the effective date of MSRB rules designed to improve new issue transaction reporting.

Questions about this notice may be directed to Justin R. Pica, Uniform Practice Policy Advisor, at 703-797-6716.

November 27, 2007

*                      *                      *

TEXT OF PROPOSED RULE CHANGES [14]

Rule G-14 Reports of Sales or Purchases

(a) – (b)  No change.

Rule G-14 RTRS Procedures

(a) General Procedures.

(i)  No change.

(ii) Transactions effected with a Time of Trade during the hours of the RTRS Business Day shall be reported within 15 minutes of Time of Trade to an RTRS Portal except in the following situations:

(A) – (B) No Change.

(C) A dealer shall report a trade within three hours of the Time of Trade if all the following conditions apply:  (1) the CUSIP number and indicative data of the issue traded are not in the securities master file used by the dealer to process trades for confirmations, clearance and settlement; (2) the dealer has not traded the issue in the previous year; and (3) the dealer is not a syndicate manager or syndicate member for the issue.  If fewer than three hours of the RTRS Business Day remain after the Time of Trade, the trade shall be reported no later than 15 minutes after the beginning of the next RTRS Business Day.  This provision (C) will cease to be effective on June 30, 2008 [December 31, 2007] for when, as and if issued transactions and December 29, 2006 for all other transactions.

(iii) – (vi) No change.

(b) – (d) No change.

*                      *                      *

Rule G-8:  Books and Records to be Made by Brokers, Dealers and Municipal Securities Dealers

(a)  Description of Books and Records Required to be Made.  Except as otherwise specifically indicated in this rule, every broker, dealer and municipal securities dealer shall make and keep current the following books and records, to the extent applicable to the business of such broker, dealer or municipal securities dealer:

(i) through (xxii)  No Change.

(xxiii)  Records Concerning Compliance with Rule G-34.  A broker, dealer or municipal securities dealer that acts as an underwriter in a primary offering of municipal securities subject to Rule G-34(a)(ii)(C)(1) shall maintain:

(A)  a record of the Time of Formal Award;

(B)  a record of the Time of First Execution; and

(C)  a record of the time the new issue received “Trade Eligibility” status in the new issue information dissemination system.

(b) – (e)  No change.

(f)  Compliance with Rules 17a-3. Brokers, dealers and municipal securities dealers other than bank dealers which are in compliance with rule 17a-3 of the Commission will be deemed to be in compliance with the requirements of this rule, provided that the information required by subparagraph (a)(iv)(D) of this rule as it relates to uncompleted transactions involving customers; paragraph (a)(viii); and paragraphs (a)(xi) through (a)(xxiii) [(xxii)] shall in any event be maintained.

(g)  No change.

*                      *                      *

Rule G-9:  Preservation of Records

(a) No change.

(b) Records to be Preserved for Three Years.  Every broker, dealer and municipal securities dealer shall preserve the following records for a period of not less that three years:

(i) through (xiv) No change.

(xv) the records to be maintained pursuant to rule G-8(a)(xxi); [and]

(xvi) the records to be maintained pursuant to rule G-8(a)(xxii); and [.]

(xvii) the records to be maintained pursuant to Rule G-8(a)(xxiii).

(c) – (g)  No change.

*                      *                      *

Rule G-34: CUSIP Numbers and New Issue Requirements

(a) New Issue Securities.

(i) Assignment of CUSIP Numbers.

(A) Except as otherwise provided in this section (a), each broker, dealer or municipal securities dealer who acquires, whether as principal or agent, a new issue of municipal securities from the issuer of such securities for the purpose of distributing such new issue (“underwriter”) and each broker, dealer or municipal securities dealer acting as a financial advisor in a competitive sale of a new issue (“financial advisor”) shall apply in writing to the Board or its designee for assignment of a CUSIP number or numbers to such new issue, as follows:

[(A) Except as otherwise provided in this section (a), each broker, dealer or municipal securities dealer who acquires, whether as principal or agent, a new issue of municipal securities from the issuer of such securities for the purpose of distributing such new issue (“underwriter”) shall apply in writing to the Board or its designee for assignment of a CUSIP number or numbers to such new issue. The underwriter shall make such application as promptly as possible, but in no event later than, in the case of negotiated sales, a time sufficient to ensure assignment of a CUSIP number or numbers prior to the time the contract to purchase the securities from the issuer is executed; or, in the case of competitive sales, the time of the first execution of a transaction in the new issue by the underwriter. A broker, dealer or municipal securities dealer acting as a financial advisor to an issuer in connection with a competitive sale of an issue shall ensure that application for a CUSIP number or numbers is made in sufficient time to permit assignment of CUSIP numbers prior to the time of award. In making an application for CUSIP number assignment, the following information shall be provided:]

(1)  The underwriter in a negotiated sale shall make an application by no later than the time that pricing information for the issue is finalized.  Such application for CUSIP number assignment shall be made at a time sufficient to ensure final CUSIP number assignment occurs prior to the formal award of the issue. 

(2) The underwriter in a competitive sale for which no CUSIP numbers have been pre-assigned shall make an application immediately after receiving notification of the award from the issuer.  The underwriter in a competitive sale shall ensure that CUSIP numbers are assigned prior to disseminating the Time of First Execution required under paragraph (a)(ii)(C) of this Rule G-34.

(3) A financial advisor shall make an application by no later than one business day after dissemination of a notice of sale.  Such application for CUSIP number assignment shall be made at a time sufficient to ensure final CUSIP numbers assignment occurs prior to the award of the issue.

(4) In making applications for CUSIP number assignment, the following information shall be provided:

(a) [(1)] through (h) [(8)] No change.

(5) Any changes to information identified in this paragraph (a)(i)(A) and included in an application for CUSIP number assignment shall be provided to the Board or its designee as soon as they are known but no later than a time sufficient to ensure final CUSIP number assignment occurs prior to disseminating the Time of First Execution required under paragraph (a)(ii)(C) of this Rule G-34.

(B) through (D) No Change.

(ii) Application for Depository Eligibility, CUSIP Number Affixture and Initial Communications.  Each underwriter shall carry out the following functions:

(A) through (B) No change.

(C) The underwriter of a new issue of municipal securities shall communicate information about the new issue in accordance with the requirements of this paragraph (a)(ii)(C) to ensure that other brokers, dealers and municipal securities dealers have timely access to information necessary to report, compare, confirm, and settle transactions in the new issue and to ensure that registered securities clearing agencies receive information necessary to provide comparison, clearance and depository services for the new issue; provided, however, that this paragraph (a)(ii)(C) shall not apply to short-term instruments under nine months in effective maturity, including variable rate instruments, auction rate products, and commercial paper.

[(C) The underwriter shall as promptly as possible announce each item of information listed below in a manner reasonably designed to reach market participants that may trade the new issue.  All information shall be announced no later than the time of the first execution of a transaction in the new issue by the underwriter.]

(1) The underwriter shall ensure that the following information is submitted to a new issue information dissemination system in the manner described in the written procedures for system users and that changes to submitted information are made as soon as possible:

[(1) the CUSIP number or numbers assigned to the issue and descriptive information sufficient to identify the CUSIP number corresponding to each part of the issue assigned a specific CUSIP number; and]

(a) the Time of Formal Award.  For purposes of this paragraph (a)(ii)(C), the “Time of Formal Award” means, for competitive issues, the later of the time the issuer announces the award or the time the issuer notifies the underwriter of the award, and, for negotiated issues, the later of the time the contract to purchase the securities from the issuer is executed or the time the issuer notifies the underwriter of its execution.  If the underwriter and issuer have agreed in advance on a Time of Formal Award, that time may be submitted to the new issue information dissemination system in advance of the actual Time of Formal Award. 

(b) the Time of First Execution.  For purposes of this paragraph (a)(ii)(C), the “Time of First Execution” means the time the underwriter plans to execute its first transactions in the new issue.  The underwriter shall designate a Time of First Execution that is no less than two hours after all information required by paragraph (a)(ii)(C) has been transmitted to the new issue information dissemination system.

(c) All other information identified as required for “Trade Eligibility” in the new issue information dissemination system.

(2) The underwriter shall ensure that all information identified in this paragraph (a)(ii)(C) is provided no later than two hours of the Time of Formal Award.  For purposes of this paragraph (a)(ii)(C), the hours counted in determining the responsibilities of an underwriter shall include only the hours of 9:00 A.M. and 5:00 P.M. Eastern Time on an RTRS Business Day as defined in Rule G-14 RTRS Procedures section (d)(ii).

[(2) the time of formal award.  For purposes of this subparagraph (a)(ii)(C), time of formal award shall mean, for competitive issues, the time the issuer announces the award, and, for negotiated issues, the time the contract to purchase the securities from the issuer is executed.]

(3)  The term “new issue information dissemination system” means an automated, electronic system operated by a securities clearing agency registered with the Securities and Exchange Commission providing depository services for municipal securities that receives comprehensive new issue information on a market-wide basis for the purposes of establishing depository eligibility and immediately re-disseminating such information to information vendors supplying formatted municipal securities information for use in automated trade processing systems.

(D)  The underwriter of a new issue of municipal securities of short-term instruments under nine months in effective maturity, including variable rate instruments, auction rate products, and commercial paper, shall as promptly as possible announce each item of information listed below in a manner reasonably designed to reach market participants that may trade the new issue.  All information shall be announced no later than the time of the first execution of a transaction in the new issue by the underwriter.

(1) the CUSIP number or numbers assigned to the issue and descriptive information sufficient to identify the CUSIP number corresponding to each part of the issue assigned a specific CUSIP number; and

(2) the Time of Formal Award as defined in subparagraph (a)(ii)(C)(1)(a). 

(E) [(D)] No change.

(iii) No change.

(b) – (c)  No change.


[1] File No. SR-MSRB-2007-07.  Comments on the proposed rule change should be submitted to the SEC and should reference this file number. 

[2] The MSRB previously requested comment on the changes to Rule G-34.  See “Request for Comment on Proposed Rule Changes to Improve Transaction Reporting of New Issue Municipal Securities,” MSRB Notice 2007-10 (March 5, 2007).

[3] File No. SR-MSRB-2007-08.  Comments on the proposed rule change should be submitted to the SEC and should reference this file number.

[4] Another exception is an end-of-day deadline for reporting trades in short-term instruments under nine months in effective maturity, including variable rate instruments, auction rate products, and commercial paper. 

[5] Many dealers use service bureaus for various trade processing functions, including the maintenance of securities master files.  Securities master file update procedures for service bureaus are the same as those described for dealers. 

[6] In the new issue market, information vendors seek to collect information on each issue and deliver it to customers in time for trade reporting in the new issue.  There are several challenges for vendors and dealers to meet the reporting deadlines.  For example, there are approximately 15,000 new municipal issues   that must be set up in databases each month.  Another problem for the industry is the fact that approximately 85 different information fields for each issue must be successfully gathered, which in large part depends on the timely cooperation of the underwriters. 

[7] RTRS only requires dealers to include limited information on trade reports in when-issued securities, such as the CUSIP number of the security traded, the par value of the transaction, and the transaction price expressed as either yield or dollar price.

[8] In addition to providing an improved mechanism for disseminating the new issue information necessary for trade processing, the system also would use the information for purposes of establishing depository eligibility for new issues.  DTCC plans to require use of the New Underwriting System (“NUWS”), of which NIIDS is a component, beginning in April 2008. 

[9] Rule G-34 defines “underwriter” very broadly to include a dealer acting as a placement agent as well as any dealer purchasing new issue securities from the issuer as principal.  If there is an underwriting syndicate, the lead manager is considered to be the “underwriter” for purposes of Rule G-34.

[10] Under existing provisions of Rule G-34, dealers frequently apply for CUSIP numbers before interest rates are determined.  In these cases, the dealer must provide the final interest rate information as soon as it becomes available.  The proposed rule change would clarify that a dealer must update any of the required information that changes after an initial application as soon as the new information becomes available.

[11] As noted above, in competitive sales where a dealer serves as financial advisor, Rule G-34 requires the dealer to apply for CUSIP numbers.  However, in competitive sales where there is no dealer financial advisor, there is no other dealer associated with the issue prior to the date of sale that can be charged under MSRB rules with the responsibility to make a pre-sale application for CUSIP numbers.

[12] Several industry vendors that provide “bookrunning” services to underwriters on new issues have indicated that they plan to offer a service to transmit information about a new issue to NIIDS on behalf of the underwriter.

[13] The MSRB notes that Trade Eligibility information on short term instruments with less than nine months in effective maturity would still be required to be submitted to DTCC in connection with an underwriter’s requirement to apply for depository eligibility under Rule G-34(a)(ii)(A), but would not be subject to the requirement to communicate such information not later than two hours after the Time of Formal Award. 

[14] New language is underlined; deletions are in brackets.