[Federal Register Volume 63, Number 233 (Friday, December 4, 1998)]
[Notices]
[Pages 67163-67164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32330]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40712; File No. SR-NYSE-98-30]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change Relating to Customer 
Account Transfer Contracts

November 25, 1998.

I. Introduction

    On September 28, 1998, the New York Stock Exchange, Inc. (``NYSE'' 
or ``Exchange'') submitted to the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change relating to customer account 
transfer contracts.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The proposed rule change was published for comment in the Federal 
Register on October 27, 1998.\3\ One comment in support of the proposed 
rule change was received. This order approves the proposal.
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    \3\ Securities Exchange Act Release No. 40571 (October 19, 
1998), 63 FR 57347 (File No. SR-NYSE-98-30).
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II. Description of the Proposal

    NYSE proposes to amend Exchange Rule 412, which regulates the 
transfer of customer accounts from one member organization to another, 
and the rule's stated interpretation. Transfers of customer accounts 
are generally effected through the Automated Account Transfer Service 
(``ACATS'') which is administered by the National Securities

[[Page 67164]]

Clearing Corporation (``NSCC''). The ACATS system is currently being 
redesigned to allow for quicker and more efficient transfers of 
customer accounts. The purpose of the proposed rule change is to amend 
Rule 412 to reflect these upgrades.
    Currently, the ACATS system and Exchange Rule 412 provide for a 
seven day cycle to transfer a customer account. The proposed amendments 
would reduce this cycle to six days by streamlining the asset review 
portion of the transfer period from two days to one day. It is 
anticipated that ACATS system changes will become operational on 
January 25, 1999. Therefore, the Exchange represents that the proposed 
rule change will become effective in accordance with the effective date 
of the ACATS system changes.
    In addition, the Exchange proposes to amend an interpretation to 
Exchange Rule 412 to eliminate one of the enumerated reasons for which 
a member organization may reject or take exception to an account 
transfer request. The Proposed amendment deletes the ``Account Type 
Mismatch'' reject code, due to its limited usefulness arising from 
inconsistencies among member organizations in defining account types.

III. Discussion

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange 
and, in particular, with the requirements of Section 6(b).\4\ 
Specifically, the Commission believes the proposal is consistent with 
the Section 6(b)(5) \5\ requirements that the rules of an exchange be 
designed to promote just and equitable principles of trade, to remove 
impediments to and to perfect the mechanism of a free and open market 
and a national market system and, in general, to protect investors and 
the public interest.\6\ The proposed amendment does this by reducing 
the time allowed for transferring customer accounts.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ In approving this rule, the Commission has considered the 
proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-NYSE-98-30) is approved.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-32330 Filed 12-3-98; 8:45 am]
BILLING CODE 8010-01-M