A 4830 - September 21, 1998
P&S 4394

TO: ALL PARTICIPANTS

ATTENTION:  MANAGING PARTNER/OFFICER; OPERATIONS PARTNER/OFFICER; MANAGER CUSTOMER ACCOUNT TRANSFER DEPARTMENT; MANAGER MARGIN DEPARTMENT; MANAGER DATA PROCESSING DEPARTMENT; MANAGER MUTUAL FUNDS OPERATIONS; MANAGER CASHIERS DEPARTMENT

SUBJECT: ACATS REDESIGN - CONVERSION TESTS AND PARTICIPANT SYSTEM TEST INFORMATION

On Monday, January 25, 1999 and subject to SEC approval, NSCC plans to implement the redesign of the Automated Customer Account Transfer Service (ACATS). This notice provides information regarding the next phase of participant testing. It provides a detailed timeline of participant testing scheduled from mid-October through the implementation of the redesigned system. Part of the implementation is a conversion of data from the current system to the new system. Specific information regarding this conversion and the availability of conversion test files is contained on the following pages.

Additionally, specific information is being provided to aid participants in preparation for the ACATS participant system testing scheduled to begin Monday, November 16, 1998. Participants should have completed their network connectivity and format testing prior to the participant system test. Specific information needed from participants prior to Nov. 16th is documented on the following pages.

Section I describes the Participant Testing Schedule. Section II describes Conversion, which includes the schedule for conversion week-end beginning January 22, 1999; rules for converting current ACATS data to the redesigned ACATS data and the availability of test conversion files. Section III describes the final steps participants need to take in order to be ready for the participant system test.

I. Participant Testing Schedule

The following participant testing schedule depicts the types of testing participants can expect to participate in prior to implementation:

II. CONVERSION

The following information relates to that part of participant testing which addresses the conversion of the current ACATS production data to the redesigned system:

A. CONVERSION SCHEDULE & RULES

Please refer to attached Conversion Document (Exhibit A), which documents the planned schedule for the ACATS conversion week-end beginning 1/22/99 and describes specific conversion rules. This is an updated version of the document which has been available on NSCC’s ACATS website (acats.nscc.com).

B. CONVERSION TEST FILES and REPORTS

Beginning mid-October, NSCC will have available conversion test files and reports for participants to use as samples of the conversion files they will receive when the redesigned system is implemented in January 1999. These files and reports will be available weekly and contain end of day Friday production data which has been converted to the new ACATS. The files and reports will be available on the following Monday. NSCC will provide these conversion files up to the time that participant system testing commences mid-November.

The conversion data will be available by production Autoroute Product IDs as follows:

CONVERSION TEST DATA

Participants, who have already contacted the ACATS Participant Testing Group (PTG) and established network connectivity set-up procedures for test output, will be contacted regarding how they want to receive the test conversion files when they are available. Please note that the test conversion files will be using the production Autoroute Product IDs so participants may have a different set-up requirement than the test Autoroute Product IDs.

III. FINAL STEPS TO PREPARE FOR PARTICIPANT SYSTEM TEST

Since June 23rd, participants have been able to submit test input files to NSCC for format testing. NSCC has received test files and many participants have successfully tested all three record types (TI, AT, FR). Participants who have not contacted ACATS PTG to set up connectivity procedures or transmitted input test files for format verification should do so as soon as possible. Participants will not be able to participate in the Participant System Test until they have successfully established network connectivity and submitted test input files for format verification for all record types.

B. PROCEDURES TO RECEIVE PRODUCTION AUTOROUTE PRODUCTS

In addition to establishing set-up procedures for the test conversion files, participants will be asked by SIAC for production connectivity set-ups for the production Autoroute Product IDs they plan to receive. These set-ups may be different from the test set-ups. All production set-ups must be completed before participant system testing begins mid-November since all output processed by ACATS during participant system test will be utilizing production Autoroute Product IDs.

Participants, who have not contacted PTG for pre-formatted files and reports which have been available since July 31st, should do so as soon as possible so appropriate set-up procedures can be established. ACATS PTG can be contacted at (212)383-4891. Participants are strongly encouraged to test output files prior to the full system participant test scheduled for mid-November. Please refer to NSCC Important Notice A4792 dated June 30, 1998 for the revised testing and implementation dates.

C. PARTICIPANT PROFILE INFORMATION

Each ACATS participant will be contacted shortly by NSCC Marketing regarding various ACATS participant profile information which will be needed for the new system. Some examples of information needed include: whether participants will be set up for the new NSCC-GSCC link for transferring government securities and if NSCC should not automatically send Deliver Instructions to DTC for non-CNS DTC eligible securities.

In order to simulate how participants will process transfers in the production environment, NSCC wants to update all profile information prior to the participant system test in November. Once participants receive the profile questionnaire, a timely response is needed.

D. PARTNERING OF PARTICIPANTS & GENERIC TEST SCRIPTS

The SIA Customer Account Transfer Division has taken an active role in preparing generic test scripts which participants can utilize for their testing of the redesigned ACATS. These test scripts have been available on NSCC’s ACATS Website (acats.nscc.com) and the Customer Account Transfer Division Web Site (sia.com/about_sia/html/cat.html).

In addition to preparing these test scripts, the Customer Account Transfer Division is in the process of setting up test partners to facilitate the ACATS participant system test beginning in November. Participants should expect a notification shortly from the Division with specifics regarding the assigned partners.

E. PC WEB DIRECT USERS

NSCC expects to have its new PC Web Direct for ACATS application available for participant system testing in November. Participants, who expect to utilize PC Web Direct for ACATS input and/or receipt of Autoroute Product output, must notify their NSCC Account Manager to make sure that all necessary PC Web Direct set-up procedures have been completed prior to the ACATS participant system test in mid-November.

In addition, participants who plan to use PC Web Direct to receive the new ACATS Autoroute Products (files/reports) need to be set up in Autoroute prior to the participant system test in November. Participants who have indicated they plan to use PC Web Direct will be contacted shortly regarding the list of Autoroute Products they may want to receive via PC Web Direct. The list of the new ACATS production Autoroute Product IDs can be found in NSCC Important Notice A4773, dated May 26, 1998.

F. PREPARE INPUT AND OUTPUT CYCLES BASED ON NEW ACATS MULTI-CYCLE TIMING

The frequency of the ACATS cycles will be changed from 8 cycles to 5 cycles per day as follows. These new cycles will also be followed during the participant system test. Please note that there is no change to the previous published input cut-off times for the various transaction types:

SUMMARY OF SINGLE CYCLE OUTPUT

In addition to the multi-cycle output, participants can receive other single cycle output at the following times.

All ACATS Redesign 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 regarding ACATS Fund/SERV can be directed to the Mutual Fund Hotline at (212) 412-8893.

Edlyn Meringolo
Vice President
Product Development

General Overview and Timing

Conversion Specifics - General

The following comments pertain to all record types on the "P" ACATS Transfer Position MRO post conversion file.

ACATS Control Number

ACATS control numbers will be converted from the current JJJNNNNN format where:

to new format CCYYJJJNNNNNNN where:

NOTE: for converted ACATS control numbers only residual credit ACATS control numbers will remain Julian date of submission+400, avoiding duplicate control numbers.

All dates will be converted to the new Y2K compliant date formats of CCYYMMDD or MMYYCC (for options) as per the new input format rules.

All quantity fields will be converted to the equivalent input format rules.

Status:

The following table summarizes the conversion rules for Status’s:

Note: In the redesigned ACATS system, day 2 of Review or Review Adjust status is normally only used for holiday processing. During the conversion day 2 of Review or Review Adjust will be used for those transfers which in the old system would be in the second day of Pend or Pend Adjust status, respectively.

For conversion of residual credit non-standard transfers, the above table will be used except as follows:

General Editing Rules

The existing ACATS system does not always check that the value of each field is within the acceptable values for the field. Excluding those cases where special conversion actions are taken as detailed within this document, unacceptable values will be converted to:

• spaces, if spaces are allowed for the field
• the default value when there is a default for the field
  

Both receiver and deliverer customer account numbers will be left justified with all blanks/spaces, special characters and non-printable removed. If the resulting customer account number would be null (i.e. originally the customer account number consisted exclusively of blanks/spaces, special characters or non-printable characters) then the customer account number will be set to:

"XXXXXXXXXXXXXXXXXXXX"

(i.e. twenty (20) "X" characters.)

Transfer Type

The transfer type will be set to "FUL" (full account transfers) when the JJJ portion of the old ACATS control number is less than 400. The transfer type will be set to "RCR" (residual credit) when the JJJ portion of the old ACATS control number is greater than 400.

The customer account type will be converted per the following table:

Transfer Type Reject Codes

Note: the old ACATS system had an "07" Account Type Mismatch code which does not exist in the new system. This has been mapped to code "03" Documentation Needed.

The old ACATS system allowed Residual Credit transfers to be in Pend-Err status. The redesigned ACATS system has no equivalent status. All Residual Credit transfers which were in Pend-Err status will be converted to Status 600-Reject with the Reject Code set to 99-NSCC Ceases to Act.

Conversion Specifics - Assets

Asset Pricing Category codes will be converted per the following table:

The ISIN Security Issue ID is the US CUSIP from the existing system and is a direct conversion except the ACATS created CUSIPs of ‘888888888’ and ‘999999999’ for credit Cash and debit Cash, respectively, will be set to spaces.

"User CUSIPs" (i.e. ISIN Security Issue ID’s not on the ACATS security files submitted by a participant) will continue to be shown to the submitter (deliverer) and be spaces for the contra (receiver).

Settling Location and Settling Location Reason

Bearer Bond Indicator

Conversion Specifics - Fund Registrations

Fund Account Indicator