Notice of Filing of Proposed Amendment to Rule G-8, on Books and Records, to Delete Requirement to Maintain Copies of Form G-40
On February 19, 2008, the Municipal Securities Rulemaking Board (“MSRB”) filed with the Securities and Exchange Commission (“SEC”) a proposed amendment to Rule G-8, on books and records, to delete the requirement that brokers, dealers and municipal securities dealers (“dealers”) maintain copies of Form G-40 and any amended forms as required by Rule G-40, on email contacts.[1] The MSRB has proposed that the amendment become effective on March 21, 2008.
Subparagraph (a)(xxii) under Rule G-8 requires that dealers keep records reflecting copies of Form G-40 and any amended forms required by Rule G-40. Rule G-40 provides for electronic communication between the MSRB and dealers by imposing certain requirements on dealers.[2] When the rule was first adopted in 2002, dealers were required to submit their initial forms by mail. The rule was subsequently amended in 2005 to require that all G-40 submissions – both initial forms and any subsequent amendments – be submitted electronically to the MSRB. Dealers accomplish this through their individual electronic G-40 accounts. Because dealers are no longer required to provide any paper submissions in connection with Rule G-40, there is no reason to retain the current requirement under Rule G-8(a)(xxii) that dealers maintain copies of Form G-40 and any amended forms.[3] Accordingly, the proposed rule change would delete this requirement.
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Questions concerning this notice should be directed to Jill C. Finder, Associate General Counsel.
February 20, 2008
TEXT OF AMENDMENTS [4]
Rule G-8: Books and Records to be Made by Brokers, Dealers and Municipal Securities Dealers.
(a) Description of Books and Records Required to be Made. Except as otherwise specifically indicated in this rule, every broker, dealer and municipal securities dealer shall make and keep current the following books and records, to the extent applicable to the business of such broker, dealer or municipal securities dealer:
(i) through (xxi) No change.
(xxii) Records Concerning Electronic Mail Contacts. Records reflecting copies of Form G-40 and any amended forms, as required by Rule G-40.
(b) through (g) No change.
[1] File Number SR-MSRB-2008-01. Comments on the proposal should be submitted to the SEC and should reference this file number.
[2] Dealers are required to use Form G-40 to appoint a “Primary Contact” who must be either a Series 53-registered municipal securities principal or a Series 51-registered municipal fund securities limited principal. The rule also requires each dealer to maintain an Internet email account, and to review and, if necessary, update its Primary Contact information within 17 business days of each calendar year. The rule is based on similar FINRA requirements; the MSRB attempts, whenever possible, to adopt rule provisions and language similar to FINRA rules in order to ensure a coordinated regulatory approach in areas of mutual regulation.
[3] In addition to certain quarterly reports provided to FINRA and the bank regulatory agencies, the MSRB provides FINRA examiners with secure, on-line access to each dealer’s current G-40 information to assist in inspecting for dealer compliance with Rule G-40.
[4] Strikethrough indicates deletion.
