A 5664 - August 14, 2003

A#	5664
P&S #:	5234

DATE:	August 14, 2003

TO:	ALL PARTICIPANTS

ATTENTION:	MANAGER MUTUAL FUNDS OPERATIONS, MANAGER DATA PROCESSING, MANAGER CASHIERS, MANAGER P&S DEPARTMENT, MANAGING PARTNER/OFFICER, OPERATIONS PARTNER/OFFICER, MANAGER CUSTOMER ACCOUNT TRANSFER DEPARTMENT, MANAGER MARGIN DEPARTMENT

FROM:	MUTUAL FUNDS - DISTRIBUTION SERVICES

SUBJECT:	FUND/SERV "TEST FUND" PROCESS TO TEST MODIFICATIONS TO ACATS -FUND/SERV FOR TRANSFER OF ACCRUAL INFORMATION

Effective September 22, 2003, National Securities Clearing Corporation (NSCC) will be implementing system enhancements to Networking and ACATS - Fund/SERV for Transfer of Accrual Information. (See Important Notice A #5627, P&S #5197 dated June 10, 2003).

To accommodate those firms that would like to test the ACATS-Fund/SERV system changes before going into production, but cannot find a fund partner to test with, NSCC has created the “Fund/SERV Test Fund Process” described below for firms to use.

Fund/SERV “Test Fund” Process

Fund/SERV “Test Fund” Process is a feature by which Fund/SERV plays the role of a fund by replying to firm input. Fund/SERV “Test Fund” Process runs in the Participant Service Environment (PSE) only. It does not run in production. It is intended for firms who wish to test their system using Fund/SERV PSE, but do not have fund partners to test with.

Fund/SERV “Test Fund” Process plays the role of fund number 5119.

Fund/SERV “Test Fund” Process will create an ACATS Acknowledgement (019) for an ACATS Transfer (018)** when the security issue belongs to fund 5119.

(**The ACATS Transfer (018) is the transfer record of re-registration information passed from the ACATS system to the mutual fund companies via Fund/SERV.)

The following security issues belong to fund 5119 and can be used by the broker:

000002303

000003103

000003202

000003301

ACATS Transfers (018) with security issue 000003202 will get rejected, Fund/SERV will create ACATS Acknowledgment (019) with reject code 98. Any other ACATS Transfer (018) gets accepted.

The new accrual fields and record length of the created ACATS Acknowledgement (019) will be as follows:

1. If on the ACATS Transfer (018) Accrual Money Amount is zero or space, and Accrual Money Amount Indicator is space, then the ACATS Acknowledgement (019) record length will be 197 with no new accrual fields.

2. In any other case where the ACATS Transfer (018) Accrual Money Amount is greater than zero or Accrual Money Amount Indicator is NOT a space, the ACATS Acknowledgment (019) record length will be 290, and Accrual Money Amount and Accrual Money Amount Indicator will be copied from the ACATS Transfer (018) to the ACATS Acknowledgment (019).

Please see the attached Appendix A for a full explanation of how the Fund/SERV “Test Fund” Process works, record types being replied to, record types being created, and the rules to be followed when testing with the “Test Fund” 5119.

Beginning August 25, 2003, testing of the new record layouts will be provided in the Participant Services Environment (PSE) region. Participants wishing to test must contact the Enterprise Service Center Participant Test Group (PTG) at (212) 855-1144, Option 5, Option 2. To ensure proper set up for the PSE region, a request must be received by PTG at least three days prior to the date you wish to initiate testing.

Any questions or concerns regarding this Important Notice can be directed to Mutual Fund Services at 212-855-8877 or the undersigned at 212-855-5677.

Rita A. Gribben

Product Manager

Mutual Fund Services

Appendix A - Fund/SERV “Test Fund” Process

1. What it is

Fund/SERV “Test Fund” Process is a feature by which Fund/SERV plays the role of a fund by replying to firm input.

2. Environment

Fund/SERV “Test Fund” Process runs in Participant Service Environment (PSE) only. It does not run in production.

3. Who should use Fund/SERV Test Fund Process

Fund/SERV “Test Fund” Process is intended for firms who wish to test their system using Fund/SERV PSE, but do not have fund partners to test with.

4. Fund number being played by Fund/SERV

Fund/SERV “Test Fund” Process plays the role of fund number 5119.

5. Using Fund/SERV “Test Fund” Process

Firms trigger Fund/SERV “Test Fund” Process by submitting records with security issues belong to fund 5119. Fund/SERV automatically replies to such records, playing the role of fund 5119.

Note: Only specific record types are being replied to by Fund/SERV “Test Fund” Process, as described below.

6. Security issues belong to fund 5119

The following security issues belong to fund 5119, and may be used to have Fund/SERV “Test Fund” Process reply to input records:

            Security          Security          Currency         Fund                Order Settlement
               Issue                        Type                 Code                        Number                  Cycle
            000003103      25 = Load           USN             5119                            3
            000003202      26 = No load      USD             5119                            1
            000003301      26 = No load      USD             5119                            3

7. Record types being replied to, and record types being created

The following are the record types being replied to, and the record types being created by Fund/SERV “Test Fund” Process. Only record submitted by firms are being replied to.

Record type(s) created by Fund/SERV
Record type submitted by firms “Test Fund” Process

001 - Order 005 - Confirmation

109 - Release to Settlement (if needed)

003 - Correction 025 - Correction Confirmation

109 - Release to Settlement (if needed)

004 - As-Of Order 005 - Confirmation

109 - Release to Settlement (if needed)

015 - Exchange 016 - Exchange Confirmation

018 - ACATS Transfer 019 - ACATS Acknowledgment

139 - Firm Exit (Post Sett Only) 005 - Confirmation

016 - Exchange Confirmation

400 - Short Registration 112 - Registration Acknowledgment

401 - Full Registration 112 - Registration Acknowledgment

All other input record types are not being responded to by Fund/SERV “Test Fund” Process.

8. Populating fields in created records

Fund/SERV “Test Fund” Process populates the fields in the record it creates as follows:

1. All fields that exist on both layouts (the record submitted by the firm, and the record created by Fund/SERV “Test Fund” Process will remain the same, except as specified below.

2. All optional fields, which exist in layouts of records created by Fund/SERV “Test Fund” Process but not on the layouts of the records submitted by the firm, will be blank, except as specified below.

The following fields have special rules:

1.      Price Per Share will be set as follows

- Money market order:                  $1
- Not money market order:            $1.5

2. - Exchange From: $1.5
- Exchange To: $3

3.      Dollar amount, Share Quantity, Amount Due:

- If original Dollar Amount = zero, and Share Quantity > zero
          then: Dollar Amount will be set to Share Quantity * Price Per Share,
                    Amount Due will be set to Dollar Amount.

- If original Dollar Amount > zero, and Share Quantity = zero
          then: Share Quantity will be set to Dollar Amount / Price Per Share,
                    Amount Due will be set to Dollar Amount.

- If both original Dollar Amount and Share Quantity > zero
          then: Amount Due will be set to Share Quantity * Price Per Share.

- If both original Dollar Amount and Share Quantity = zero
          then: Share Quantity will be set to 1,000,
                    Dollar Amount will be set to Share Quantity * Price Per Share,
                    Amount Due will be set to Dollar Amount.

9. Populating fields in created ACATS Acknowledgments

Fund/SERV “Test Fund” Process populates the fields in ACATS Acknowledgments (record type 019) it creates as follows:

1. All fields that exist on both ACATS Transfer (record type 018) and ACATS Acknowledgment (record type 019) will remain the same, except as specified below.

2. All optional fields, which exist in ACATS Acknowledgments but not on ACATS Transfers, will be blank, except as specified below.

The following fields have special rules:

1.      Fund Reject Code:

- If Security Issue is 000003202
         then: Fund Reject Code will be set to 098 (rejected by fund).

- If Security Issue is not 000003202
         then: Fund Reject Code will be set to space (accepted by fund).

The new accrual fields and record length of the created ACATS Acknowledgement (019) will be as follows:

If on the ACATS Transfer (018) Accrual Money Amount is zero or space, and Accrual Money Amount Indicator is space, then the ACATS Acknowledgement (019) record length will be 197 with no new accrual fields.

In any other case where the ACATS Transfer (018) Accrual Money Amount is greater than zero or Accrual Money Amount Indicator is NOT a space, the ACATS Acknowledgment (019) record length will be 290, and Accrual Money Amount and Accrual Money Amount Indicator will be copied from the ACATS Transfer (018) to the ACATS Acknowledgment (019).