SEC Approves Establishment of Subscription Service to Information Collected by the SHORT System

On September 24, 2010, the Securities and Exchange Commission (“SEC”) approved the Municipal Securities Rulemaking Board’s (“MSRB”) proposed rule change[1] to establish a subscription to the information collected by the MSRB’s Short-term Obligation Rate Transparency (“SHORT”) System.[2]

The SHORT System is a facility of the MSRB for the collection and dissemination of information about securities bearing interest at short-term rates. Currently, these securities consist of Auction Rate Securities (“ARS”) and Variable Rate Demand Obligations (“VRDOs”). The rule change establishes a data stream subscription, called the Short-term Obligation Subscription Service (SHORT subscription service), to the information collected by the SHORT System. The rule change is effective September 30, 2010. The subscription is provided through a web service for an annual fee of $10,000. Information about the Short-term Obligation Subscription Service is available on the Short-term Obligation Subscription Service section of the MSRB website.

Information disseminated from the SHORT System also is posted to the MSRB’s Electronic Municipal Market Access (“EMMA”) web portal pursuant to the EMMA short-term obligation rate transparency service. Such information will be made available to subscribers simultaneously with the availability of such information to the EMMA web portal. The subscription service will make the information collected by the SHORT System available to market participants for re-dissemination and for use in creating value-added products and services. Such re-dissemination and third-party use would provide market participants, including investors and the general public, additional avenues for obtaining the information collected by the SHORT System and would make additional tools available for making well-informed investment decisions.

Data elements with respect to the Short-term Obligation Subscription Service that will be provided through the data stream are set forth in the Short-term Obligation Subscription Service Manual posted on the MSRB website. The Short-term Obligation Subscription Service Manual provides a complete, up-to-date listing of all data elements made available through the SHORT subscription service, including any additions, deletions or modifications to disseminated data elements, detailed definitions of each data element, specific data format information, and information about technical data elements to support transmission and data-integrity processes between the SHORT System and subscribers.

Subscriptions will be provided through computer-to-computer data streams utilizing XML files for data. Appropriate schemas and other technical specifications for accessing the web services through which the data stream will be provided is set forth in the Short-term Obligation Subscription Service Manual posted on the MSRB website.

The MSRB will make the Short-term Obligation Subscription Service available on an equal and non-discriminatory basis. Subscribers will be subject to all of the terms of the subscription agreement to be entered into between the MSRB and each subscriber, including proprietary rights of third parties in information provided by such third parties that is made available through the subscription. The MSRB will not be responsible for the content of the information submitted by submitters that is distributed to subscribers of the Short-term Obligation Subscription Service.

Questions about this notice may be directed to Justin R. Pica, Director, Uniform Practice Policy, at 703-797-6716.

September 28, 2010

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TEXT OF THE RULE CHANGE: [3]

MUNICIPAL SECURITIES RULEMAKING BOARD
SHORT-TERM OBLIGATION RATE TRANSPARENCY SUBSCRIPTION SERVICE

The Short-term Obligation Rate Transparency (“SHORT”) System is a facility of the Municipal Securities Rulemaking Board (“MSRB”) for the collection and dissemination of information about securities bearing interest at short-term rates, which include Auction Rate Securities (“ARS”) and Variable Rate Demand Obligations (“VRDOs”). The SHORT subscription service, which is available for an annual fee of $10,000, makes available to subscribers a data stream of all information collected by the SHORT System. Information submitted to the SHORT System also is posted to the MSRB’s Electronic Municipal Market Access (EMMA) web portal pursuant to the EMMA short-term obligation rate transparency service. Such information will be made available to subscribers simultaneously with the availability of such information to the EMMA web portal. Submitters of information to the SHORT System may provide or modify such items for a particular submission in one or more sessions and any such items provided or modified will be made available to subscribers simultaneously with the availability of such items to the EMMA web portal.

Data elements with respect to the SHORT subscription service to be provided through the data stream shall be set forth in the SHORT System Subscriber Manual posted on the MSRB website. Each submission to the SHORT System will result in an XML data packet to be included in the subscription feed containing, to the extent applicable for each submission, some of the following data elements:

Data Element	Definition
Sequence Number	An incremental system generated number assigned to each reported transaction.
Transaction Type	Dealer-supplied transaction type to indicate that a submission is a new report, modification or cancellation.
Publication Date and Time	Date and time a submission was published.
Dealer Names	The identity of the ARS Program Dealer(s) or VRDO Remarketing Agent.
Control Number	Unique identifier used to tie transactions together in the case of a modification or cancellation.
CUSIP9	CUSIP Number for the security.
Instrument Type	Indication of whether the security is an ARS or a VRDO.
Interest Rate Reset Date and Time	ARS - Date and time that the ARS auction occurred. VRDOs - Date and time that the VRDO interest rate was determined.
Interest Rate Period	Number of calendar days that the interest rate is applicable.
Interest Rate Posting Date and Time	ARS (only) – Date and time that the ARS auction results were communicated to ARS Program Dealers.
Interest Rate	Interest rate, in percent.
Minimum Denomination	Minimum allowable transaction size, in par amount.
Rate Type	ARS - Indication of whether the interest rate submitted represents a maximum rate (M), all hold rate (H), or an interest rate set by the auction process (A). VRDOs - Indication of whether the interest rate submitted represents a maximum rate, a rate that was set by a formula, or a rate that was set by the VRDO Remarketing Agent.
Par Amount Auctioned	ARS (only) - Par amount auctioned not including hold orders effective at any interest rate. The par amount auctioned is commonly referred to in results of an auction communicated to Program Dealers by Auction Agents as the “accepted sells” or the “executed sells.”
Minimum Rate	ARS - Minimum interest rate, in percent, applicable at the time of the auction or if such minimum interest rate is not able to be calculated, an indication that such rate is not calculable. VRDOs - Minimum interest rate, in percent, applicable at the time of the interest rate reset or if such minimum interest rate is not able to be calculated, an indication that such rate is not calculable.
Maximum Rate	ARS - Maximum interest rate, in percent, applicable at the time of the auction or if such maximum interest rate is not able to be calculated, an indication that such rate is not calculable. VRDOs - Maximum interest rate, in percent, applicable at the time of the interest rate reset or if such maximum interest rate is not able to be calculated, an indication that such rate is not calculable.
Par Amount Remarketed	VRDOs (only) - Par amount of the VRDO held by a party other than the VRDO Remarketing Agent. (This data element is reserved for future use.)
Notification Period	VRDOs (only) - Number of calendar days that may lapse between a holder of a VRDO tendering a position in the security and a liquidity provider purchasing the tendered security in the event that the Remarketing Agent is unable to remarket the tendered security.
Liquidity Facility Type	VRDOs (only) - For each liquidity facility applicable to a VRDO, an indication of whether it is a standby bond purchase agreement or letter of credit.
Liquidity Facility Expiration Date	VRDOs (only) - The expiration date of each liquidity facility applicable to a VRDO.

The SHORT System Subscriber Manual provides a complete, up-to-date listing of all data elements made available through the SHORT subscription service, including any additions, deletions or modifications to disseminated data elements, detailed definitions of each data element, specific data format information, and information about technical data elements to support transmission and data-integrity processes between the SHORT System and subscribers.

Subscriptions will be provided through computer-to-computer data streams utilizing XML files for data. Appropriate schemas and other technical specifications for accessing the web services through which the data stream will be provided are set forth in the SHORT System Subscriber Manual posted on the MSRB website.

The MSRB makes the SHORT subscription service available on an equal and non-discriminatory basis. Subscribers shall be subject to all of the terms of the subscription agreement to be entered into between the MSRB and each subscriber, including proprietary rights of third parties in information provided by such third parties that is made available through the subscription. The MSRB is not responsible for the content of the information submitted by submitters that is distributed to subscribers of the SHORT subscription service.

[1] The proposed rule change was first filed with the SEC on August 10, 2010, and an amendment to correct a typographical error was filed on September 16, 2010. See MSRB Notice 2010-25.

[2] See Securities Exchange Act Release No. 34-62993, September 24, 2010 (File No. SR-MSRB-2010-06).

[3] Underlining indicates additions.