NASD Notice to Members 96-24 - April 1996

SEC Approves Rule Mandating TIF Immobilization; Effective Date: July 1, 1996

Executive Summary

On March 11, 1996, the Securities and Exchange Commission (SEC) approved an amendment to Section 65 of the NASD Uniform Practice Code (UPC) to require members to transmit customer account transfer instructions electronically. The NASD is amending Section 65 of the UPC to require members that are currently participants in the National Securities Clearing Corporation's (NSCC) Automated Customer Account Transfer Service (ACATS) to become participants in the securities industry's Transfer Initiation Form (TIF) Immobilization Pilot Program (Pilot Program) and transmit transfer instructions electronically through ACATS.

 

The NASD is adopting this change because it believes that requiring participation in the Pilot Program should help reduce or eliminate the infrequent delays that some customers may be experiencing when transferring accounts and improve investor confidence in the industry's ability and willingness to comply expeditiously with customer instructions. The amendment is effective on July 1, 1996; therefore, members that are participants in NSCC, including members that are also members of another self-regulatory organization (SRO), must take the actions necessary to become participants in the Pilot Program. The text of the amended Rule follows this Notice.

 

Members, including members of other SROs, should contact Wally Bolling at NSCC, at (212) 412-8657, to obtain information about the Pilot Program and become participants in the Pilot Program by the effective date of the amendment.

 

Questions regarding this Notice may be directed to Dorothy L. Kennedy, Assistant Director, Nasdaq Market Operations, at (203) 385-6243, or Elliott R. Curzon, Assistant General Counsel, Office of General Counsel, at (202) 728-8451.