[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