MSRB Files Amendment to Previous Rule Proposal Consisting of New MSRB Rule G-45 and Amendments to Rules G-8 and G-9 Regarding College Savings Plans

MSRB filed with the SEC an amendment to the proposed rule filing that was submitted in June 10, 2013. The amendment revises and reinstates the original proposed rule change consisting of new Rule G-45 and subsequent new Form G-45, as well as Rule G-8 ("Books and Records to Be Made by Brokers, Dealers and Municipal Securities Dealers"), and Rule G-9 ("Preservation of Records").

The Amendment amends and restates the original proposed rule change to:

• clarify that the information which would need to be submitted by underwriters of 529 college savings plans ("529 plans" or "plans") under the proposed rule change includes asset allocation information for the assets of each investment option;
• omit statements concerning the interpretation of the meaning of "underwriter" under the federal securities laws and the rules promulgated thereunder;
• clarify that each entity must determine, based on the facts and circumstances, whether it is an underwriter under the federal securities laws;
• clarify that an underwriter that submits Form G-45 would be obligated to submit information only for itself and those entities that identify themselves as underwriters of the plan and that aggregate their information with the submitter's information;
• clarify that the MSRB proposes that underwriters identify the percentage of each underlying investment in an investment option but not submit information regarding the assets in each underlying investment;
• clarify that, for each investment option offered by a plan, the underwriter will provide the MSRB with the name and allocation percentage of each underlying investment in each investment option as of the end of the most recent semi-annual period;
• clarify that the MSRB does not contemplate that a state sponsor of a 529 plan, as an instrumentality of the state, would be an underwriter under federal securities laws;
• explain that an underwriter would not be required to submit information it neither possesses nor has the legal right to obtain. The legal right to obtain the information for purposes of the proposed rule change would not be affected, however, by a voluntary relinquishment, by contract or otherwise, of such a right;
• explain that, to the extent the information was prepared by the underwriter or, through delegation, one of its contractors or sub-contractors, and the information was inaccurate or incomplete, the underwriter would be responsible for the information and therefore be liable for such information under proposed Rule G-45. If, on the other hand, the underwriter did not prepare, or authorize others to prepare on its behalf, information submitted pursuant to proposed Rule G-45, it would not be required to verify or confirm the accuracy and completeness of the information; and
• clarify, in Rule G-45, that performance data shall be reported annually.

See: Text of Proposed Proposed Rule Change with Amendment. Related news:SIFMA Comments on MSRB Rules Requiring Underwriters to Submit 529 College Savings Plans Data (July 19, 2013).