National Securities Clearing Corporation ("NSCC") has filed a rule change with the Securities and Exchange Commission ("SEC") involving NSCC's decision to discontinue providing custody, clearance and settlement of physical securities through its Direct Clearing Services ("Direct Clearing") and its New York Window Services (the "Window"). Current users of Direct Clearing and the Window will have the ability to receive similar services from The Depository Trust Company ("DTC") and to move their securities to DTC.

Direct Clearing is a physical securities processing service which NSCC has provided since its inception to NSCC participants who have no physical presence in the New York City metropolitan area. Principal services of Direct Clearing include (i) processing of receive and deliver transactions, (ii) processing transfers of physical securities, and (iii) processing deliveries to designated agents in connection with reorganizations and other corporate actions. In the course of providing these and other Direct Clearing services, NSCC may (iv) have custody of participants' physical securities (including overnight custody for one or more days).

The Window was originally approved by the Commission as a pilot project for NSCC in 1993, and became a permanent service in the following year. Principal services of the Window are similar to those of Direct Clearing, but were initially provided to NSCC participants located in the New York City metropolitan area. NSCC organized the Window in order to centralize redundant services maintained at many of NSCC's participants' offices that were based in and around New York City.

NSCC's proposed rule change will become effective concurrent with DTC's commencement of the proposed Window services, currently scheduled for July 10,1998. (See SR-DTC-98-9, filed with the SEC on May 13, 1998.) Members will be informed of the exact date of discontinuance 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 services should be directed to your Account Representative. Questions regarding the ability of current users to receive similar services from DTC and to move their securities to DTC should be directed to Ronald Burns, Vice President, DTC, at (212) -855-2412.

Robert J. Woldow
Managing Director and General Counsel