On Friday, November 13, 1998 and subject to SEC approval, NSCC plans to implement the redesign of its Automated Customer Account Transfer Service (ACATS). The last day for participants to input data into the current system will be November 13th. Beginning Monday,

November 16th, all participants must be prepared to submit and receive data from the redesigned ACATS and ACATS Fund/SERV systems. In order for participants to prepare for the implementation of the redesigned ACATS System, NSCC plans to have several phases of participant testing. This notice provides information regarding the first phase, which will allow participants to submit files for preliminary verification of structure and content. In addition, NSCC will make available pre-formatted machine readable output (MRO) and print image report files. The next phase of participant testing, which is expected to start beginning of August, will allow participants to submit data which will be processed and result in output data. NSCC will provide details of this full system test in a subsequent notice.

The following describes procedures participants should follow for the first phase of testing. In addition, this notice contains information relative to participants need to establish network connectivity prior to the participant system test in August. Attached to this notice are several appendixes. Appendix A provides information relative to all input and output file/reports; Appendix B provides specific information relative to selecting the appropriate Datatrak SYSIDs and Autoroute Product IDs and Appendix C gives an overview of the contents in the pre-formatted test files.

STEPS TO FOLLOW FOR PHASE 1 TEST

1. Beginning, Monday, June 1st, participants can contact the ACATS Participant Testing Group (PTG) at (212) 383- 4891 to begin the process of establishing network connectivity for the new ACATS Datatrak SYSIDs and Autoroute Product IDs. Please refer to the attached Appendix A, which lists all the new SYSIDs and Autoroute Product IDs. Prior to contacting the PTG, review Appendix B, which includes recommended "sets" of files/reports. Be prepared to advise PTG which sets of files/reports your firm wants to utilize for the ACATS Redesign. This information will be used by PTG to setup the appropriate network connectivity to send and receive the associated test files/reports and prepare for the full system test beginning in August. Please note that the actual testing of input and output files will not be available until June 23rd. However, this pre-test setup period will expedite participant readiness to start format testing.

As indicated in Appendix B, the input files (Variable Length-Datatrak 36667 and Fixed Length-32667), each contain three record types (TI-Transfer Information, AT-Asset Transfer and FR-Fund Registration). As part of your firms setup instructions, please indicate to PTG which of these three record types you plan to test. Participant submission of the TI and AT is required and submission of the FR record is optional.

Note: As part of the set-up for receiving the production multi-cycle transaction report ("M" file), please advise the PTG if your firm wants to receive a blank file at each cycle if there is no activity.

2. Beginning Tuesday, June 23rd, participants, who have already contacted the PTG and have been setup to input and receive file/reports, will be able to submit test input files and receive pre-formatted output files and reports from NSCC.

3. Participants are required to submit a test input file(s) during the format testing period. Participants who have not submitted a test file(s) to check for format and establish network connectivity may be delayed in their participation in the full system test scheduled for August. Test input files will be reviewed for basic reasonability checks (e.g. file structure).

Once input test(s) of all the record types (TI, AT, FR) , which the participant has indicated they plan to test has been successful, the participant’s test JCL will be taken down and a production JCL established to be used for the full system test in August.

4. Participants are strongly encouraged to test output files prior to the full system test in August. Please refer to Appendix B, which indicates the production and corresponding test Autoroute Product IDs. Appendix C explains the contents of the test files and the type of conditions NSCC plans to include in these files and reports.

Details of the redesigned ACATS and ACATS Fund/SERV Interface were distributed September 12, 1997 to participants via NSCC Important Notice A4649, the comprehensive ACATS Redesign Project Plan and the new input and output file layouts. Updates to the layouts were distributed in NSCC Important Notice A4736 dated March 17th, 1998. In addition, further details regarding the ACATS-Fund/SERV interface were documented in NSCC Important Notices A4699 dated December 29, 1997 and A4726 dated February 27, 1998. All the Important Notices and file layouts are available on NSCC’s ACATS Website at http://acats.nscc.com. In addition, the ACATS Website contains Frequently Asked Questions and various technical documents.

Any questions pertaining to this notice should be directed to the undersigned at (212) 412-8686 or E-Mail at emeringolo@nscc.com. Additionally, general ACATS questions can be directed to NSCC’s Participant Services Department at (212) 412-8432. General Mutual Fund questions on ACATS Fund/SERV can be directed to the Mutual Fund Hotline at (212) 412-8893. NSCC has identified an ACATS Co-ordinator at all ACATS and ACATS Fund/SERV broker dealers to be the primary contact at each firm. Any questions regarding the ACATS Co-ordinator or gaining access to the ACATS Website should be directed to your NSCC Account Manager.

Edlyn Meringolo
Vice President, Systems

The redesigned ACATS Datatrak SYSIDs are as follows:

Variable Length: 36667

Fixed Length: 32667

All ACATS input types (TI-Transfer Information, AT-Asset Transfer and FR-Fund Registration) are to be sent in each SYSID.

Please Note: The above, production Datatrak SYSIDs will be used, beginning in June, 1998, for participant testing prior to the November, 1998 conversion.

Please Note: The following Autoroute Product IDs are production numbers. For pre-formatted output, substitute "9" for the third (3rd) position of the production number. For example, the Variable Length Intra-Day Transaction Activity pre-formatted output file would be 02990716. Refer to Appendix B for a list of all pre-formatted output file Autoroute Product IDs. In addition, the approximate time (Eastern Standard Time) when files and reports will be available is indicated.

End of Day Reporting - ACATS Settlement (8:00 pm EST)

ACATS participants using CPU-to-CPU input and output mechanisms must choose between variable length and fixed length Datatrak input SYSIDs and Autoroute output product IDs. NSCC has grouped all input and output files listed in Appendix A into Sets A through G as described below. A minimum set of these files (either A or B) must be selected.

To ease set up, NSCC has created other groups of optional Autoroute output product IDs, which may be selected. Using these groups is recommended, however, specific list of product IDs outside these groupings can be accommodated upon request.

1. Mandatory Selection

Participants must select :

Standard Set A - Variable Length

or

Standard Set B - Fixed Length

2. Optional Selection

Participants may select any of the following groupings:

Supplemental Set C - Variable Length

or

Supplemental Set D - Fixed Length

Standard Set E - Reports

Deliver Instructions Set F - Reports

Receive Instructions Set G - Reports

The specific Datatrak SYSID and/or Autoroute Product IDs in each of these sets are listed below. Please note that the same SYSID is used for production and test, whereas, a different Autoroute Product ID is assigned for the pre-formatted test files and reports. The following sets contain information relative to input files, machine readable output (MRO) files and print image reports.

1. Every Autoroute product will have a test, "pre-formatted output" version (see Appendix B).

This includes all MRO output files and all report files.

NOTE: All pre-formatted output will contain test broker numbers.

2. The report files will correspond to the appropriate MRO output files.

3. Based on input from the ACATS Technical Advisory Committee, every pre-formatted output MRO file will have multiple days of data contained in one file. For MRO files, each day (and each cycle for the multi-cycle transaction MRO files) will have a header record, the data records and a trailer record. ACATS participants will edit or pre-process this data as needed to separate the file into cycles and/or days.

Example of file layout:

Header, Day 1, Cycle 1

Data records corresponding to Day 1, Cycle 1

Trailer, Day 1, Cycle 1

Header, Day 1, Cycle 2

Data records corresponding to Day 1, Cycle 2

Trailer, Day 1, Cycle 2

Header, Day 2, Cycle 1

Data records corresponding to Day 2, Cycle 1

Trailer, Day 2, Cycle 1

etc.

4. Reports, which are print images, will be concatenated together but will not have header and trailer records for each day/cycle. The day and/or cycle information is contained in the report heading; participants may burst the combined report by day/cycle if desired.

5. The Multi-Cycle Transaction MRO (the "M" file) and the End-of-Day Transaction MRO (the "E" file) pre-formatted output will not have exhaustive samples of every condition possible in the new ACATS system. A representative sample of the new ACATS functionality will be provided as follows:

For TIFs:

a. An example of every non-standard transfer type

b. An example of a non-standard transfer rejected by the receiver

c. An example of a non-standard without an asset which is rejected by the system

d. Standard transfers which demonstrate each status to completion

e. Examples of standard transfer rejects including:

- rejected by deliverer using a 24 hr reject code, and adjusted by receiver

- rejected by deliverer using a 24 hr reject code, and not adjusted by receiver

- rejected for non-24 hr reject code

- rejected due to a system reject code

f. Standard transfers which demonstrate receiver and deliverer adjustments

For Assets:

a. An example of each category of asset settling in each category of settling location

- Cash

- Equity

- Option

- Mutual Fund

- Foreign Asset

- Foreign Currency

- Memo items

b. An example of an asset which has been deleted and an asset which has been changed

For Fund Registrations:

a. An example of a successful fund registration add

b. An example of a fund registration that was system rejected

c. An example of usage of several of the new fund registration data fields including:

- LOI information added

- Payable information added

- Use of disbursement options

6. The Position ("P") and Settlement ("S") MRO pre-formatted output files will contain data consistent with the data reflected on the Multi-Cycle MRO pre-formatted output files. Some transfers will already by "in the system" to reduce the number of days required to produce a transfer in all status’s.

7. The Interface Organization Reject MRO (the "I" file) will contain:

a. An example of a reject from GSCC

b. An example of a reject from DTC

NOTE: Due to the recent announcement that PTC is merging with DTC, PTC will not be a valid settling location in November ‘98 and NSCC is not supporting participant testing for the PTC link at this time. It is expected that the ACATS interface to PTC will be available in 1999.

8. The ACATS-Fund/SERV Statistics MRO (the "F" file) will contain:

a. An example of a registration acknowledged by the fund

b. An example of a registration rejected by the fund

c. An example of a registration system rejected due to 7 days of inaction by the fund.