MSRB NOTICE 2011-55 (SEPTEMBER 15, 2011)


On May 16, 2011, changes to Municipal Securities Rulemaking Board’s (MSRB) Rule G-34(c), on variable rate security market information, became effective that, among other things, require brokers, dealers and municipal securities dealers (collectively “dealers”) to submit to the MSRB Short-term Obligation Rate Transparency (“SHORT”) System certain documents associated with municipal Auction Rate Securities (“ARS”) and Variable Rate Demand Obligations (“VRDOs”).[1]  The documents identified in Rule G-34(c) include ARS documents defining current auction procedures and interest rate setting mechanisms as well as VRDO liquidity facility documents related to Letter of Credit Agreements, Stand-by Bond Purchase Agreements and any other documents that establish an obligation to provide liquidity.  For documents in effect prior to May 16, 2011, dealers are required to submit such documents to the SHORT System no more than ninety business days after the effective date of the rule change (“transition period documents”).[2]

The MSRB reminds dealers that the deadline for submitting transition period documents to the SHORT System is September 22, 2011.  For VRDO transition period documents, dealers must undertake best efforts to obtain current versions of liquidity facility documents and, for documents that are unable to be obtained through best efforts, dealers are required to keep records of all efforts undertaken for a period of three years under Rule G-8, books and records.[3]  In the event that details of a liquidity provision for a VRDO issue are contained in multiple documents and a dealer only is able to obtain a portion of the documents, the dealer should submit to the SHORT System those documents it was able to obtain and retain in its records information showing the efforts undertaken to obtain a complete set of documents.  If a dealer is unable to obtain any of the liquidity facility documents for a VRDO issue on or before September 22, 2011, the dealer must submit to the SHORT System information that liquidity facility documents for that VRDO issue were not able to be obtained.


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 page 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.

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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 of Product Management - Market Transparency at 703-797-6716.

September 15, 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] On an ongoing basis, dealers are required to submit any new documents or amended versions of transition period documents created on or after May 16, 2011 within five business days of receipt.

[3] Such records of best efforts could include, for example, all written requests for documents to and any responses from a VRDO issuer or liquidity provider.