[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
