As mentioned in NSCC Important Notice A#5840, P&S#5410 dated June 11, 2004, the implementation dates for CNS Rewrite Phase 2 are August 6 and 20, 2004.  NSCC recently issued a notice, A#5856, P&S#5426 dated July 12, 2004, which provided specific information related to when certain functionality will be implemented and how this will impact the participant’s file inputs and outputs. Participants should note the following additional CNS rewrite implementation information. 

FILE OUTPUT

Friday, August 6, 2004 – File Output: Friday evening, early Saturday morning

As part of the CNS rewrite conversion on Friday night, NSCC will be verifying all participant output prior to distribution.  Therefore, participants should expect to receive CNS files due out Friday night/Saturday morning later than the normal scheduled times.  Please refer to Exhibit A for list of these files.

PCWEB DIRECT INPUT

Friday, August 6, 2004 for settlement of Monday, August 9, 2004

CNS Seg Exemptions                          (cutoff – 6:00 pm ET)

CNS Priorities                                         (cutoff – 6:00 pm ET)

CNS Stock Borrow-Night                       (cutoff – 6:00 pm ET)               

CNS Stock Borrow Adjustment-Night  (cutoff – 7:00 pm ET)

Buy-In Intents                                          (cutoff – 6:00 pm ET)

Reorg                                                     (cutoff – 6:00 pm ET)

Reorg Adjustment                                  (cutoff – 6:00 pm ET)        

·        Fully Paid For

o       The only PCWEB CNS input on Friday, where bonds should be in the old format (1=1000), is for Fully Paid For transactions, since they are applied same day as input.

o       Fully Paid For            (cutoff –1:00 pm ET)                           

Monday, August 9, 2004

PTS INPUT

Friday, August 6, 2004 for settlement of Monday, August 9, 2004

·         On Friday, the CNSE function will allow participants to enter “ALL” instead of a specific quantity for their Level 1 or Level 2 exemptions

·         There is no change to the way participants submit bonds on PTS input.  Currently, all submissions are at face value.

·         No changes to any other PTS CNS function.

AUTOMATED DELIVER ORDERS

Friday, August 6, 2004 for settlement of Monday, August 9, 2004 and Tuesday, August 10, 2004

·     After August 5 for settlement date August 9, NSCC will no longer submit the Muni Bond    PDQ file to DTC for processing. Refer to NSCC Important Notice A5799 P&S 5369 dated April 13, 2004 for additional information.

·         For those participants that have chosen to utilize NSCC’s new Automation of non-CNS Deliver Orders for Equity and Fixed income items, the Consolidated Trade Summary (CTS) issued Friday evening will contain the new DTC Auto DO Indicator set to “Y” for the applicable non-CNS DTC eligible securities.

·         The one-day settling trades on Friday’s CTS will generate automated deliver orders for the day cycle on Monday. Going forward, all one-day settling trades will be processed in the day cycle.  

·         The two-day (regular way) trades on Friday’s CTS will generate automated deliver orders for settlement date August 10 and be processed in the night cycle. Going forward, all two-day settling trades will be processed in the night cycle.

PARTICIPANT PRE-IMPLEMENTATION SET-UPS

As mentioned in NSCC Important Notice A 5833 P&S 5403 dated June 4, 2004, participants should contact their Relationship Manager at least 1 week prior to implementation to provide instructions to use certain features of the new system.  These instructions include elections for the following:

·        Automated Deliver Order feature for non-CNS DTC eligible securities

·        Submission of new CNS files

·        Receipt of new CNS intra-day messages

·        Access to Participant Browser Service (PBS)

·        Updating standing priority and exemption instructions

If you have any questions, please contact your Relationship Manager, Vincent Mc Devitt at (212) 855-5694 or the undersigned at (212) 855-5697.

Edlyn Meringolo
Vice President, Product Management  

See attached Exhibit A