MSRB NOTICE 2011-26 (MAY 16, 2011)

CHANGES TO MSRB RULES G-8 AND G-34 TO INCREASE TRANSPARENCY OF MUNICIPAL VARIABLE RATE SECURITIES EFFECTIVE MAY 16, 2011

The MSRB reminds brokers, dealers and municipal securities dealers (collectively “dealers”) of the May 16, 2011 effective date of changes to MSRB Rule G-8, on books and records, and MSRB Rule G-34(c), on variable rate security market information.  These changes increase information collected from dealers - and made transparent by the MSRB - on municipal Auction Rate Securities (“ARS”) and Variable Rate Demand Obligations (“VRDOs”) by expanding the information collected and publicly disseminated from the MSRB Short-term Obligation Rate Transparency (“SHORT”) System.  New information includes documents that define auction procedures and interest rate setting mechanisms for ARS and liquidity facilities for VRDOs, as well as ARS bidding information and additional VRDO information.[1]  Also on May 16, 2011, changes to the SHORT subscription service become effective that make the additional information and documents available on a subscription basis.[2]

SHORT EDUCATIONAL MATERIALS AND SYSTEM DOCUMENTATION

MSRB hosted several educational webinars describing the changes to Rule G-34(c) and demonstrating the process for making manual, web-based submissions to the SHORT System.  The presentation from these webinars can be found below and also is available on the Online Education section of the News, Events and Training section of the MSRB web site.

MSRB has published documents detailing instructions for manual, web-based submissions and technical specifications for computer-to-computer submissions to the SHORT System and these documents can be found below.  These documents also are available on the variable rate securities page of the Market Disclosures and Data section of the MSRB web site.[3]

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

May 16, 2011


[1] A complete description of the rule change can be found in MSRB Notice 2010-31 (August 26, 2010). On February 23, 2011 the MSRB published a notice addressing questions received on the portion of the rule change related to the submission of documents to the SHORT System. See MSRB Notice 2011-17 (February 23, 2011).

[2] A complete description of the changes to the SHORT subscription service can be found in MSRB Notice 2011-21 (April 11, 2011).

[3] The Market Disclosures and Data section of the MSRB web site also includes information on subscribing to the information and documents disseminated from the SHORT System.