SUBJECT: TRADE COMPARISON SYSTEM FOR OVER-THE-COUNTER SECURITIES--MODIFICATIONS TO NSCC’S PROCEDURES

National Securities Clearing Corporation ("NSCC") has filed a rule change with the Securities and Exchange Commission to modify the Procedures of NSCC in connection with the Corporation’s Trade Comparison System for Over-the-Counter ("OTC") equity securities.

The proposed rule change will result in the discontinuation of the following transaction types: the Delete of Original Trade Input, the Demand Withhold and the Demand As-Of, which are used very infrequently by NSCC members due to the growth of automated trading systems. Their elimination will result in reduced costs to members.

Additionally, the change will result in the life-cycle of an open Advisory Listing being decreased to one day for original input and as-of trades. This change, which will also reduce costs, results from extremely limited acceptances of Advisories on T+2.

A third change will be the elimination of carry forward totals from Supplemental and Added Trade Contact Lists. NSCC has been advised that due to the increasingly automated processing environment, this information is no longer necessary. This will reduce computer processing time and therefore will also diminish production costs.

The proposed change will be implemented in April of 1998. Members will be informed of the exact date of implementation by an Important Notice.

The text of the proposed rule change may be obtained by contacting the NSCC Legal Department at (212) 412-8634.

Written comments on the proposed rule filing may be addressed to David F. Hoyt, Assistant Secretary, National Securities Clearing Corporation, 55 Water Street, New York, New York 10041, and your comments will be forwarded to the Securities and Exchange Commission. You may also address your written comments to the Secretary of the Commission, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, D.C. 20549. We request that you provide NSCC with a copy of your comments.

Questions regarding the rule filing should be directed to Richard J. Paley, Associate Counsel, at (212) 412-8874. Questions regarding the modifications to NSCC’s Procedures should be directed to Henry Belusa, Vice President Systems, at (212) 412-8548.

Robert J. Woldow
Managing Director and General Counsel