MSRB NOTICE 2010-61 (DECEMBER 29, 2010)

MSRB PUBLISHES SHORT SYSTEM TECHINCAL SPECIFICATIONS FOR SEC-APPROVED ADDITIONAL INCREASES IN TRANSPARENCY OF MUNICIPAL AUCTION RATE SECURITIES AND VARIABLE RATE DEMAND OBLIGATIONS

As previously announced, on August 20, 2010, the Securities and Exchange Commission (SEC) approved the Municipal Securities Rulemaking Board’s (MSRB) proposed changes to enhance the interest rate and descriptive information on municipal Auction Rate Securities (“ARS”) and Variable Rate Demand Obligations (“VRDOs”) currently collected from brokers, dealers and municipal securities dealers (collectively “dealers”) and made transparent by the MSRB.[1]  The changes include amendments to Rule G-34(c), on variable rate security market information, which will require dealers to make submissions to the MSRB Short-term Obligation Rate Transparency (“SHORT”) System of: (i) documents that define auction procedures and interest rate setting mechanisms for ARS and liquidity facilities for VRDOs; (ii) ARS bidding information; and (iii) additional VRDO information.  The effective date of the rule change will be no later than May 20, 2011 and the MSRB will announce the effective date at least ninety (90) days in advance.

Today, the MSRB is publishing specifications for making submissions to the SHORT System of the documents and information identified in the rule change using a computer-to-computer connection.  The specifications documents are available on the variable rate securities Market Disclosures and Data section of the MSRB web site.  The MSRB anticipates making a test environment available by the end of February 2011 for testing computer-to-computer connections.  The MSRB also is developing a web user interface for manual input of the documents and information identified in the rule change.  Notices will be published on www.msrb.org announcing the availability for testing computer-to-computer connections as well as the web user interface. 

SHORT SYSTEM SPECIFICATIONS

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Questions on this notice may be directed to Justin R. Pica, Director, Uniform Practice Policy, at (703) 797-6716. Other questions about the SHORT System should be directed to the Market Information Help Desk at (703) 797-6668.

December 29, 2010