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FEDERAL RESERVE BANK
OF NEW YORK
/• ' t
;V
August 1 8 , 1978
MISSING, LOST, COUNTERFEIT, OR STOLEN SECURITIES
Request for Comments on SEC Program
To T h e C h ie f E x e c u tiv e O ffic e r s o f A ll State Member
B a n k s in T he S ec o n d F e d e r a l R e s e r v e D is tric t:
-Ln our C ir c u la r Fo. 8 1L 3 , dated. J u l y 1 1 , 1977» ve in d ic a te d th a t
th e S e c u r it i e s and Exchange Commission had adopted r e g u la t io n s —R ule 1 7 f - l —
to m onitor m is s in g , l o s t , c o u n t e r f e it , or s t o le n s e c u r i t i e s . These
r e g u la t io n s r e q u ir e a l l S t a t e member b a n k s, among o t h e r s , to make c e r t a in
re p o r ts and in q u ir ie s in v o lv in g th e s e s e c u r i t i e s .
As in d ic a te d in th e e n clo se d F e d e ra l R e g is t e r n o t ic e , the
Commission i s now s o l i c i t i n g p u b lic comment on th e p r o v is io n s and o t e r a t io n
o f th e Lost and S to le n S e c u r it i e s Program and on th e r e d e s ig n a tio n o f the
S e c u r it i e s in fo rm a tio n C en ter, m e . to m ain tain and o p e ra te th e d ata b ase
o f re p o rte d m is s in g , l o s t , c o u n t e r f e it , o r s t o le n s e c u r i t i e s f o r an a d d it io n a l
s p e c if i e d p e r io d . Such comments must be r e c e iv e d by th e Commission on or
b e fo r e September £ , 19 7 8 .
For f u r t h e r in fo rm atio n re g a rd in g t h i s m a tte r you may c o n ta ct th e
S e c u r it i e s and Exchange Commission, th e ad d ress o f which i s in clu d e d in th e
e n clo sed F e d e ra l R e g is t e r n o tic e .
Paul A. V olcker .
President.
PROPOSED RULES
ments by the staff of the Commission,
the Commission may propose amend
ments to rule 17f-l (17 CFR 240.17f-l)
reflecting the views of interested per
sons submitted in response to this re
lease.
BACKGROUND
[8 0 1 0 -0 1 ]
SECDR!T!ES AM D EXCH AN G E
C O M M ISSIO N
[17
CFR PoU** 240, 24 !, am* 249 )
[Release No. 34-15015; File No. S7-611]
LOST AMO STOLEN SECURITIES
Advance Notice of intent To Engage in
KuieetaMng
AGENCY: Securities and Exchange
Commission.
ACTION: Advance notiee of intent to
engage in rulemaking.
SUMMARY: The Commission re
quests comment on the provisions and
operation of the Lost and Stolen Secu
rities Program and on the redesigna
tion of the Securities Information
Center. Inc. ("SIC") to maintain and
operate the data base of reported
missing, lost, counterfeit or stolen se
curities. In initially implementing the
Lost and Stolen Securities Program,
the Commission provided that its first
year of operation would be conducted
on a pilot basis and that the designa
tion of SIC would terminate at the
end of the pilot year. Comments are
solicited in order that the Commission
may assess whether modifications to
the Lost and Stolen Securities Pro
gram may be appropriate and whether
a redesignation of SIC should be made
for an additional specified term.
DATE: Comments must be received on
or before September 8, 1978.
ADDRESS: Persons wishing to submit
written views, data, and comments
should file three copies thereof with
George A. Fitzsimmons, Secretary, Se
curities and Exchange Commission,
Washington, D.C. 20549. All submis
sions should refer to File No. S7-611
and will be available for public inspec
tion.
FOR FURTHER INFORMATION
CONTACT:
Gregory C. Yadley, Division of
Market Regulation, Securities and
Exchange Commission, Washington,
D.C. 20549, telephone 202-376-8129.
SUPPLEMENTARY INFORMATION:
In order to facilitate conversion of the
pilot phase of the Lost and Stolen Se
curities Program (the "Program") to a
more permanent basis, the Commis
sion has determined that it is appro
priate at this time to solicit comments
concerning the provisions and oper. ation of the Program. Subsequent to
the review and analysis of these com
Problems relating to missing, lost,
counterfeit or stolen securities were
outlined by the Commission, in 1970 *
and were subsequently the subject of a
series of Congressional hearings. =* Im
plementation of a system to receive re
ports and inquiries concerning miss
ing, lost, counterfeit and stolen securi
ties was recommended by members of
Congress, the industry, and law en
forcement agencies. To accomplish
this objective, the Securities Acts
Amendments of 1975 * introduced new
section 17(f)(1) into the Securities Ex
change Act of 1934 (the "Act") and
provided that certain financial institu
tions *shall make reports and inquiries
with respect to missing, lost, counter
feit or stolen securities in accordance
with rules promulgated by the Com
mission. The section also provides that
reports and inquiries shall be made to
the "Commission or other person des
ignated by the Commission" and that
reasonable fees may be charged for
the processing of such data.
On December 6, 1976, the Commis
sion adopted $ 240.17f-l establishing
reporting and inquiry requirements
with respect to missing, lost, counter
feit or stolen securities.* On August 5.
1977, the final, amended version of the
section was published,' and on Janu' Study of Unsafe and Unsound Practices
of Brokers and Dealers. Report and Recom
mendations of the Securities and Exchange
Commission (pursuant to section 11(h) of
the Securities Investor Protection Act of
1970), December 1970.
*Organized Crime—Stolen Securities,
hearings before the Permanent Subcommit
tee on Investigations. Senate Committee on
Government Operations. 92d Cong.. 1st
Sess. (1971); 93d Cong., 1st Sess. (1973); 93d
Cong. 2d Sess. (1974).
'Pub. L. 94-29 (June 4. 1975).
'The institutions subject to section
17(f)(1) are enumerated in the statute as
follows: Every national securities excnange,
memoer thereof, registered securities associ
ation, broker, dealer, municipal securities
dealer, registered transfer agent, registered
clearing
agency.
participant
therein,
member of the Federal Reserve System, and
bank wnose deposits are insured by the Fed
eral Deposit Insurance Corporation.
*Securities Exchange Act Release No.
13053. 41 FR 54923 (December 6. 1976). Cer
tain technical amendments to the section
were made by the Commission in Securities
Exchange Act Release No. 13280. 42 FR
11829 (March 1, 1977). Further amendments
regarding the role of transfer agents in the
program were proposed in Securities Ex
change Act Release No. 13281, 42 FR 11844
(March 1, 1977) and incorporated into the
rule in Securities Exchange Act Release No.
13832, 42 FR 41022 (August 12. 1977).
'Securities Exchange Act Release No.
13832, 42 FR 41022 (August 12. 1977).
FEDERAL REGISTER. VOL 43, NO. !52—MONDAY, AUGUST 7, !97$
PROPOSED RULES
ary 2, 1978, the computerized system cation of the section with respect to
for the processing of reports and in such institutions. Similarly, It may be
appropriate to broaden the scope of
quiries became fully operational.
In order to monitor the effectiveness the section to include additional
of §240.17f-l and the system designed classes of financial institutions or to
to carry out its provisions, the Com impose greater requirements on cer
mission determined that the lost and tain classes or subclasses oLJnstituThe Commission invites com
stolen securities program should be in tions. on
these issues and seeks assist
stituted initially on a pilot basis, ments
ance in identifying appropriate crite
through December 31, 1978. Further ria
for making such determinations.
more, the Commission determined
2.
-Securities
encompassed
by
that it would be appropriate to desig §240.4Zf-4.
section 17(f)(1)
nate another person, as provided for in of the act Although
applies to ail securities,
the statute, to receive and process the under § 240.17f-l,
securities issues for
reports and inquiries for which the which CUSIP numbers
not been
Commission is the appropriate instru assigned are exempted have
from the re
mentality, as defined by the section* porting and inquiry provisions
of the
at least for purposes of the pilot pro
Comments are requested
gram. Accordingly, the Commission so program.
concerning the appropriateness of this
licited pians from persons interested - exemption,
its permanent incorpora
in acting as the Commission's desig tion into the
and whether
nee, and, after analysis of the submis other types of section,
securities
should be
sions, designated the Securities Infor exempted.
mation Center, Inc. ("SIC") to act on 3. Appropriate /nsfrumenfcZifies.
its behalf * through the pilot year Section 240.17f-l specifies that reports
ending December 31, 1978.
and inquiries shall be made to the "ap
propriate instrumentality." For securi
ties issued by the U.S. Government, an
Inasmuch as the pilot year and SIC's agency or instrumentality of the U.S.
term of designation will expire on De Government, the International Bank
cember 31, 1978, the Commission solic for Reconstruction and Development,
its public comment at this time on the the Inter-American Bank, or the Asian
provisions of § 240.17f-l, the operation Development Bank, the appropriate
of the program to date, and on the instrumentality is any Federal Reserve
question whether it would be appro Bank or B ran ch.F or reports and in
priate for the Commission to redesig quiries regarding all other securities,
nate SIC to receive and process re the appropriate instrumentality is the
ports and inquiries made pursuant to Commission or its designee. This bifur
cation of the responsibility for the
the section.
processing of reports and* inquiries re
To focus the attention of public sulted,
in part, from the desire to take
commentators, those aspects of the advantage
of the information con
program which are of particular con tained on the
Reserve Banks'
cern to the Commission are outlined "Checklist of Federal
Lost or Stolen Securi
below. Public comment relative to ties." At the time
of the enactment of
these issues will assist in the formula
17(f) of the act, this manually
tion of appropriate amendments to section
accessed checklist had been used by
the section.
member banks of the Federal Reserve
1. /nsfi^nfiOTLS SM&jecf fo § 240.4
for nearly 6 years. "
The financial institutions required to System
Information is requested from inter
make reports and inquiries with re ested
members of the public as to
spect to missing,'lost, counterfeit, or
the framework of dual appro
stolen securities pursuant to § 240.17f- whether
priate
instrumentalities
provided by
1 include nearly 20,000 institutions
section is appropriate or whether a
and a broad variety of securities and the
data base would be
banking entites.' Preliminary research unified central
In addition, comments as
suggests that it may be appropriate to preferable.
to any difficulties experienced due to
exempt from the operation of the sec the
concept or operation of the two
tion certain classes or subclasses of appropriate
instrumentalities are hathese institutions or to limit the appli vited.
With respect to corporate and mu
'Under §240.17f-l. reports and inquiries
nicipal securities, the Commission deS O L IC IT A T IO N O F P U B L IC C O M M E N T S
are directed to the "appropriate instrumen
tality." In the case of UJS. Government se
curities. the appropriate instrumentality is
any Federal Reserve Bank or branch there
of. The Commission is the appropriate in
strumentality for all other securities, in
cluding State and municipal issues.
'Securities Exchange Act Release No.
13538. 42 FR 26495 (May 24, 1977). AutEx.
Inc. was originally named as the designee.
Subsequently, as a result of the acquisition
of AutEx by ITEL Corp.. SIC was created as
a wholly owned subsidiary of ITEL Corp.
note 4, ixpra.
termined to exercise its authority tc
designate another entity to process re
ports and inquiries. As stated earlier
SIC's term as the Commission's desig
nee expires on December 31, 1978. The
Commission must, therefore, eithei
designate SIC for another specifiec
period of time or designate anothei
entity to receive and process the re
ports and inquiries made pursuant tc
the section. While the staff's experi
ence with SIC has been positive anc
unofficial comments from industry
sources have been favorable, the Com
mission, in conformity with concepts
of fairness, solicits submissions from
other persons interested in serving as
the Commission's designee.'*
In formulating submissions to the
Commissison; prospective designees
should consider carefully the "Criteria
for a Lost and Stolen Securities Re
porting and Inquiry System" set forth
in the Appendix, and should detail the
manner in which their proposed
system would operate, and include an
estimate of the costs for establishment
and operation of such a system and a
plan for allocation of such costs.
Additionally, in order to assist the
Commission in its evaluation of SIC
and its processing system, and to aid
in the formulation of system improve
ments, comments are invited from in
terested persons concerning their ex
perience in working with SIC, their
suggestions for modifications of the
design and operation of its system, and
the appropriate number of years for
which a designation should be made.
4. ReporfiTty requirement Section
240.17f-l provides that all institutions
subject to its provisions shall report
the discovery of the loss of any securi
ty to the appropriate instrumentality
and to a registered transfer agent for
the issue. A report to the appropriate
law enforcement agency is also re
quired in cases of suspected criminal
ity. The section sets forth differing
time requirements within which such
reports shall be made, depending on
the type of loss involved and the cir
cumstances involved in the loss. '* The
attention of commentators is directed
towards the appropriateness of these
time requirements and the possibility
that other circumstances exist that
might make desirable the inclusion in
the section of new time frames appli
cable to such circumstances.
All reports of loss are required to be
made on Commission Form X-17F-1A.
The Commission solicits suggestions
" Section 240.17f-l(a)(2Xl).
"During the drafting stages of rule 17f-l, regarding appropriate modifications in
the Federal Reserve Banks offered to serve
as an appropriate instrumentality on a "Section 17(f)(1)(A) of the act does not
"temporary" basis in order to facilitate in- require that a designation be made but pro
plementation of section 17(f). At that time, vides that reports and inquiries shall be
it was understood that the Federal Reserve made to the Commission or other person
Bank would not be held to a permanent designated by the Commission.
commitment but would consider at a later "For example, if there is a substantial
date whether it was desirable to continue to belief that criminality is involved in the
play such an active role in the Commission's loss, the report must be made one day after
program.
discovery. Section 240.17f-l(b)(l)(i).
FEDERAL RECtSTER, VOL 43, NO. 152—MONDAY, AUGUST 7, 1973
34791
34792
P R O P O S E D R U LE S
the format and graphics of the form, est potential losses. Comments are also terested persons are solicited as to
as well as the information required to invited as to whether the exemption whether the direct/indirect inquirer
be submitted on the form, in order to amount should vary, depending on the status option has achieved its purpose
facilitate its use, make it more infor nature of the security involved. Final of making the benefits of the program
mative, and encourage its use by the ly, comments regarding the appropri available to all institutions subject to
transfer agent community as a "uni ateness of additional exemptions from section 17(f)(1) of the act, while mini
form stop transfer order form." Com required inquiry, on either a provision mizing their costs and, in addition,
ments are also requested as to wheth al or a permanent basis, are solicited." whether this billing system, which is
er copies of the reporting form, Form F. Rustem design. and /ee structure. based on the size of the institution,
X-17F-1A, should be sent to other en The SIC processing system provides has proven just and workable and, if
for two levels of user access with re not, what alternatives should be con
tities."
5. /uauiry requirements. Section spect to inquiries. A reporting institu sidered.
240.17f-l requires reporting institu tion must choose to be either a "direct
tions to make inquiry whenever securi inquirer" or an "indirect inquirer" at
ties come into their possession or the time of its registration in the Pro
keeping unless an exemption applies. gram. Direct inquiries have the ability Since the implementation of the
The section does not specify the time to access the data base directly while program, the staff of the Commission
at which such inquiries must be made. indirect inquirers must process their has issued several interpretations and
It is expected, however, that a report inquiries through a direct inquirer.
no action letters concerning various
ing institution will make inquiry prior This scheme of classification for par provisions of § 240.1?f-l. In this
to giving value, particularly if the se ticipation was created with a view to regard, the Commission solicits com
curities or circumstances appear to be wards minimizing the monetary and ment as to whether they should be
suspicious, in order to verify that the administrative costs of the program. provisionally or permanently incorpo
securities have not been reported as This interest also guided the Commis rated into the section. Several of the
missing, lost, counterfeit or stolen. sion in its formulation of the pricing specific areas addressed are summa
Comments are welcome as to whether schedule for reporting institutions." rized as follows;
amendment of the section to require Usage fees are based on the aggregate
inquiry within certain specified time volume of items processed by SIC and
periods would be desirable and, if so, are apportioned among the direct in 1. Warrants. The staff declined a re
the appropriate lengths of such time quirers according to classifications quest that warrant cards, representing
based on size.** This billing structure rights, be exempted from the report
periods.
Presently, the section provides that was deemed to be preferable to a "per ing provisions of § 240.17f-l. The ratio
a reporting institution need not in item" or a "flat fee" system because it nale for this position is that although
quire if the security is received: (1) Di would avoid any disincentive to individual rights are generally of mini
rectly from the issuer or issuing agent making permissive inquiries of the mal value, the number of rights repre
at issuance; (2) from another reporting system and would allocate the costs of sented by a warrant card is correlated
institution or a Federal Reserve Bank the program in a reasonable manner. to the number of shares a stockholder
in its capacity as fiscal agent; or (3) Under this scheme, the smallest insti owns and, thus aggregated, can have a
from a customer of the reporting insti tutional classifications of direct inquir considerable value.**
tution and is registered in the name of ers have been charged $23.75 over the
2. Tosses durinp completion o/ defin
such customer or its nominee. *" in ad first two quarters of the pilot year ery, deposit or uutbdraioaf. With,
dition, for the purposes of the pilot without any limitation on the number regard to subsections (b)(2)(ii)(B) and
program only, certain additional ex of reports and inquiries submitted.
(b)(2)(iii)(C) of the section, regarding
emptions from inquiry are available: In formulating the pricing schedule, the time and party to report a loss
Corporate and municipal security the Commission attempted to mini when securities are delivered "over the
issues not assigned CUSIP numbers " mize the fees applicable to smaller in window," the staff published an inter
and receipts involving securities of stitutions in the expectation that they pretation stating that copies of deliv
$10,000 or less are exempt, as are in would choose direct inquirer status. ery bills, stamped by receiving institu
quiries by registered transfer agents." Such has not been the case; only one tions "Received Subject to Count and
Specific comments are solicited as to half of the originally estimated Examination" and returned to deliver
the desirability of continuing or incor number of direct inquirers actually ing institutions, are "receipts" under
porating permanently into § 240.17f-l elected this status. Comments from in- the section and thereby create an obli
these special exemptions. With respect
gation on the part of the receiving in
to the 810,000 de minimus exemption "F o r example, it has been informally sug stitution to report any losses to the
from inquiry, comments are sought gested to the staff that inquiry should not appropriate instrumentality. ^
concerning whether the exemption be
3. Timely submission o/ report. Due
required in the case of bearer securities
amount should be lowered to bring a where the institution taking such securities to the difficulties certain institutions
greater number of transactions into into its possession sold such securities to the have faced in researching the data re
person delivering them and proof o f pur
the scope of the inquiry provisions, or chase
quired to be submitted in the report of
is offered.
whether it should be raised, to focus "D irect
loss, the staff has published interpre
inquirer?
shoulder
the
costs
of
on those transactions with the great the system. Indirect inquirers are charged tations of the reporting requirements
of the section stating that in instances
no fees by SIC but, rather, are subject to
where no criminal activity is suspected
whatever fees they agree to pay their direct
" I t has been informally suggested to the
a report must be made under subpara
inquirer. One benefit of this approach is
staff that the designated examining author
that it significantly alleviates problems re
ity of a broker-dealer should receive a copy
graph (b)(2) of the section as soon as
lating to the frequent collection of small
of the form in order to better assist them in
the reporting institution has available
bills from large numbers of persons, a prob
their monitoring of the activities of their
to
it the CUSIP and certificate
lem which the Securities Investors Protec
members.
R E Q U E S T F O R C O M M E N T S R E G A R D IN G
S T A F F IN T E R P R E T A T IO N S O F * 2 4 0 . 1 7 f - l
R E P O R T IN G P R O V I S I O N S
Section 240.17f-l(c)(l)(i)-(iii).
"Consequently, short term securities such
as commercial paper are not subject to the
requirements of §240.17f-l during the pilot
program.
"g e e Securities Exchange Act Release No.
13832, 42 FR 41024 (Aug. 12. 1977).
tion Corp. has experienced to a great extent
in its collection of assessment fees.
3°Billing classifications are based on the
amount of deposits for banks, annual reve
nue fer securities organizations, and
number of shares issued in the case of non
bank transfer agents.
*'Letter to Morgan Guaranty Trust Co.,
dated Mar. 13, 1978 (public availability date
Apr. 13.1978).
^Letter to Northwestern Trust Co., dated
Feb. 28, 1978 (public availability date Mar.
29,1978).
FEDERAL REGBTER, V O L 43, NO. 152— MONDAY, AUGUST 7, 1978
34793
PROPOSED RULES
number of the security, provided, how gram, inquiry is not required in the taming to the items enumerated
ever, that the institution acts in good case of transactions involving securi below. In responding, all commenta
faith in promptly researching this ties of less than $10,000 (face value in tors should attempt to furnish the
data. This extension of time is not the case of bonds and market value in Commission with data supporting
available, however, where the circum the case of stocks). The staff of the their views to the greatest extent pos
stances surrounding the loss suggest Commission, however, has interpreted sible.
this exemption to include securities up
possible criminal activity.
1. Whether any classes or subclasses
4. Repori ?o Lem ETphrcement. Sub- to and including $10,000 exactly, in of institutions defined as "reporting
paragraph (b)(ii) of § 240.17f-l pro recognition of the fact that most debt institutions" under § 240.17f-l should
vides that ail reporting institutions securities are issued in $5,000 face be exempted from the provisions of
shall promptly report to the appropri value denominations, and in the inter the section and whether any class or
ate law enforcement agency upon the est of reducing the burden imposed by subclass of institution within the juris
discovery of the theft or loss of any se the section on municipal securities diction of the Commission not now
curity where there is a substantial brokers and dealers, In addition, the subject to the section should be in
basis for believing that criminal activi staff has interpreted thi3 exemption cluded in the program;
ty was involved. To clarify those in to apply not to the individual certifi 2. Whether the present exemption
involved in a transaction, hut from the program of securities of an
stances where such reports should be cates
to the transactions as a whole.-* issue not assigned a CUSIP Number
submitted to law enforcement, the rather
4. Transfer ayeni exemption. For the should
staff issued an interpretation stating purposes
and whether other
of the pilot program, regis types ofcontinue
that an institution does not necessar tered transfer
agents are exempted exempted; securities should also be
ily have a "substantial basis" for such from
§ 240.17f-l's requirements that
a belief in those instances where the reporting
Whether the present framework
institutions inquire with re of3.dual
instituticn'3 knowledge of the loss or spect
appropriate instrumentalities
to
securities
coming
into
their
theft is based on unsubstantiated in possession or keeping. The staff of the is appropriate
whether a unified
formation given to it by another Commission has interpreted this ex central data baseorwould
be preferable,
party. 3*
and. particularly, whether the concept
emption to be applicable to a transfer or
operation cf the two appropriate in
agent engaged as an exchange, conver strumentalities
has resulted in any dif
sion,
or
redemption
agent
or
deposi
1. Fre^nphon upon receipt /ro m cn- tory or render agent (whether such ficulties in complying with the section;
ofncr reporii7i(7 in-stifi/fion. In an in transfer agent is acting as the issuer's 4. Whether the Commission should
terpretative letter, the staff expressed
SIC or designate another
agent or as a depository or redesignate
the opinion that the exemption from transfer
entity for the purposes of receiving
tender
agent
in
connection
with
a
soinquiry available upon receipt of secu called "unfriendly tender offer"), as and processing reports and inquiries
rities from another reporting institu
pursuant to the section.3°
as such transfer agent maintains made
tion is also available in those instances long
5. Whether the time requirements
or
is
provided
with
current
and
accu
where the delivering institution is af rate records of stop transfer instruc within which reports must now be
filiated with and under the common
are appropriate and whether
and inquiry of such records is made
control of a reporting institution and tions
other circumstances exist for which
made
for
each
item
received
prior
to
acts solely as a "certificate drop." ^
issuing a new certificate, transferring specific time requirements should be
2. FrcmptioTt upon recc'pf /ropt a record ownership, disbursing funds, or provided;
Federal Reserve BanR; Under otherwise completing the transac 6. Whether the report form. Form
§ 240.17f-l(c)(i). inquiry is not re tion.^ /
X-17F-1A, "should be modified in
quired in instances where a reporting
terms of its format and graphics and
institution receives securities from a
in
terms of the information required,
Federal Reserve Bank in its capacity
whether the form has proven
as fiscal agent. This exemption is not Inasmuch as the pilot year and SIC's and
useful
to identify and trace missing,
available under the section, therefore, term of designation expire on Decem lost, counterfeit
and stolen securities;
when securities are delivered by the ber 31, 1973, the Commission solicits 7. Whether inquiries
should be made
Federal Reserve Bank from a safe public comment at this time on the within certain time periods
keeping account. The staff has issued provisions and operation to date of within what time periods; and. if so,
an interpretation providing that when § 240.17f-l, on the appropriateness of 3. Whether the exemptions from in
securities are delivered to a reporting the
quiry provided for the purposes of the
applicability of the spe pilot
institution by the Federal Reserve cial continued
program should be continued,
pilot
program
exemptions,
and
the
Bank out of the safekeeping account redesignation of SIC to receive and continued in a modified form, or al
of another reporting institution and process
to lapse, and, particularly,
and inquiries made lowed
such securities had been delivered to pursuantreports
whether
the present de minimus ex
to
the
section.
In
particular,
the Federal Reserve Bank by a report the Commission solicits comments per- emption for
transactions involving se
ing institution, inquiry is not re
curities of $10,000 or less (face value in
quired.-*
case of bonds and market value in
3. T7ie ^10,0(7# de mmiunis exemp *-Letter to Federal Reserve Bank of St. the
the
case of stocks) should be in
Louis, dated Jan. 12, 1978 ipublic availabil
tion. In order to ease implementation ity
creased,
decreased, made a permanent
date
Feb.
12,
1978).
Although
the
ratio
of §210.17f-l during the phot pro nale was based on the situation presented part of the
rule, or allowed to lapse;
9. Whether additional exemptions
by debt security transactions, in order to
from inquiry should be permitted on
avoid confusion the interpretation was de
-3Letter to First Trust Co. of St. Paul,
either a provisional or permanent
signed to apply to equity securities as well.
dated Mar. 20. 1973 (public availability date
basis;
3*For example, where four $5,COO bonds
Apr. 20. 1973).
are used as collateral for a single lean, the
3*Letter to Continental Stock Transfer &
Whether the present program allow
total transaction exceeds $10,000, and the
Trust Co., dated Jan. 12. 1078 (public avail
ing
for an election of participation
$
10,000
de
minimus
exemption
from
inquiry
ability date Feb. 12. 1978).
status as either a direct or an indirect
may not be claimed. See letter to LaSalle
*Letter to First National Bank of Boston,
IN Q U IR Y P R O V IS IO N S
R E Q U E S T F O R C O M M E N T S R E G A R D IN G P R O
V I S I O N S A N D O P E R A T IO N O F § 2 4 0 . 1 7 F - 1
3
dated Jan. 12. 1973 (public availability date
Feb 12. 1973).
3" Letter to Bankers Trust Co., dated Mar.
21, 1978 (public availability date Apr. 21,
1973).
National Bank, dated Dec. 7. 1977 (public
availability date Jan. 7. 1978).
^Letter to the Stock Transfer Associ
ation, dated Mar. 8, 1978 (public availability
date Apr. 8, 1978).
=*Persons interested in acting as the Com
mission's designee should submit a plan for
their program in accordance with the
instructions outlined in Appendix A.
FEDERAL REG:S7EX, VOL 43, NO. 152—MONDAY, AUGUST 7, 1973
@FedFRASER