On Dec. 14, MSRB proposed rule change to promote timely settlement
MSRB submitted proposed rule change to amend MSRB Rule G-12 to promote the completion of allocations, confirmations, and affirmations by the end of trade date.
For municipal securities transactions between brokers, dealers, municipal securities dealers and institutional customers to facilitate move to settlement cycle of one day.
Follows Board approval to seek SEC approval of proposal to amend rule, see #180818.
Proposed Amendments
Amendments require dealers effecting municipal securities transactions subject to T+1 settlement cycle to either enter into written agreements as specified in rule change.
Or establish, maintain, enforce written policies and procedures designed to address objectives as soon as technologically practicable, no later than end of trade date.
Would align with the same-day allocation, confirmation, and affirmation process for equities and corporate bonds under SEA Rule 15c6-2, as adopted, see #128801.
MSRB believes that same-day process for municipal securities should be consistent.
Requested proposed rule change be approved with a compliance date of May 28, 2024.
Redline version of proposed rule amendments included as Exhibit 5 on pg. 42 of filing.
Consultation
Comments on the proposal are due 21 days from publication in the federal register.
Comments on the proposal are due 21 days from publication in the federal register.
Dec. 21, 2023 SEC Filing Notice
On Dec. 21, 2023, SEC published notice of filing of proposal to amend MSRB rule.
Dec. 28, 2023 Fed Reg Proposal
On Dec. 28, 2023, SEC published proposal in federal register, comment Jan. 18, 2024.
Jan. 2024 SIFMA Comment Letter
On Jan. 18, 2024, SIFMA issued letter in support of proposal on settlement process.
Practical guidance would be helpful; clarify treatment of securities traded after 4:30pm
Requested that the enforcement of MSRB Rule G-12(k) be delayed until Nov. 28, 2024.
Noted that B/Ds will need additional time to effectively comply with this new rule.
Significant analysis of relevant processes may be necessary to ensure compliance.
Feb. 8, 2024 SEC Approval
On Feb. 8, 2024, MSRB published Notice 2024-03 informing that the SEC issued order granting approval re same-day allocations, confirmations, affirmations on Feb. 7, 2024
Compliance date for new MSRB Rule G-12(k) is May 28, 2024, which is aligned with implementation for Exchange act Rule 15c6-2 and the transition to T+1 settlement.
Redline version of final rule amendments included in notice beginning on page 6.
Feb. 13, 2024 SEC Fed Reg Approval
On Feb. 13, 2024, SEC published Feb. 7 order granting approval in the federal register.
