A 5883 - August 17, 2004

A#	5883
P&S #:	5453
DATE:	August 17, 2004
TO:	ALL PARTICIPANTS
ATTENTION:	MANAGER P&S DEPARTMENT,CASHERING, MUTUAL FUNDS, ACATS, EXECUTIVE AND INSURANCE DEPARTAMENTS
FROM:	DISTRIBUTION SERVICES
SUBJECT:	MUTUAL FUNDS - COMMISSION SETTLEMENT SYSTEM; MUTUAL FUNDS - NETWORKING ACTIVITY

On Saturday, November 20, 2004, the National Securities Clearing Corporation’s (NSCC) Mutual Fund Commission Settlement System and the Networking Activity stream will be modified.

Commission Settlement Changes

One new field will be added to the Commission Settlement Detail Record (Record Type F31, Sequence Number 2). The new field is:

Assets Eligible for Trails (This is the average daily balance that trails are paid on.)

Another field, Gross Amount of Trade, will be renamed Gross Amount of Trade/Total Security Assets. The renamed field will have a dual role. The field will be used for the Total Security Amount when reporting trail commission amounts. However, funds may continue to populate the field with the Gross Amount of Trade when reporting trade transactions.

Both fields are defined as dollar amounts that are 16-byte numeric fields with two decimal places. The fields will be optional. Please note, Sequence Record 2, is an optional record.

Bytes 79-94, at the bottom of Sequence Record 2, will be used for the new Assets Eligible for Trails field. Currently, this is designated as filler space.

Networking - Activity Stream

A new field, Load Type Indicator, will be added to the Detail Activity Record (Record Type F55).

Similar to Fund/SERV, any purchase or exchange activity done directly at the fund will require a Sales Charge Rate for front-end load securities issues. (See Important Notice A #5834, P&S#5404, dated June 4, 2004.)

Sales Charge Rate

9.999
Must be provided (but allowed to be zero) for

Transaction Type	Transaction Description Code	Definition
01	A0 – A9 AB - AP	Direct Purchase
03	C (not assigned)	Pre-Authorized Check (PAC)
09	I (not assigned)	Fund Price Adjustment
10	J0	Direct Exchange
24	X (not assigned)	Direct Purchase Cancellation

if Load Type Indicator = 1.

Load Type Indicator

A/N

0 = Other
1 = Front-End Load

Required for

Transaction Type	Transaction Description Code	Definition
01	A0 – A9 AB - AP	Direct Purchase
03	C (not assigned)	Pre-Authorized Check (PAC)
09	I (not assigned)	Fund Price Adjustment
10	J0	Direct Exchange
24	X (not assigned)	Direct Purchase Cancellation

The new Commission Settlement and Activity record layouts may be found on NSCC's website, http://formats.nscc.com while the User Guide and Technical Manual for the services may be found on http://fundserv.nscc.com. Participants are encouraged to allow adequate testing time.

Testing of the new functionality for Commission Settlement and Networking Activity will be accommodated in the Participant Services Environment (PSE) region on the mainframe, beginning Saturday, October 23, 2004.

Networking Activity Report changes will be supported on PC Web Direct’s PSE region starting Saturday, November 13, 2004.

Participants wishing to test must contact the Enterprise Service Center (ESC) by calling the NSCC Production Support Hotline at 212-855-1144, option 5, option 2. To ensure proper set up for the PSE region, it is requested that at least three days prior notice be provided to ESC.

Any questions regarding this notice should be addressed to the undersigned or to the Mutual Fund Marketing Line on 212-855-8877.

Randy W. Solomon
Director
Distribution Services