Text of Proposed Rule Changes, Form G-36(OS) & Form G-36(ARD)
TEXT OF PROPOSED RULE CHANGES, FORM G-36(OS) & FORM G-36(ARD)
DRAFT
Rule G-23. Activities of Financial Advisors (Language between *asterisks* is proposed new language: language between brackets is proposed deleted language)
(a) - (b) No change.
(c) *Written Agreement.* Basis of Compensation. Each financial advisory relationship shall be evidenced by a *written agreement* writing entered into prior to, upon or promptly after the inception of the financial advisory relationship (or promptly after the creation or selection of the issuer if the issuer does not exist or has not been determined at the time the relationship commences). Such *written agreement* writing shall set forth the basis of compensation for the financial advisory services to be rendered, including provisions relating to the deposit of funds with or the utilization of fiduciary or agency services offered by such broker, dealer or municipal securities dealer or by a person controlling, controlled by, or under common control with such broker, dealer or municipal securities dealer in connection with the rendering of such financial advisory services *shall include the following:*
*(i) a description of the services expected to be rendered by the broker, dealer or municipal securities dealer as financial advisor and the basis of compensation for such services;*
*(ii) whether the financial advisor is acting as a principal in a transaction with the issuer associated with such financial advisory services;*
*(iii) whether the financial advisor has received or has an understanding to receive payment(s)from any person in connection with the issue of municipal securities on which it is advising and the source, basis and estimated amount of any such payment; provided, however, that any payment received by the financial advisor acting as a principal in a transaction with the issuer associated with such financial advisory services shall not be required to be disclosed;and*
*(iv) an undertaking by the financial advisor to advise the issuer promptly in writing of any change to the information provided pursuant to this section (c) during the term of its financial advisory contract;*
*provided, however, that the disclosures required in subsections (ii) and (iii) of this section may be made in a separate written statement to the issuer.*
(d) No change.
(e) *Remarketing Activities. No broker, dealer, or municipal securities dealer that has a financial advisory relationship with an issuer with respect to a new issue of municipal securities shall act as agent for the issuer in remarketing such issue, unless*
*(i) the financial advisory relationship with respect to such issue has been terminated in writing and at or after such termination the issuer has expressly consented in writing to such participation as remarketing agent;*
*(ii) the broker, dealer or municipal securities dealer has expressly disclosed in writing to the issuer at or before such termination that there may be a conflict of interest in changing from the capacity of financial advisor to remarketing agent for the securities with respect to which the financial advisory relationship exists and the issuer has expressly acknowledged in writing to the broker, dealer, or municipal securities dealer receipt of such disclosure; and *
*(iii) the broker, dealer or municipal securities dealer has expressly disclosed in writing to the issuer at or before such termination the source and anticipated amount of all remuneration to the broker, dealer, or municipal securities dealer with respect to such issue in addition to the compensation referred to in section (c) of this rule, and the issuer has expressly acknowledged in writing to the broker, dealer, or municipal securities dealer receipt of such disclosure.*
(e) *(f)*
(f) *(g)* Each broker, dealer and municipal securities dealer subject to the provisions of sections (d) *,* or (e) *or (f)* of this rule shall maintain a copy of the written disclosures, acknowledgments and consents required by these sections in a separate file and in accordance with the provisions of rule G-9.
(g) *(h)*
(h) *(i)*
*(j) The term "payment" shall have the same meaning as in rule G-37 (g) (viii).*
Rule G-32. Disclosure in Connection with New Issues
(a) Disclosure Requirements *to Customers*. No change.
(b) No change.
(c)*Disclosure Requirements to Issuers.* *Prior to the delivery of municipal securities by an issuer to a broker, dealer or municipal securities dealer acting as underwriter in a negotiated primary offering of such municipal securities, each broker, dealer or municipal securities dealer shall disclose to the issuer, in writing:*
*(i) whether the broker, dealer or municipal securities dealer is acting as a principal in a transaction with the issuer associated with the underwriting of the municipal securities;*
*(ii)whether the broker, dealer or municipal securities dealer has received or has an understanding to receive payment(s) from any person in connection with the issue of the municipal securities it is underwriting and the source, basis and estimated amount of any such payment; provided, however, that any payments received by the broker, dealer or municipal securities dealer acting as a principal in a transaction with the issuer associated with such underwriting and any payments received by syndicate members or others from the underwriting spread shall not be required to be disclosed; and*
*(iii) whether the broker, dealer or municipal securities dealer has made payments or has an understanding to make payments to any person in connection with the issue of municipal securities it is underwriting; provided, however, that payments made to syndicate members or others from the underwriting spread shall not be required to be disclosed.*
(c) *(d)* Definition*s* of New Issue Municipal Securities and Official Statement. For purposes of this rule, the following terms have the following meanings:
(i) - (iii) No change.
*(iv) The term "payment" shall have the same meaning as in rule G-37(g)(viii).*
*(v) The term "primary offering" shall mean an offering defined in Securities Exchange Act Rule 15c2-12 (f) (7).*
Rule G-11. Sales of New Issue Municipal Securities During the Underwriting Period
(a) - (e) No change.
(f) Communications Relating to *Issuer Syndicate Requirements,* Priority Provisions and Order Period. Prior to the first offer of any securities by a syndicate, the senior syndicate manager shall furnish in writing to the other members of the syndicate (i) *a written statement of all terms and conditions required by the issuer, (ii)* the priority provisions, *(iii)* (ii) the procedure, if any, by which such priority provisions may be changed, *(iv)* (iii) if the senior syndicate manager or managers are to be permitted on a case-by-case basis to allocate securities in a manner other than in accordance with the priority provisions, the fact that they are to be permitted to do so, and *(v)* (iv) if there is to be an order period, whether orders may be confirmed prior to the end of the order period. Any changes in the priority provisions shall be promptly furnished in writing by the senior syndicate manager to the other members of the syndicate. Syndicate members shall promptly furnish in writing the information described in this section to others, upon request. *If the senior syndicate manager, rather than the issuer, prepares the written statement of all terms and conditions required by the issuer, such statement shall be provided to the issuer.*
(g) Disclosure of *Designations and* Allocation*s* of Securities. The senior syndicate manager shall*:* , *(i) within 24 hours of the sending of the commitment wire, complete the allocation of the securities: (ii)* within two business days following the date of sale, disclose to the other members of the syndicate, in writing, a summary, by priority category, of all allocations of securities which are accorded priority over members' take-down orders, indicating the aggregate par value, maturity date and price of each maturity so allocated, including any allocation to an order confirmed at a price other than the original list price. The summary shall include allocations of securities to orders submitted through the end of the order period or, if the syndicate does not have an order period, through the first business day following the date of sale*;* . *(iii) within five business days following the date of sale, disclose to the members of the syndicate, in writing, the amount of any designations received by each member; and (iv) within 10 business days following the date of sale, disclose to the members of the syndicate, in writing, the amount of any portion of the take-down directed to each member by the issuer.*
(h) Disclosure of Syndicate Expenses and Other Information. At or before the final settlement of a syndicate account, the senior manager shall furnish to the other members of the syndicate:
*(i) a summary statement, by maturity, of all securities allocated to each member of the syndicate;*
*(ii)* (i) No change.
*(iii)* (ii) No change.
Rule G-12. Uniform Practice.
(a) - (i) No change.
(j) Settlement of Syndicate or Similar Account. Final settlement of a syndicate or similar account formed for the purchase of securities shall be made within *30 calendar days* 60 days following the date *the issuer delivers the securities to the syndicate* all securities have been delivered by the syndicate or account manager to the syndicate or account members.
(k) Any credit designated by a customer in connection with the purchase of securities as due to a member of a syndicate or similar account shall be distributed to such member by the municipal securities broker *, dealer* or municipal securities dealer handling such order within 30 *calendar* business days following *the date the issuer delivers the securities to the syndicate* delivery of the securities to the customer.
(l) No change.
Rule G-8. Books and Records to be Made By Brokers, Dealers and Municipal Securities Dealers Rule G-8. (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) - (vii) No change.
(viii) Records of Syndicate Transactions. With respect to each syndicate or similar account formed for the purchase of municipal securities, records shall be maintained by a managing underwriter designated by the syndicate or account to maintain the books and records of the syndicate or account, showing the description and aggregate par value of the securities, the name and percentage of participation of each member of the syndicate or account, the terms and conditions governing the formation and operation of the syndicate or account *(including a separate statement of all terms and conditions required by the issuer)* all orders received for the purchase of the securities from the syndicate or account (except bids at other than syndicate price), all allotments of securities and the price at which sold, the date and amount of any good faith deposit made to the issuer, the date of settlement with the issuer, the date of closing of the account, and a reconciliation of profits and expenses of the account.
(ix) - (xiv) No change.
(xv) Records Concerning Delivery of Official Statements, Advance Refunding Documents and Forms G-36(OS) and G-36(ARD) to the Board or its Designee. A broker, dealer or municipal securities dealer that acts as an underwriter in a primary offering of municipal securities subject to rule G-36 (or, in the event a syndicate or similar account has been formed for the purpose of underwriting the issue, the managing underwriter) shall maintain*:*
*(A)* a record of : the name, par amount and CUSIP number or numbers for all such primary offerings of municipal securities*;* and the dates that the documents and written information referred to in rule G-36 are received from the issuer and are sent to the Board or its designee*; the date of delivery of the issue to the underwrites;* and, for issues subject to Securities Exchange Act Rule 15c2-12 the date of the final agreement to purchase, offer or sell the municipal securities*; and*
*(B) copies of the Forms G-36(OS) and G-36(ARD) and documents submitted to the Board or its designee along with the certified or registered mail receipt or other record of sending such forms and documents to the Board or its designee.*
(xvi) - (xix) No change.
(b) - (f) No change.
MUNICIPAL SECURITIES RULEMAKING BOARD
(DO NOT STAPLE THIS FORM)
FORM G-36(OS) - FOR OFFICIAL STATEMENTS
1. NAME OF ISSUER(S) : (1)____________________________________ (2)________________________________________________________
2. DESCRIPTION OF ISSUE(S) : (1)______________________________ (2)________________________________________________________
3. STATE(S) : ________________________________________________
4. DATED DATE(S) : (1)________________________________________ (2)________________________________________________________
5. DATE OF FINAL MATURITY OF OFFERING:________________________
6. *DATE OF FINAL AGREEMENT TO PURCHASE, OFFER OR SELL THE MUNICIPAL SECURITIES (date of sale) :_____________________*
*7. DATE OFFICIAL STATEMENT WAS RECEIVED:_____________________*
*8. EXPECTED DATE OF DELIVERY OF SECURITIES TO UNDERWRITER(S): _____________________________________________________*
7.*9.* PAR VALUE OF OFFERING: $_______________________________
8*10.* PAR AMOUNT UNDERWRITTEN(if there is no underwriting syndicate): $ ______________________________________________
9*11.* IS THIS AN AMENDED OR STICKERED OFFICIAL STATEMENT ? Yes ________ No ________
*12. DOES THIS ISSUE ADVANCE REFUND ANOTHER ISSUE ? Yes ________ No ________*
10.*13.* CHECK ALL THAT APPLY:
a.______ At the option of the holder thereof, all securities in this offering may be tendered to the issuer of such securities or its designated agent for redemption or purchase at par value or more at least as frequently as every nine months until maturity, earlier redemption, or purchase by the issuer or its designated agent.
b.______ At the option of the holder thereof, all securities in this offering may be tendered to the issuer of such securities or its designated agent for redemption or purchase at par value or more at least as frequently as every two years until maturity, earlier redemption, or purchase by the issuer or its designated agent.
c.______ This offering is exempt from SEC rule 15c2-12 under section (d) (l) (i) of that rule. Section (d) (l) (i) of SEC rule 15c2-12 states that an offering is exempt from the requirements of the rule if the securities offered have authorized denominations of $100,000 or more and are sold to no more than 35 persons each of whom the participating underwriter believes: (1) has the knowledge and expertise necessary to evaluate the merits and risks of the investment: and (2) is not purchasing for more than one account, or with a view toward distributing the securities.
11.*14.* MANAGING UNDERWRITER: _______________________________
12.*15.* NAME:________________________________________________ (Must be an employee of officer of the underwriter named on line *14.*) PHONE:_______________________________________________
13.*16.*The undersigned hereby states that the above-described document is a final official statement relating to a primary offering of municipal securities and acknowledges that the document will be publicly disseminated.
Signed:_________________________________
14.*17.* NAME:________________________________________________ (Name of signer on line *16.* Need not be repeated if same as on line *15.*) PHONE:_______________________________________________
15. *18.* ORGANIZATION:_______________________________________ (Organization of signer on line *16.* Need not be repeated if same as on line *14.*)
*19. DATE SENT TO THE BOARD:___________________________________*
CONTINUED ON OTHER SIDE
The information provided on this form will be used by the Board to compute any rule A-13 underwriting assessment that may be due on this offering. The managing underwriter listed on line *14* will be sent an invoice if a rule A-13 assessment is due on the offering.
16.*20.*MATURITY DATE CUSIP NUMBER MATURITY DATE CUSIP NUMBER
_______________________ ____________ _____________ ____________
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17.*21.* MSRB rule G-34 requires that CUSIP numbers be assigned to each new issue of municipal securities unless the issue is ineligible for CUSIP number assignment under the eligibility criteria of the CUSIP Service Bureau.
_______ Check here if the issue is ineligible for CUSIP number assignment. State the reason why the issue is ineligible for CUSIP number assignment:____________________________________________________________________________________________
18.*22.*Submit two copies of the completed form along with two copies of the official statement to MSRB, MSIL System, 1640 King Street, Suite 300, Alexandria, VA 22314. Incomplete submissions will be returned for corrections.
________________________________________________________________________________________________________________________________
MUNICIPAL SECURITIES RULEMAKING BOARD
(DO NOT STAPLE THIS FORM)
FORM G-36 - FOR ADVANCE REFUNDING DOCUMENTS
1. DESCRIPTION: ESCROW AGREEMENT ________________________________________________
2. DATE OF ESCROW AGREEMENT:__________________________________
3. NUMBER OF ISSUES REFUNDED:_________________________________ (Fill out one form for each issue)
4. REFUNDED ISSUE - The issue is (check one): partially *refunded* ______ entirely refunded ______
*A.*5. NAME OF ISSUER:_____________________________________________________________________________________________
*B.*6. DESCRIPTION OF ISSUE:________________________________________________________________________________________
*C.*7. DATED DATE:_______________________________________
*5.*8.REFUNDING ISSUE(S) - Submission is not required if there is no refunding issue or the refunding issue is a current refunding (i.e., the issue(s) refunded *will* mature(s) *or be redeemed* in 90 days or less from the date of issuance of the refunding issue).
*A.*9. NAME OF ISSUER(S): (1)________________________________________________________(2)________________________________________________________
*B.*10.DESCRIPTION OF ISSUE(S): (1)________________________________________________________(2)________________________________________________________
*C.*11. DATED DATE(S): (1)_______________________________ (2)________________________________________________________
*D.DATE OF DELIVERY OF REFUNDING ISSUE(S)TO UNDERWRITER(S):
(1)________________________________________________________ (2)_______________________________________________________*
*6. DATE ADVANCE REFUNDING DOCUMENT WAS RECEIVED:
(1)________________________________________________________ (2)_______________________________________________________*
*7.*12. MANAGING UNDERWRITER:____________________________
*8.*13. NAME:____________________________________________
PHONE:___________________________________________
*9.*14. PREPARED BY:_____________________________________ (If same as on line *8,* this line may be left blank)
PHONE:___________________________________________
*10.*15.ORGANIZATION:____________________________________ (If same as on line *7,* this line may be left blank)
*11. DATE SENT TO THE BOARD:______________________________*
CONTINUED ON OTHER SIDE
*12.*16. ORIGINAL INFORMATION FOR REFUNDED (OUTSTANDING) ISSUE
MATURITY DATE CUSIP NUMBER MATURITY DATE CUSIP NUMBER
_____________ ____________ _____________ ____________
_____________ ____________ _____________ ____________
_____________ ____________ _____________ ____________
_____________ ____________ _____________ ____________
_____________ ____________ _____________ ____________
_____________ ____________ _____________ ____________
*13.*17. NEW INFORMATION FOR REFUNDED (OUTSTANDING) ISSUE (partially refunded)
MATURITY DATE NEW CUSIP NUMBER MATURITY DATE NEW CUSIP NUMBER
_____________ ________________ _____________ ________________
_____________ ________________ _____________ ________________
_____________ ________________ _____________ ________________
_____________ ________________ _____________ ________________
_____________ ________________ _____________ ________________
_____________ ________________ _____________ ________________
*14.*18. INFORMATION FOR REFUNDING (NEW) ISSUE
MATURITY DATE CUSIP NUMBER MATURITY DATE CUSIP NUMBER
_____________ ____________ _____________ ____________
_____________ ____________ _____________ ____________
_____________ ____________ _____________ ____________
_____________ ____________ _____________ ____________
_____________ ____________ _____________ ____________
_____________ ____________ _____________ ____________
*15.*19. Submit two completed copies of the form(s), along with two copies of the escrow agreement or its equivalent to MSRB, MSIL System, 1640 King Street, Suite 300, Alexandria, VA 22314. Incomplete forms will be returned for correction.
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