SEC Approves Amendments to Rule G-40, on Email Contacts, and Form G-40
On July 29, 2005, the Securities and Exchange Commission (“SEC”) approved amendments to Rule G-40, on electronic mail contacts, and Form G-40 that: (i) eliminate the need for paper submission of original forms; (ii) require each broker, dealer and municipal securities dealer (collectively “dealers”) to maintain an Internet electronic mail account to permit communication with the MSRB; and (iii) require each dealer to review and, if necessary, update its Primary Contact information each calendar quarter. [1]
SUMMARY OF AMENDMENTS
Rule G-40 requires dealers to use Form G-40 to appoint a “Primary Contact” for purposes of electronic communication between the dealer and the MSRB. The Primary Contact must be either a Series 53-registered municipal securities principal or a Series 51-registered municipal fund securities limited principal. [2] Previously, dealers were required to submit their original Forms G-40 by mail, and any subsequent changes to the form could be made by mail or electronically through the dealer’s electronic G-40 account using the appropriate user ID and password.
The amendments to Rule G-40 now require that every dealer maintain an Internet e-mail account to permit communication with the MSRB, and that all Form G-40 submissions – initial forms and subsequent updates and amendments – be completed electronically using the appropriate user ID and password. [3] The information on Form G-40 includes the Primary Contact’s name, e-mail address and telephone number. In addition, dealers are now required to review and, if necessary, update information on their Primary Contact within 17 business days after the end of each calendar quarter.
Thus, by October 26, 2005, all dealers must review and, if necessary, update their Form G-40. The Qs & As following the text of the amendments are designed to assist dealers in complying with Rule G-40, including the new quarterly update requirement.
Questions regarding the amendments to Rule G-40 may be directed to Jill C. Finder, Assistant General Counsel, at 703-797-6600.
Procedural questions regarding Form G-40 (such as completing or submitting the Form, obtaining a password, etc.) may be directed to G-40 personnel at 703-797-6600.
TEXT OF AMENDMENTS [4]
Rule G-40. Electronic Mail Contacts.
(a)(i) Each broker, dealer or municipal securities dealer shall maintain an Internet electronic mail account to permit communication with the MSRB, and shall appoint a Primary Electronic Mail Contact to serve as the official contact person for purposes of electronic mail communication between the broker, dealer or municipal securities dealer and the MSRB. Each Primary Electronic Mail Contact shall be a registered municipal securities principal (Series 53 or Series 51) of the broker, dealer or municipal securities dealer.
(ii) Each broker, dealer or municipal securities dealer may appoint an Optional Electronic Mail Contact for purposes of electronic mail communication between the broker, dealer or municipal securities dealer and the MSRB.
(b)(i) Upon completion of its Rule A-12 submissions and assignment of an MSRB Registration Number, each broker, dealer or municipal securities dealer shall electronically submit to the MSRB [by mail] a completed Form G-40 setting forth, in the prescribed format, the following information:
(A) The name of the broker, dealer or municipal securities dealer, and the date.
(B) The MSRB Registration Number of the broker, dealer or municipal securities dealer.
(C) The name of the Primary Electronic Mail Contact, and his/her electronic mail address[,] and telephone number [and Individual Central Registration Depository (CRD) Number].
(D) The name of the Optional Electronic Mail Contact, if any, and his/her electronic mail address and telephone number.
(E) The name, title, [signature] and telephone number of the person who prepared the form.
(ii) A broker, dealer or municipal securities dealer may change the name of its Electronic Mail Contacts or other information previously provided by electronically submitting to the MSRB an amended Form G-40.
(c) Each broker, dealer or municipal securities dealer [shall] must review and, if necessary, update information on its Primary Electronic Mail Contact [periodically as requested and prescribed by the MSRB] and [shall] submit such information electronically to the MSRB within 17 business days after the end of each calendar quarter.
Any broker, dealer or municipal securities dealer that, during the 17 business-day update period, submits its initial Form G-40 or modifies or affirms information relating to its Primary Electronic Mail Contact shall be deemed to be in compliance with the quarterly update requirement applicable to the quarter immediately preceding that 17 business-day update period.
* * * * * *
FORM G-40: ELECTRONIC MAIL CONTACTS
MSRB Registration Number
_____________________________
Check one:
___ Original Form
___ Amended Form
Name of Dealer: _________________________________________________________
Date: __________________________________________________________________
The dealer named above designates (name) ____________________________________ as its Primary Electronic Mail Contact for purposes of electronic communications with the MSRB. This Primary Contact person is a Series 53-registered municipal securities principal or a Series 51-registered municipal fund securities limited principal with the dealer.
E-Mail Address of Primary Contact: __________________________________________
Phone Number of Primary Contact: ___________________________________________
[Individual CRD Number of Primary Contact (NASD member firms only): ______]
(Optional): The dealer named above designates (name) ___________________________
as its Optional Electronic Mail Contact.
E-mail Address of Optional Contact:__________________________________________
Phone Number of Optional Contact: __________________________________________
Name [and title] of person preparing this Form:__________________________________
[Signature: _____________________________________________________________]
Title:__________________________________________________________________
Telephone number: _______________________________________________________
[NEW FORMS MUST BE MAILED TO:
MSRB
ALL FORMS MUST BE SUBMITTED ELECTRONICALLY TO THE MSRB USING THE APPROPRIATE USER ID AND PASSWORD.
AMENDMENTS TO FORMS [MAY] MUST BE [AMENDED] MADE ELECTRONICALLY BY LOGGING ON TO THE MSRB’S WEB SITE (www.msrb.org) AND USING THE PRIMARY CONTACT’S USER ID AND PASSWORD TO CHANGE INFORMATION RELATING TO THAT PERSON, OR USING THE OPTIONAL CONTACT’S USER ID AND PASSWORD TO CHANGE INFORMATION RELATING TO THAT PERSON.
FOR ASSISTANCE, PLEASE CALL THE MSRB AT (703) 797-6600.
* * * * * *
RULE G-40: QUESTIONS-AND-ANSWERS
1.
Q: What items of information are required on Form G-40?
A: The following information is required on Form G-40:
• The name of the dealer.
• The date the form is prepared.
• The dealer’s MSRB Registration Number.
• The name of the Primary Contact and his/her e-mail addressand telephone number.
• The name of the Optional Contact, if any, and his/her e-mail address and telephone number.
• The name, title and telephone number of the person who prepared the form.
2.
Q: What happens if we inadvertently omit an item of information from our Form G-40?
A: The system will not accept a form that is incomplete; you will receive a “prompt” regarding what information is required to complete the form.
3.
Q: What happens if we inadvertently provide a bad e-mail address for the Primary Contact?
A: Dealers are responsible for ensuring that e-mail failures do not occur, and that MSRB e-mails are not recognized as “spam” by the dealer’s system. Such occurrences may result in non-compliance with Rule G-40, and any such dealer will be referred to NASD (or the appropriate bank regulator).
4.
Q: How often does a dealer need to review information on its Primary Contact?
A: Rule G-40 requires that every dealer review and, if necessary, update information on its Primary E-mail Contact and submit such information electronically to the MSRB within 17 business days after the end of each calendar quarter. However, dealers should update their Form G-40 whenever changes occur to the information previously submitted.
5.
Q: What steps do I actually follow to perform the quarterly review?
A: If changes to the Primary Contact’s information are necessary, follow these steps:
1. Log on from the MSRB web site at www.msrb.org.
2. Use the Primary Contact’s user ID and password to access your G-40 account.
3. Click on the “Update Account” button and enter any new or amended information in the appropriate fields.
4. Click on the "Submit Changes" button, review the information displayed on the next page and then click the "Confirm Changes" button to complete this process.
If no changes to the Primary Contact’s information are necessary, follow these steps:
1. Log on from the MSRB web site at www.msrb.org.
2. Use the Primary Contact’s user ID and password to access your G-40 account.
3. Click on the “Update Account” button.
4. Scroll down to the bottom of the page and check the box for “No changes are necessary at this time.”
5. Click on the "Submit Changes" button, review the information displayed on the next page and then click the "Confirm Changes" button to complete this process.
6.
Q: Can a dealer update its Form G-40 information in writing instead of online?
A: No. All Form G-40 submissions (i.e., initial forms and subsequent updates and amendments) must be submitted electronically using the appropriate user ID and password.
7.
Q: If my firm is about to register with the MSRB, how do I obtain a user ID and password for purposes of Rule G-40?
A: A dealer that is newly registering with the MSRB will receive a temporary user ID and password with its “welcome package.” The dealer will use that user ID and password to log-on to the G-40 site and electronically complete its initial Form G-40 registration. Upon such completion, the Primary Contact listed will be assigned a permanent user ID and password to access the firm’s online G-40 account. The temporary ID and password will become inactive after their first use or after 30 days, whichever occurs first.
8.
Q: If a dealer creates its initial G-40 account within the 17-day update period, is the dealer still required to perform the update requirement for that quarter?
A: Any dealer that, during the 17 business-day update period, submits its initial Form G-40 or modifies or affirms information previously submitted shall be deemed to be in compliance with the quarterly update requirement applicable to the quarter immediately preceding that 17 business-day update period.
9.
Q: My firm has been registered with the MSRB for some time. What do I do if I forget my user ID or password?
A: Contact the MSRB’s offices and the appropriate personnel will assist you.
10.
Q: Does the Primary Contact have to be a registered principal?
A: Yes. Rule G-40 requires that the Primary Contact be a Series 53-registered municipal securities principal or a Series 51-registered municipal fund securities limited principal with the firm. If a dealer has newly registered with the MSRB and does not yet have a registered principal, the dealer may designate a temporary Primary Contact but must designate a registered principal (either Series 51 or Series 53) as the Primary Contact within 90 days of registering with the MSRB. Failure to do so will result in that dealer being referred to NASD (or the appropriate bank regulator) for appropriate enforcement action.
11.
Q: What should a dealer do if its Primary Contact’s e-mail address changes?
A: The Primary Contact should promptly amend its firm’s Form G-40 by submitting such changes electronically. It is vital that this information remain current so that the dealer continues to receive important information from the MSRB.
12.
Q: What should a dealer do if the Primary Contact is no longer employed by the firm and the firm wants to designate a new Primary Contact?
A: If you do not have the Primary Contact’s user ID and password, contact the MSRB’s offices and the appropriate G-40 personnel will help you. However, if you know the Primary Contact’s user ID and password, then follow these steps:
• Log on from the MSRB web site at www.msrb.org.
• Use the Primary Contact’s user ID and password to access your firm’s G-40 account.
• Click on the “Change Primary Contact” button.
• You may either (i) create a new Primary Contact, or (ii) transfer G-40 access rights to an existing account within your firm (i.e., to someone who is responsible for your firm’s G-37 or RTRS submissions) by following the steps on the screen.
• To complete this process, be sure to click the “Submit Form” button.
13.
Q: How can other employees of a dealer receive MSRB notices?
A: A dealer’s Primary Contact must be either a Series 51 or Series 53 registered principal with the firm. The same dealer may also appoint an Optional Contact who does not have to be a registered principal or occupy any particular position within the firm. In addition, anyone may subscribe to the MSRB’s e-mail notification system by simply browsing to the MSRB’s web site at www.msrb.org, clicking on “Email Subscriptions” at the top of the page, and submitting this electronic form. This service is provided free of charge.
14.
Q: Who can I call if I need help with Rule G-40 or Form G-40?
A: Contact the MSRB’s offices at (703) 797-6600 and the appropriate personnel will assist you.
August 8, 2005
[1] Exchange Act Release No. 52162 (July 29, 2005).
[2] Dealers may also appoint an “Optional Contact” and this person does not have to be a registered principal.
[3] Dealers that currently have a G-40 account are not required to resubmit their initial Form G-40 electronically.
[4] Underlining indicates new language; brackets indicate deletions.
