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Comments on MSRB Notice 2010-10 (April 21, 2010)
1. BMO Capital Markets: Letter from Robert J. Stracks, Counsel, dated June 7, 2010
2. Citigroup Global Markets: Letter from Howard Marsh, Managing Director, Municipal Securities Division, dated June 14, 2010
3. Coastal Securities, Inc.: Letter from Chris Melton, Executive Vice President, dated August 3, 2010
4. J.J.B. Hilliard, W.L. Lyons, LLC: Letter from Ronald J. Dieckman, Director, Municipal Bonds, dated June 4, 2010
5. Regional Bond Dealers Association: Letter from Mike Nicholas, Chief Executive Officer, dated June 4, 2010
6. Riedl First Securities: Letter from Gerald D. Riedl, President/CEO, dated June 1, 2010
7. Roberts & Ryan Investments Inc.: E-mail from Daniel W. Roberts, President/CEO, dated April 21, 2010
8. RW Smith and Associates, Inc.: Letter from Paige W. Pierce, President and CEO, dated June 4, 2010
9. Securities Industry and Financial Markets Association: Letter from Leslie M. Norwood, Managing Director and Associate General Counsel, dated June 7, 2010
Previously Registered Entitites
Previously registered entitites. Thank you for your letter [name and date deleted] which has been referred to me for response. The letter relates to the Municipal Securities Rulemaking Board's rule A-12, which imposes an initial fee of $100 on municipal securities brokers and municipal securities dealers.
We note that the terms "municipal securities broker" and "municipal securities dealer" are not restricted under the Securities Acts Amendments of 1975 (the "1975 Amendments") to securities firms and banks effecting transactions exclusively in municipal securities. Many municipal securities brokers and municipal securities dealers (other than bank dealers) were registered with the Securities and Exchange Commission (the "Commission") as brokers or dealers prior to the 1975 Amendments. Municipal securities brokers and municipal securities dealers already registered with the Commission were not required to re-register with respect to their municipal securities activities, but nevertheless are subject to payment of the Board's initial fee. In addition, many municipal securities brokers and municipal securities dealers have been and are members of the national securities exchanges and the National Association of Securities Dealers, Inc.
We are unable to conclude from the information set forth in your letter that the initial fee imposed by the Board's rule A-12 is inapplicable to your firm. MSRB interpretation of June 16, 1976.
Interpretive Notice on Underwriting Assessment
The Municipal Securities Rulemaking Board (the “Board”) has received several requests for interpretation of rule A-13, which requires each municipal securities broker and municipal securities dealer to pay the Board a fee [on] … the face amount of municipal securities purchased from an issuer as part of a new issue. These requests concern the applicability of the fee to securities which have a stated maturity of [nine months or less], but are part of a new issue having a final stated maturity of [more than nine months]. Rule A-13 is intended to impose the … underwriting assessment on the face amount of all securities purchased from an issuer that are part of a new issue of municipal securities if any part of the issue has a final stated maturity of [nine months or less]… from the date of the securities. Thus, calculation of the fee should be based upon all municipal securities which are part of such new issue, including securities having a stated maturity of [nine months or less]. The assessment is not intended to apply, however, to short-term issues having a final maturity of [nine months or less].
NOTE: Revised to reflect subsequent amendments.
