Withdrawal of Market Emergencies Rule Filing

In December 2002, the MSRB filed with the SEC a proposed rule change to provide a formal mechanism for the MSRB to halt trading in municipal securities in the event of a market emergency disabling critical systems or infrastructure.[1]  SEC staff had requested the MSRB to undertake rulemaking in this area to ensure that market crises could be appropriately addressed in a pre-established manner that would be known to market participants in advance.

The SEC published the MSRB’s proposed rule change for comment in January 2003.[2]  This proposal has engendered a thoughtful and energetic debate within the fixed income markets on the issue of trading halts during market crises and a wide variety of views have been expressed.  The SEC has asked the MSRB to withdraw its proposed rule filing at this time, as the issue is further considered.  The MSRB has today acted upon this request by sending a letter of withdrawal to the SEC.

August 28, 2003

[1] File No. SR-MSRB-2002-14 (December 11, 2002).