A#	5692
P&S #:	5262
DATE:	October 7, 2003
TO:	ALL PARTICIPANTS
ATTENTION:	MANAGING PARTNER/OFFICER; OPERATIONS PARTNER/OFFICER; COMPLIANCE OFFICER
FROM:	GENERAL COUNSEL'S OFFICE
SUBJECT:	RULE FILING SR-NSCC-2003-20 - Amendments to the Rules of National Securities Clearing Corporation relating to Membership Standards for Use of Mutual Fund Services

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National Securities Clearing Corporation ("NSCC" or “the Corporation”) has filed a rule change with the Securities and Exchange Commission ("SEC") which will conform membership criteria applicable to Mutual Fund services for transactions in all types of products, by eliminating the more stringent financial criteria which are currently required for members to be eligible to do transactions in “Investment Funds” (i.e., funds subject to regulation under banking or insurance law), as compared to the requirements applicable to such members using Mutual Fund services for transactions in mutual funds.

Membership criteria for use of Mutual Fund services is set forth in Addendum B of NSCC’s Rules, applicable to NSCC Members (including Members using Mutual Fund and Insurance Services only) and in Addendum I of NSCC’s Rules, applicable to Fund Members. In addition, Addendum V sets forth more stringent criteria applicable to Mutual Fund/Insurance Services Members and Fund Members using Mutual Fund services to do transactions in Investment Funds.

The proposed rule change changes the standards of financial responsibility required for Members and Fund Members using NSCC’s Mutual Fund Services by deleting Addendum V, “Financial Standards for Applicants and Participants Processing Investment Fund Transactions through Mutual Fund Services”.

With the deletion of Addendum V, such applicants and members shall remain subject to the criteria set forth in Addendum B (applicable to Mutual Fund/Insurance Service Members) and Addendum I (applicable to Fund Members) with respect to transactions in both mutual funds and Investment Funds.

The full text of the rule change as well as the above NSCC Important Notice may be obtained by visiting our web site at www.nscc.com. NSCC has requested accelerated approval of this proposed rule change. Written comments on the proposed rule filing may be addressed to Lisa T. Siebold, Assistant Secretary, National Securities Clearing Corporation, 55 Water Street, New York, New York 10041, and your comments will be forwarded to the SEC. 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 this notice may be directed to Carol Jameson at (212) 855-3213.

Karen L. Saperstein
Managing Director and General Counsel