On the eve before the hearing, and all thru the house...the government was cooking and baking a louse...
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6029
5599
DATE: MAY 16, 2005
TO: ALL PARTICIPANTS
ATTENTION: MANAGING PARTNER/OFFICER,
CHIEF EXECUTIVE OFFICER
CHIEF OPERATIONS OFFICER
OPERATIONS PARTNER/OFFICER
COMPLIANCE OFFICER
SUBJECT: RULE FILING APPROVAL – SR-NSCC-2004-09
On December 8, 2004, National Securities Clearing Corporation ("NSCC" or “the Corporation”) filed
and on May 9, 2005 the Securities and Exchange Commission ("SEC") approved rule filing SRNSCC-
2004-09, which consists of modifications to NSCC’s Rules and Procedures (the “Rules”) to
memorialize the Corporation’s current standard of care and limitation of liability.
The approved changes create a uniform standard limiting NSCC’s liability to direct losses caused by
NSCC’s gross negligence, willful misconduct, or violation of Federal securities laws for which there is
a private right of action. In addition, the changes: (a) memorialize an appropriate commercial
standard of care that will protect NSCC from undue liability; (b) permit the resources of NSCC to be
appropriately utilized for promoting the accurate clearance and settlement of securities; and (c) are
consistent with similar rules adopted by other self-regulatory organizations and approved by the
Commission.
Questions regarding SR-NSCC-2004-09 should be directed to Allison Finnegan, Senior Associate
Counsel, at (212) 855-3283, or to the undersigned at (212) 855-3203.
Karen L. Saperstein
Managing Director and General Counsel