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20196 Federal Register / Vol. 70, No.

73 / Monday, April 18, 2005 / Notices

At any time within 60 days of the should submit only information that from the administrator of the registry no
filing of the proposed rule change, the you wish to make available publicly. All more than thirty-one (31) days prior to
Commission may summarily abrogate submissions should refer to File the date any call is made. This proposed
such rule change if it appears to the Number SR–MSRB–2005–05 and should amendment is consistent with recent
Commission that such action is be submitted on or before May 9, 2005. amendments to the comparable do-not-
necessary or appropriate in the public For the Commission, by the Division of call rules of the Federal Trade
interest, for the protection of investors, Market Regulation, pursuant to delegated Commission (‘‘FTC’’) and the Federal
or otherwise in furtherance of the authority.16 Communications Commission (‘‘FCC’’).
purposes of the Act.15 Jill M.Peterson, The proposed rule change will become
IV. Solicitation of Comments Assistant Secretary. effective on May 1, 2005. The text of the
[FR Doc. 05–7650 Filed 4–15–05; 8:45 am] proposed rule change is available on the
Interested persons are invited to MSRB’s Web site (http://www.msrb.org),
BILLING CODE 8010–01–U
submit written data, views, and at the MSRB’s principal office, and at
arguments concerning the foregoing, the Commission’s Public Reference
including whether the proposed rule Room.
SECURITIES AND EXCHANGE
change is consistent with the Act.
COMMISSION II. Self-Regulatory Organization’s
Comments may be submitted by any of
the following methods: [Release No. 34–51533; File No. SR–MSRB– Statement of the Purpose of, and
2005–06] Statutory Basis for, the Proposed Rule
Electronic Comments Change
• Use the Commission’s Internet Self-Regulatory Organizations;
comment form (http://www.sec.gov/ Municipal Securities Rulemaking In its filing with the Commission, the
rules/sro.shtml); or Board; Notice of Filing and Immediate MSRB included statements concerning
• Send an e-mail to rule- Effectiveness of Proposed Rule the purpose of and basis for the
comments@sec.gov. Please include File Change Relating to Frequency of proposed rule change and discussed any
Number SR–MSRB–2005–05 on the Updates from the National Do-Not-Call comments it received on the proposed
subject line. Registry Pursuant to Rule G–39 rule change. The text of these statements
may be examined at the places specified
Paper Comments April 12, 2005. in Item IV below. The MSRB has
• Send paper comments in triplicate Pursuant to Section 19(b)(1) of the prepared summaries, set forth in
to Jonathan G. Katz, Secretary, Securities Exchange Act of 1934 Sections A, B, and C below, of the most
Securities and Exchange Commission, (‘‘Act’’),1 and Rule 19b–4 thereunder,2 significant aspects of such statements.
450 Fifth Street, NW., Washington, DC notice is hereby given that on March 23,
2005, the Municipal Securities A. Self-Regulatory Organization’s
20549–0609.
Rulemaking Board (‘‘MSRB’’ or Statement of the Purpose of, and
All submissions should refer to File Statutory Basis for, the Proposed Rule
Number SR–MSRB–2005–05. This file ‘‘Board’’), filed with the Securities and
Exchange Commission (‘‘Commission’’ Change
number should be included on the
subject line if e-mail is used. To help the or ‘‘SEC’’) the proposed rule change as 1. Purpose
Commission process and review your described in Items I and II below, which
Items have been prepared by the MSRB. In 2003, the FTC, via its
comments more efficiently, please use Telemarketing Sales Rule, and the FCC,
only one method. The Commission will The MSRB has filed the proposal as a
‘‘non-controversial’’ rule change via its Miscellaneous Rules Relating to
post all comments on the Commission’s
pursuant to Section 19(b)(3)(A)(iii) of Common Carriers, established
Internet Web site (http://www.sec.gov/
the Act,3 and Rule 19b–4(f)(6) requirements for sellers and
rules/sro.shtml). Copies of the
thereunder,4 which renders the proposal telemarketers to participate in a national
submission, all subsequent
effective upon filing with the do-not-call registry.5 Since June 2003,
amendments, all written statements
Commission. The Commission is consumers have been able to enter their
with respect to the proposed rule
publishing this notice to solicit home telephone numbers into the
change that are filed with the
comments on the proposed rule change national do-not-call registry, which is
Commission, and all written
from interested persons. maintained by the FTC. Under rules of
communications relating to the
the FTC and FCC, sellers and
proposed rule change between the I. Self-Regulatory Organization’s telemarketers generally are prohibited
Commission and any person, other than Statement of the Terms of Substance of from making telephone solicitations to
those that may be withheld from the the Proposed Rule Change consumers whose numbers are listed in
public in accordance with the
The MSRB is filing with the the national do-not-call registry. The
provisions of 5 U.S.C. 552, will be
Commission a proposed rule change FCC’s do-not-call rules apply to brokers,
available for inspection and copying in
amending Rule G–39, on telemarketing, dealers and municipal securities dealers
the Commission’s Public Reference
to require a broker, dealer or municipal while the FTC’s rules do not.6
Room. Copies of such filing also will be
available for inspection and copying at securities dealer that seeks to qualify for
5 The do-not-call rules of the FCC and FTC are
the principal office of the MSRB. All the safe harbor set forth in Rule G–39 to,
very similar in terms of substance, in part, because
comments received will be posted among other things, use a process to Congress directed the FCC to consult with the FTC
without change; the Commission does prevent telephone solicitations to any to maximize consistency between their respective
not edit personal identifying telephone number in a version of the do-not-call rules. See The Do-Not-Call
national do-not-call registry obtained Implementation Act, 108 P.L. 10, 117 Stat. 557
information from submissions. You (Mar. 11, 2003).
6 See 15 U.S.C. § 6102(d)(2)(A), which provides
16 17 CFR 200.30–3(a)(12).
15 See section 19(b)(3)(C) of the Act, 15 U.S.C. that ‘‘The rules promulgated by the Federal Trade
1 15 U.S.C. 78s(b)(1).
78s(b)(3)(C). For purposes of calculating the 60-day Commission under subsection (a) shall not apply to
2 17 CFR 240.19b–4.
abrogation period, the Commission considers the * * *[among other persons, brokers or dealers]
3 15 U.S.C. 78s(b)(3)(A)(iii).
period to commence on April 1, 2005, the date that * * *’’ The FTC’s do-not-call rules were
the MSRB filed Amendment No. 1. 4 17 CFR 240.19b–4(f)(6). promulgated under 15 U.S.C. § 6102. The FCC’s

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Federal Register / Vol. 70, No. 73 / Monday, April 18, 2005 / Notices 20197

In July 2003, the SEC requested that securities dealer may not contact. to the recent amendments to the FTC’s
the MSRB amend its telemarketing rules Fourth, the broker, dealer or municipal do-not-call rules.
to require brokers, dealers and securities dealer must use a process to The MSRB’s proposed rule change
municipal securities dealers to prevent telephone solicitations to any would take effect on May 1, 2005.
participate in the national do-not-call telephone number on any list Accordingly, under the proposed rule
registry.7 Because brokers, dealers and established pursuant to the do-not-call change, effective May 1, 2005, a broker,
municipal securities dealers are subject rules, employing a version of the dealer or municipal securities dealer
to the FCC’s do-not-call rules, the MSRB national do-not-call registry obtained seeking to qualify for the safe harbor in
modeled its rules in this area after those from the FTC no more than three Rule G–39 would be required to use a
of the FCC and codified these do-not- months prior to the date any call is process to prevent telephone
call requirements in Rule G–39, with made, and must maintain records solicitations to any telephone number in
minor modifications tailoring the rules documenting this process. a version of the national do-not-call
to broker, dealer and municipal registry obtained from the administrator
Shortly after the MSRB’s rules were
securities dealer activities and the of the registry (i.e., the FTC) no more
approved, Congress instructed the FTC
securities industry. The SEC approved than thirty-one days prior to the date
to amend it telemarketing rules to
these rules in January 2004.8 any call is made.
require use of a national do-not-call
Safe Harbor Provision for the National registry no more than thirty-one days 2.Statutory Basis
Do-Not-Call Registry Requirements old.9 Accordingly, in March 2004, the The MSRB believes that the proposed
The FCC and FTC each provided FTC amended its Telemarketing Sales rule change is consistent with Section
persons subject to their respective do- Rule to require sellers and telemarketers 15B(b)(2)(C) of the Act,11 which
not-call rules a ‘‘safe harbor’’ providing seeking to qualify for the FTC’s do-not- provides that MSRB rules shall:
that a seller or telemarketer is not liable call safe harbor to use a version of the
Be designed to prevent fraudulent and
for a violation of the do-not-call rules national do-not-call registry obtained manipulative acts and practices, to promote
that is the result of an error if the seller from the FTC no more than thirty-one just and equitable principles of trade, to
or telemarketer’s routine business days prior to the date any call is made. foster cooperation and coordination with
practice meets certain specified In August 2004, the FCC adopted a persons engaged in regulating, clearing,
standards. The MSRB has provided a conforming amendment to its settling, processing information with respect
Miscellaneous Rules Relating to to, and facilitating transactions in municipal
parallel safe harbor in paragraph (c) of
Common Carriers, requiring that securities, to remove impediments to and
Rule G–39; this safe harbor is limited to perfect the mechanism of a free and open
a violation of subparagraph (a)(iii) of persons who seek to qualify for a similar
market in municipal securities, and, in
Rule G–39, which prohibits initiating safe harbor provided in the rule use a general, to protect investors and the public
any telephone solicitation to any person version of the national do-not-call interest * * *
who has registered his or her telephone registry obtained from the administrator
of the national do-not-call registry (i.e., The MSRB believes that the proposed
number with the national do-not-call rule change will increase the protection
registry. the FTC) no more than thirty-one days
prior to the date any call is made.10 The of investors by enabling investors who
Today, to be eligible for this Rule G– do not want to receive telephone
39 safe harbor, a broker, dealer or FTC and FCC rule amendments took
solicitations to receive the benefits and
municipal securities dealer or person effect on January 1, 2005.
protections of the national do-not-call
associated with a broker, dealer or The MSRB is proposing to amend registry sooner.
municipal securities dealer must Rule G-39 to conform to this change in
demonstrate that the broker, dealer or the rules of the FTC and FCC. The B.Self-Regulatory Organization’s
municipal securities dealer’s routine MSRB believes that this change is Statement on Burden on Competition
business practice meets four standards. necessary to maintain the consistency The MSRB does not believe that the
First, the broker, dealer or municipal between the telemarketing rules of the proposed rule change will result in any
securities dealer must have established MSRB and the FTC and FCC burden on competition not necessary or
and implemented written procedures to (particularly given that the FCC’s rules appropriate in furtherance of the
comply with the national do-not-call already directly apply to broker- purposes of the Act since it would apply
rules. Second, the broker, dealer or dealers), and that investors generally equally to all dealers.
municipal securities dealer must have expect the MSRB’s telemarketing
trained its personnel, and any entity C.Self-Regulatory Organization’s
standards to be comparable to those of
assisting it in its compliance, in Statement on Comments on the
the FTC and FCC. Additionally, under
procedures established pursuant to the Proposed Rule Change Received From
the Telemarketing and Consumer Fraud
national do-not-call rules. Third, the Members, Participants or Others
and Abuse Prevention Act of 1994, the
broker, dealer, or municipal securities SEC has requested that the MSRB Written comments were neither
dealer must have maintained and amend its do-not-call rules to conform solicited nor received.
recorded a list of telephone numbers
that the broker, dealer or municipal III. Date of Effectiveness of the
9 69FR 16368 (Mar. 29, 2004). The FTC indicated Proposed Rule Change and Timing for
that it was directed to amend its rules by Congress
rules are not subject to this limitation and apply to in the Consolidated Appropriations Act of 2004,
Commission Action
all sellers and telemarketers. Pub. L. 108-199, 188 Stat 3 (requirement in Division Because the proposed rule change: (i)
7 The Telemarketing and Consumer Fraud and B, Title V).
Abuse Prevention Act of 1994 (codified at 15 U.S.C. 10 69 FR 60311 (Oct. 8, 2004); CG Docket No. 02–
Does not significantly affect the
§ 6102) requires the SEC to promulgate 278, FCC 04–204 (adopted Aug. 25, 2004; released protection of investors or the public
telemarketing rules substantially similar to those of Sept. 21, 2004). The FCC indicated that while interest; (ii) does not impose any
the FTC or to direct self-regulatory organizations to Congress did not direct the FCC to amend its do- significant burden on competition; and
promulgate such rules unless the SEC determines not-call rule, it determined to do so, in part,
that such rules are not in the interest of investor
(iii) does not become operative for 30
because it is required to consult and coordinate
protection. with the FTC with respect to, and maximize the days from March 23, 2005, the date on
8 Exchange Act Release No. 49127 (January 26, consistency of, their respective do-not-call rules. 69
2004); 69 FR 4548 (January 30, 2004). FR 60313. 11 15 U.S.C. 78o–4(b)(2)(C).

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20198 Federal Register / Vol. 70, No. 73 / Monday, April 18, 2005 / Notices

which it was filed, and the MSRB available for inspection and copying in II. Self-Regulatory Organization’s
provided the Commission with written the Commission’s Public Reference Statement of the Purpose of, and
notice of its intent to file the proposed Room. Copies of such filing also will be Statutory Basis for, the Proposed Rule
rule change at least five business days available for inspection and copying at Change
prior to the filing date, the proposed the principal office of the MSRB. All In its filing with the Commission,
rule change has become effective comments received will be posted OCC included statements concerning
pursuant to Section 19(b)(3)(A) of the without change; the Commission does the purpose of and basis for the
Act 12 and Rule 19b–4(f)(6) not edit personal identifying proposed rule change and discussed any
thereunder.13 information from submissions. You comments it received on the proposed
At any time within 60 days of the should submit only information that rule change. The text of these statements
filing of the proposed rule change, the you wish to make available publicly. All may be examined at the places specified
Commission may summarily abrogate submissions should refer to File in Item IV below. OCC has prepared
such rule change if it appears to the Number SR–MSRB–2005–06 and should summaries, set forth in sections (A), (B),
Commission that such action is be submitted on or before May 9, 2005. and (C) below, of the most significant
necessary or appropriate in the public For the Commission, by the Division of aspects of such statements.2
interest, for the protection of investors, Market Regulation, pursuant to delegated
or otherwise in furtherance of the authority.15
A. Self-Regulatory Organization’s
purposes of the Act.14 Statement of the Purpose of, and
Jill M. Peterson,
Statutory Basis for, the Proposed Rule
IV. Solicitation of Comments Assistant Secretary. Change
[FR Doc. E5–1804 Filed 4–15–05; 8:45 am]
Interested persons are invited to The purpose of this proposed rule
BILLING CODE 8010–01–P
submit written data, views, and change is to add IP .01 to OCC Rule 307.
arguments concerning the foregoing, Rule 307 requires a clearing member to
including whether the proposed rule SECURITIES AND EXCHANGE compute its ‘‘net capital,’’ ‘‘aggregate
change is consistent with the Act. COMMISSION indebtedness,’’ and ‘‘debt-equity total’’
Comments may be submitted by any of in accordance with Commission Rule
the following methods: [Release No. 34–51521; File No. SR–OCC– 15c3–1 under the Act for purposes of
2004–17] OCC Rules.3 The proposed rule change
Electronic Comments
would require clearing members that
• Use the Commission’s Internet Self-Regulatory Organizations; The could otherwise take advantage of
comment form (http://www.sec.gov/ Options Clearing Corporation; Notice Commission Rule 15c3–1(a)(6) to deduct
rules/sro.shtml); or of Filing of a Proposed Rule Change the risk-based haircuts associated with
• Send an e-mail to rule- Relating to Calculating Net Capital proprietary securities positions in
comments@sec.gov. Please include File Under OCC Rule 307 determining their compliance with
Number SR–MSRB–2005–06 on the April 11, 2005.
OCC’s minimum net capital
subject line. requirements.4 Although the exemption
Pursuant to Section 19(b)(1) of the
in Rule 15c3–1(a)(6) from the securities
Paper Comments Securities Exchange Act of 1934
haircuts in Rule 15c3–1(c)(2)(vi) and
• Send paper comments in triplicate (‘‘Act’’),1 notice is hereby given that on
Appendix A under Rule 15c3–1 ensures
to Jonathan G. Katz, Secretary, September 27, 2004, The Options from a systemic standpoint that capital
Securities and Exchange Commission, Clearing Corporation (‘‘OCC’’) filed with exists to support open positions, it does
450 Fifth Street, NW., Washington, DC the Securities and Exchange not ensure that capital is maintained in
20549–0609. Commission (‘‘Commission’’) the the entity to which OCC has credit
All submissions should refer to File proposed rule change as described in exposure. As a result, OCC is exposed
Number SR–MSRB–2005–06. This file Items I, II, and III below, which items to the volatility of the positions relative
number should be included on the have been prepared primarily by OCC. to the clearing member’s net income
subject line if e-mail is used. To help the The Commission is publishing this without any reserve against net capital.
Commission process and review your notice to solicit comments on the OCC believes that the exemption in Rule
comments more efficiently, please use proposed rule change from interested
only one method. The Commission will persons. 2 The Commission has modified parts of these

post all comments on the Commission’s I. Self-Regulatory Organization’s statements.


3 OCC Rule 307 provides that a clearing member
Internet Web site (http://www.sec.gov/ Statement of the Terms of Substance of that is registered as a futures commission merchant
rules/sro.shtml). Copies of the the Proposed Rule Change and is not otherwise required to calculate net
submission, all subsequent capital in accordance with Rule 15c3–1 may instead
The proposed rule change would calculate net capital as required under the rules of
amendments, all written statements
amend OCC Rule 307 by adopting the Commodity Futures Trading Commission.
with respect to the proposed rule
Interpretation and Policy .01 (‘‘IP .01’’) 4 Rule 15c3–1 requires that every broker or dealer
change that are filed with the maintain net capital no less than the minimum net
thereunder that would require clearing
Commission, and all written capital as set forth by the rule. Paragraph (c) of the
members that could otherwise take
communications relating to the rule defines net capital as the net worth of a broker
advantage of Commission Rule 15c3– or dealer, adjusted by among other things, securities
proposed rule change between the
1(a)(6) under the Act to include the risk- haircuts that are set forth in paragraph (c)(vi) and
Commission and any person, other than appendix A of the rule. Paragraph (a)(6) allows
based haircuts associated with
those that may be withheld from the market makers, specialists, and certain other dealers
proprietary securities positions in
public in accordance with the to elect to apply paragraph (a)(6)(iii) in lieu of
determining their compliance with paragraph (c)(vi) or Appendix A under Rule 15c3–
provisions of 5 U.S.C. 552, will be
OCC’s minimum net capital 1. In general, paragraph (a)(6)(iii) requires that a
requirements. dealer maintain a liquidating equity with respect to
12 15 U.S.C. 78s(b)(3)(A).
securities positions in his market maker or
13 17 CFR 240.19b–4(f)(6). specialist account at least equal to 25 percent of the
14 See 15 17 CFR 200.30-3(a)(12).
Section 19(b)(3)(C) of the Act, 15 U.S.C. market value of the long positions and 30 percent
78s(b)(3)(C). 1 15 U.S.C. 78s(b)(1). of the market value of the short positions.

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