[Federal Register Volume 65, Number 234 (Tuesday, December 5, 2000)]
[Notices]
[Pages 75990-75991]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30879]



[[Page 75990]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43635; File No. SR-NASD-00-68]


Self-Regulatory Organizations; The National Association of 
Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness 
of a Proposed Rule Change Relating to the Transfer Customer Account(s)

November 29, 2000.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\, notice is hereby given that, on November 20, 2000, the 
National Association of Securities Dealers, Inc. (``NASD'') through its 
wholly-owned subsidiary, NASD Regulation, Inc. (``NASD Regulation'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
items have been prepared primarily by NASD. The Commission is 
publishing this notice to solicit comments on the propose rule change 
from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change would allow the NASD to amend Rule 
11879(e) of the Uniform Practice Code to require that following the 
validation of a transfer instruction, the carrying member must complete 
the transfer of customer account(s) to the receiving member within 
three business days instead of four business days.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NASD included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. NASD has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements. \2\
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    \2\ The Commission has modified the text of the summaries 
prepared by the NASD.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Rule 11870(e) regulates the transfer of customer accounts from one 
member organization to another. Such transfers are generally effected 
through the Automated Customer Account Transfer (``ACAT'') Service, 
which is a system administered by the National Securities Clearing 
Corporation (``NSCC''). Since the inception of the ACAT Service in 
1985, numerous enhancements to the system have allowed for faster and 
more efficient transfers of customer accounts. The NSCC enhanced the 
ACAT Service in 1999 to require carrying members to complete the 
transfer of accounts to the receiving member within three business days 
following the validation of a transfer instruction. The NYSE has 
already amended its Rule 412 to reduce the total post-validation 
transfer period from four days to three days. \3\ The NASD currently 
expects its members to comply with the three-day requirement 
notwithstanding that Rule 11870(e) to conform to the NYSE Rule 
412(b)(3) requirement that post-validation transfer occur within three 
business days. This will make Rule 11870(e) consistent with the current 
NSCC and NYSE three-day requirement, which is the industry standard.
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    \3\ Securities Exchange Act Release No. 40712 (Nov. 25, 1998), 
63 FR 67163 (December 4, 1998).
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    NASD Regulation believes that the proposed rule change is 
consistent with the provisions of Section 15A(b)(6) of the Act, which 
requires, among other things, that the NASD's rules must be designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, and, in general, to protect 
investors and the public interest. The NASD believes that the proposed 
rule change is designed to accomplish these ends by reducing the time 
frame allowed for the transfer of customer accounts from one member 
organization to another and to make NASD requirements conform to NYSE 
Rule 412(b)(3) and current NSCC requirements.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    NASD Regulation does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule change and Timing 
for Commission Action

    The proposed rule change has been filed by NASD as a ``non-
controversial'' rule change under Rule 19b-4(f)(6) under the Act.\4\ In 
accordance with Rule 19b-4(f)(6)(iii), prior to the filing date, NASD 
Regulation submitted written notice of its intent to file the proposed 
rule change along with a brief description and text of the proposed 
rule change. In that notice of its intent, NASD Regulation requested 
that the Commission waive the requirement that the rule change, by its 
terms, not become operative for 30 days after the date of the filing, 
as consistent with the protection of investors and the public interest. 
The Commission has decided to waive that requirement. Accordingly, the 
proposed rule change will become effective upon filing pursuant to 
Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder. At any 
time within 60 days of this filing, the Commission may summarily 
abrogate this proposal if it appears to the Commission that such action 
is necessary or appropriate in the public interest, for the protection 
of investors, or otherwise in furtherance of the purposes of the act.
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    \4\ 17 CFR 240.19b-4(f)(6).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549-
0609. Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for inspection and copying the 
Commission's Public Reference Section, 450 Fifth Street, N.W., 
Washington, D.C. 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of NASD. All 
submissions should refer to File No. SR-NASD-00-68 and should be 
submitted by December 21, 2000.


[[Page 75991]]


    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-30879 Filed 12-4-00; 8:45 am]
BILLING CODE 8010-01-M