[Federal Register Volume 59, Number 208 (Friday, October 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26764]
[Federal Register: October 28, 1994]
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POSTAL RATE COMMISSION
[Release No. 34-34879; File No. SR-NSCC-94-13]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Order Approving a Proposed Rule Change Modifying the
Automated Customer Account Transfer Service
October 21, 1994.
On July 20, 1994, the National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change (File No. SR-NSCC-94-13)
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'').\1\ Notice of the proposal was published on August 25, 1994,
in the Federal Register to solicit comments on the proposed rule
change.\2\ No comment letters were received. For the reasons discussed
below, the Commission is approving the proposed rule change.
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\1\15 U.S.C. 78s(b)(1) (1988).
\2\Securities Exchange Act Release No. 34550 (August 18, 1994),
59 FR 43876.
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I. Description
NSCC is modifying its Automated Customer Account Transfer Service
(``ACATS'') to accelerate the time in which customer cash or margin
accounts are transferred. NSCC's rule change is made in conjunction
with the New York Stock Exchange's (``NYSE'') recently approved rule
change amending NYSE Rule 412\3\ and the National Association of
Securities Dealers' (``NASD'') recently filed proposal to amend Section
65 of the NASD's Uniform Practice Code,\4\ both of which set forth
guidelines for their members' transfers of customer accounts.
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\3\For a complete description of the NYSE rule change, refer to
Securities Exchange Act Release No. 34633 (September 2, 1994), 59 FR
46872 [File No. SR-NYSE-94-21] (order approving proposed rule change
relating to NYSE's customer account transfers).
\4\For a complete description of the NYSE proposed rule change,
refer to File No. SR-NASD-94-56.
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NSCC is amending its Rule 50, Section 9 to allow an NSCC member to
whom a customer's securities account is being transferred (``receiving
member'') one business day after receipt of the customer account asset
data report from NSCC to determine whether to accept the account, to
reject the account, or to request that the NSCC member who currently
maintains the account (``delivering member'') make adjustments to the
account. Currently, receiving members have two business days to respond
after receiving the customer account asset data report. Where Mutual
Fund Services eligible book share mutual fund assets are to be
transferred, a receiving member again will have one business day
instead of two business days after receipt of the customer account
asset data report to submit detailed transfer instructions to NSCC.
During the one day review period, a delivering member is able to add,
to delete, or to change an item in the securities account being
transferred. Each business day that the delivering member causes an
adjustment to be made to an account will give the receiving member one
additional business day after each adjustment to accept, to reject, or
to request adjustments or in the case of mutual funds to submit
transfer instructions. Currently, receiving member have two business
days after each adjustment. Additionally, the proposed rule change
deletes language that treats account transfers containing option
positions differently from transfers of accounts without option
positions.
II. Discussion
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder and particularly with the requirements of Section
17A(b)(3)(F).\5\ Section 17A(b)(3)(F) requires that the rules of a
clearing agency be designed to promote the prompt and accurate
clearance and settlement of securities transactions, and to foster
cooperation and coordination with persons engaged in the clearance and
settlement of securities transactions. The Commission believes that
NSCC's rule change shortening the time period for transferring accounts
should result in benefits to both customers and members by increasing
efficiency in the transfer of accounts. NSCC's proposed rule change is
made in conjunction with the NYSE's and the NASD's rule changes
governing their members' transfers of customer accounts; therefore, the
Commission believes the proposal fosters cooperation and coordination
with persons engaged in clearance and settlement of securities
transactions. In addition, reducing the time for account transfers is
consistent with Commission Rule 15c6-1 mandating a three business day
settlement cycle effective June 1, 1995.\6\
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\5\15 U.S.C. 78q-1(b)(3)(F) (1988).
\6\For a complete description of Rule 15c6-1, refer to
Securities Exchange Act Release No. 33023 (October 6, 1993), 58 FR
52891 [File No. S7-5-93] (adopting Rule 15c6-1).
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III. Conclusion
On the basis of the foregoing, the Commission finds that the
proposal is consistent with the requirements of the Act, particularly
with Section 17A(b)(3)(F) of the Act, and the rules and regulations
thereunder.
It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-NSCC-94-13) be, and hereby
is, approved.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\17 CFR 200.30-3(a)(12) (1994).
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Jonathan G. Katz,
Secretary.
[FR Doc. 94-26764 Filed 10-27-94; 8:45 am]
BILLING CODE 8010-01-M