Reminder of Upcoming Changes to MSRB Rules Relating to DTCC'S NIIDS System
The MSRB reminds dealers of upcoming important dates relating to MSRB rules to require underwriter participation with Depository Trust and Clearing Corporation’s (“DTCC”) New Issue Information Dissemination System (“NIIDS”).[1]
September 30, 2008: Effective Date of Changes to MSRB Rules G-8, G-9 and G-34
On September 30, 2008, amendments to MSRB Rule G-8, books and records, Rule G-9, preservation of records, and Rule G-34, CUSIP numbers and new issue requirements, become effective. These rule changes are designed to improve new issue trade reporting by accelerating the timing for CUSIP number assignment and, with the exception of new issues of short-term instruments with less than nine months in effective maturity, requiring underwriters[2] to: (i) submit certain information about a new issue of municipal securities to NIIDS within set timeframes; and (ii) set and disseminate a “Time of First Execution” that allows time for market participants to access necessary information in preparation for trade reporting prior to beginning trade executions in the issue.
A summary and the complete text of the amendments is available in MSRB Notice 2007-36 (November 27, 2007) at the MSRB web site (www.msrb.org).[3]
September 15, 2008: Deadline for Underwriters to Register and Test NIIDS
On June 25, 2008, an amendment to Rule G-34 became effective that would help ensure that dealers are prepared for the September 30, 2008 effective date of MSRB rules to require underwriters to participate in NIIDS, described above.[4] The “NIIDS Registration and Testing Requirements” require all dealers that have acted as underwriter in the last year on a new issue of municipal securities with nine months or greater effective maturity to register to use NIIDS with DTCC and successfully test NIIDS prior to September 15, 2008. On an ongoing basis, the NIIDS Registration and Testing Requirements require dealers to register to use NIIDS with DTCC and successfully test NIIDS prior to acting as underwriter on a new issue of municipal securities with nine months or greater effective maturity.
A summary and the complete text of the amendments is available in MSRB Notice 2008-23 (May 9, 2008) at the MSRB web site (www.msrb.org).
DTCC NIIDS registration and testing questions may be directed to:
Denise Russo
Director, Project Management
Depository Trust and Clearing Corporation
212-855-3731
drusso@dtcc.comDan Thieke
Vice President, Project Management
Depository Trust and Clearing Corporation
212-855-4162
dthieke@dtcc.com
* * *
Questions about this notice may be directed to Justin R. Pica, Uniform Practice Policy Advisor, at 703-797-6716.
September 8, 2008
[1] NIIDS is a component of a larger initiative at DTCC to implement an updated system for making new issues depository eligible (“UW SOURCE”). Changes to DTCC’s Rules and Procedures became effective September 2, 2008 that require underwriters to use NIIDS in connection with the filing of an application for depository eligibility in UW SOURCE for new issues of municipal securities. See, e.g. DTCC Important Notice 3793-08 at the DTCC web site (www.dtcc.com).
[2] Rule G-34 defines “underwriter” very broadly to include a dealer acting as a placement agent as well as any dealer purchasing new issue securities from the issuer as principal. If there is an underwriting syndicate, the lead manager is considered to be the “underwriter” for purposes of Rule G-34.
[3] The MSRB initially proposed an effective date of June 30, 2008 for the amendments. Prior to SEC approval of the amendments, the MSRB filed an amendment to change the effective date to September 30, 2008. See MSRB Notice 2008-20 (April 22, 2008).
[4] See SEC Approves Rule Changes to Require Underwriter Registration and testing with DTCC’s NIIDS System, MSRB Notice 2008-28 (June 27, 2008).
