Document ID: SEC-2009-0150-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Securities Clearing Corp
Posted Date: 2009-02-02T05:00Z

[Federal Register: February 2, 2009 (Volume 74, Number 20)]
[Notices]               
[Page 5879-5880]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02fe09-88]                         

[[Page 5879]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59302; File No. SR-NSCC-2008-12]

 
Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Allow the Transfer and Reregistration of Fund/SERV 
Eligible Fund Positions to and From a Financial Intermediary and a 
Mutual Fund Company

January 27, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 23, 2008, the 
National Securities Clearing Corporation (``NSCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change described in Items I, II, and III below, which items have been 
prepared primarily by NSCC. NSCC filed the proposal pursuant to Section 
19(b)(3)(A)(iii) of the Act \2\ and Rule 19b-4(f)(4) \3\ thereunder so 
that the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the rule 
change from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \3\ 17 CFR 240.19b-4(f)(4).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of the rule change is to allow for transfer and 
reregistration of Fund/SERV Eligible Fund positions to and from a 
financial intermediary and a mutual fund company.

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

    In its filing with the Commission, NSCC 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. NSCC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements.\4\
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    \4\ The Commission has modified the text of the summaries 
prepared by NSCC.
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 (A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Currently NSCC's rules permit the transfer of Fund/SERV eligible 
shares from one member to another member through NSCC's Automated 
Customer Account Transfer Service (``ACATS'') or from one fund member 
to another fund member through the Transfer of Retirement Assets 
(``ToRA'') service. In an effort to further standardize and automate 
the account transfer and reregistration process between members and 
mutual fund companies, NSCC is proposing to accommodate the transfer of 
customer mutual fund share registration: (i) Held by a customer 
directly at a mutual fund company to be reregistered in the name of a 
financial intermediary and (ii) held by a financial intermediary to be 
reregistered as a direct customer position at the mutual fund company. 
A member can request the transfer of registration in the capacity of 
the party receiving the reregistration or in the capacity of the party 
transferring the registration. The contra-side NSCC fund member must 
accept the reregistration request in order for NSCC to process it.
    NSCC is also proposing that, unless the parties agree otherwise, 
the member and fund member will comply with certain legal 
responsibilities associated with the reregistration. The member will 
agree that in initiating the request it has obtained the requisite 
authorization from the account holder and that it will provide a copy 
of it to the fund member upon request. The member also will indemnify 
the fund member for any liabilities incurred in or associated with the 
request other than those relating to the negligence or misconduct of 
the fund member. In connection with reregistrations of IRA and other 
tax-deferred accounts, a member that makes the transfer request in its 
capacity as a successor custodian agrees that it is so qualified under 
the provisions of the Internal Revenue Code. NSCC is also proposing 
that the members will agree that any dispute between them relating to 
these provisions will be resolved directly between them and that NSCC 
is not a party to such dispute and has no responsibility with respect 
to the enforcement or satisfaction of such provisions. In addition, the 
submission or processing of a transfer transaction through NSCC will 
not extinguish or otherwise affect any of the participants' legal 
rights arising out of the transaction.\5\
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    \5\ Similar provisions are contained in NSCC rules relating to 
other mutual fund services. See, e.g., NSCC Rule 50, Section 17 and 
NSCC Rule 52, Section 46.
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    The proposed rule change is consistent with Section 17A of the 
Act,\6\ as amended, because it will reduce the likelihood of manual 
processing errors, will lower costs, and will reduce the time needed to 
complete the transfer of customer mutual fund share registrations, 
thereby promoting the prompt and accurate clearance and settlement of 
reregistration of mutual fund share positions processed through NSCC's 
Fund/SERV service.
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    \6\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    NSCC does not believe that the proposed rule change will have any 
impact or impose any burden on competition.

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

    Written comments relating to the proposed rule change have not yet 
been solicited or received. NSCC will notify the Commission of any 
written comments received by NSCC.

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

    The foregoing proposed rule change has become effective upon filing 
pursuant to Section 19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-
4(f)(4) \8\ thereunder because the proposed rule change effects a 
change in an existing service of a registered clearing agency that: (i) 
Does not adversely affect the safeguarding of securities or funds in 
the custody or control of the clearing agency or for which it is 
responsible and (ii) does not significantly affect the respective 
rights or obligations of the clearing agency or persons using the 
service. At any time within sixty days of the filing of the proposed 
rule change, the Commission may summarily abrogate such rule change 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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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(4).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and

[[Page 5880]]

arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NSCC-2008-12 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Elizabeth 
M. Murphy, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NSCC-2008-12. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). 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 in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filings also will be available for 
inspection and copying at the principal office of NSCC and on NSCC's 
Web site at http://www.dtcc.com/downloads/legal/rule_filings/2008/
nscc/2008-12.pdf. All comments received will be posted without change; 
the Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NSCC-2008-12 and should be submitted on or before February 23, 2009.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-2120 Filed 1-30-09; 8:45 am]

BILLING CODE 8011-01-P