S E C U R I T I E S A N D EXCHANGE COMMISSION

UNITED STATES

S E C U R I T I E S A N D EXCHANGE COMMISSION

WASHINGTON, D.C.

20549

DIVISION OF

TRADING AND MARKETS

August 13,2008

Mr. Stephen V.R. Whitman

Senior Vice President and General Counsel

SS&C Technologies, Inc.

80 Lamberton Road

Windsor, CT 06095

Re:

Request for No-Action Relief from Rule lob-10 by SS&C Technologies, Inc.

Dear Mr. Whitman:

In your letter dated July 25,2008, on behalf of SS&C Technologies, Inc.

("SS&CV),you request no-action relief fiom the staff of the Division of Trading and

Markets ("Staff ') to permit Dealer Subscribers (as that term is defined in your letter) that

use the SSCNet system to provide an electronic trade confirmation service to users of

SSCNet ("System Users"). Specifically, you seek assurance that the Staff would not

recommend enforcement action to the Commission against Dealer Subscribers that

provide confirmations through SSCNet to System Users who are their customers for

purposes of Rule lob-10 under the Securities Exchange Act of 1934 to satisfy their

obligations under Rule lob-10.'

Response:

On the basis of the facts and representations contained in your letter, the Staff will

not recommend enforcement action to the Commission under Rule lob-10 against Dealer

Subscribers that deliver confirmations through SSCNet to System Users that are

customers for purposes of Rule lob- 1o2 to satisfy their obligations under Rule lob-10 for

transactions. In granting this relief, we note in particular that each electronic trade

confirmation will include all of the information required by Rule 1Ob-10 for securities

1

You seek relief for transactions between Dealer Subscribers and System Users that are placed,

executed, or facilitated outside of SSCNet. Accordingly, any confirmation would be based on transaction

information that is input into SSCNet by Dealer Subscribers.

2

The limitation of t h ~ relief

s

to System Users that are customers for purposes of Rule lob-10 is

consistent with the relief granted in previous no-action letters, which apply only to users of the requesters'

respective electronic trade c o n f i t i o n systems that are also customers for purposes of Rule lob-10. See

SunGard Institutional Brokerage Inc. (July 3,2007); TradeWeb LLC (July 22,2003).

Mr. Stephen V.R. Whitman

August 13,2008

Page 2

transactions. We also note that all System Users are institutions. Finally, we note that the

use of SSCNet to provide electronic trade confirmations to customers to satis6 Rule

lob-10 is limited to those System Users who also use SSCNet to exchange post-trade

settlement notifications.

Any different facts or representations may require a different conclusion. This is a

staff position regarding enforcement action under Rule lob-10 only, and does not express

any legal conclusions regarding the applicability of Rule lob- 10 or any other federal or

state laws or the applicability of self-regulatory organization rules.

Finally, we note that your letter requesting no-action relief bore a legend

requesting confidential treatment pursuant to 17 C.F.R. 5 200.83. We have confirmed

with your counsel that this request for confidential treatment was intended to apply only

during the period of the pendency of the no-action request, and that you did not intend to

request that the no-action request be kept non-public for up to 120 days as provided in 17

C.F.R. 8 200.81. Accordingly, this letter will be made publicly available immediately.

Sincerely,

Paula R. ~ e n s o i

Deputy Chief Counsel

Confidential Treatment Requested by

Wilmer Cutler Pickering Hale and Dorr LLP

Pursuant to 17 C.F.R. 5 200.83

Voluntarily Submitted

SS&C 0000025

July 25,2008

CHICAGO

DENVER

MINNEAPOLIS

NEW YORK

Mr. James Brigagliano

Acting Chief Counsel

Division of Trading and Markets

Securities and Exchange Commission

100 F St., NE

Washington, DC 20549

S A N FRANCISCO

Re:

Electronic Trade Confirmation Service

SKILLMAN, N J

Dear Mr. Brigagliano:

WINDSOR, CT

SS&C Technologies, Inc. ("SS&CV) proposes to permit United States

registered broker-dealers that use SSCNet ("Dealer Subscribers") to provide

For

INTERNATIONAL:electronic trade confirmations to users of SSCNet ("System Users").

purposes of complying with Rule lob-10 under the Securities Exchange Act of

AMSTERDAM

1934 ("Exchange Act"), SS&C writes to seek assurance that the Staff of the

Division of Trading and Markets will not recommend any enforcement action to

CURACAO

the Securities and Exchange Commission ("Commission") against SS&C or

Dealer Subscribers that provide electronic trade confirmations generated by and

DUBLIN

delivered through SSCNet to System Users that are customers to satisfy their

KUALA LUMPUR

obligations pursuant to Rule lob-10.

LONDON

I.

MONTR~AL

SYDNEY

T~~~

T~~~~~~

Description of the SSCNet System

SS&C is the principal operating company of the group of SS&C

Technologies companies including SS&C Technologies Canada Corp., which

operates SSCNet. SSCNet is a post-trade automation system through which

System Users, which are institutional investors, can exchange post-trade

settlement notifications.' Currently, Dealer Subscribers and System Users may

transmit notices of execution, allocations, confirmations, and settlement advice

.~

is available only to System Users that meet certain

through S S C N ~ ~SSCNet

financial and other criteria separately determined by each Dealer Subscriber, and

the identity of the System User is fully disclosed to the Dealer Subscriber on

SSCNet. A System User must enter into customer agreements with each Dealer

Subscriber that enables the System User to transmit notices through SSCNet with

1

At this time, SSCNet plans to offer the proposed electronic confiiation functionality for securities

transactions settling outside the facilities of the Depository Trust Company ("DTC") andlor its affiliate clearing

agencies. Should it seek to offer this functionality for "depository eligible" transactions, it would obtain the

appropriate registration as a clearing agency or an exemption from such registration.

2

SS&C and SS&C Technologies Canada Corp. are not themselves engaged in the business of effecting

transactions in securities for the account of others or for their own accounts. Executions, as such, occur outside

SSCNet.

SS&G

T E C H N O L O G I E IS

N ,C .

M A I N : 800-234-0556

.

.

80 L A M B E R T O N ROAD, W I N D S O R , C T 0 6 0 9 5

.

800-234-4500

EMAIL: SOLUTION@SSCINC.COM

F A X : 860-298-4900

WEB SITE: WWW.SSCTECH.COM

Confidential Treatment Requested by

Wilmer Cutler Pickering Hale and Dorr LLP

Pursuant to 17 C.F.R. 8 200.83

Voluntarily Submitted

SS&C 0000026

Mr. James Brigagliano

Securities and Exchange Commission

July 25,2008

Page 2 of 5

that Dealer Subscriber. Each post-settlement notification transmitted through SSCNet

between a Dealer Subscriber and a System User is subject to the terms and conditions of the

customer agreement and other relevant documentation between the parties.

Dealer Subscribers and System Users are responsible for effecting transactions as well

as clearance and settlement using their own procedures separate and apart fiom SSCNet.

System Users acting for multiple client accounts may allocate a transaction among those

client accounts by transmitting relevant allocation information to the Dealer Subscriber via

SSCNet. The Dealer Subscriber confirms to the System User, through SSCNet, the receipt

and processing of all allocation information. At no time does SSCNet act as counterparty, or

take title to or otherwise handle funds or securities or participate in the settlement process

between the Dealer Subscriber and the System User.

11.

Proposed Electronic Confirmation Functionality

Rule lob-10 requires, among other things, that a trade confirmation be sent to each

customer at or before completion of a securities tran~action.~

Currently, Dealer Subscribers

using SSCNet satisfy their confirmation obligations under Rule lob-10 by sending

confirmations to System Users by means other than through SSCNet. SS&C proposes to

offer an electronic confirmation generation functionality through SSCNet to Dealer

~ubscribers.~

This functionality would permit Dealer Subscribers and System Users to use

SSCNet for electronic confirmation generation for transactions, all of which are placed,

executed, or facilitated outside of SSCNet. The confirmation would be based on transaction

information that is entered into SSCNet by the Dealer Subscriber. SSCNet will allow Dealer

Subscribers to provide the confirmation electronically through SSCNet to the System User's

SSCNet secure electronic mailbox. Where the customer to whom a Dealer Subscriber is

obligated to send a confirmation is not a System User, the Dealer Subscriber will retain the

responsibility to send confirmations to that customer.

3

Where a customer account is managed by a fiduciary of the customer, the Commission has required that

the customer, rather than the fiduciary, be given a confirmation, except in limited circumstances. See, e.g.,

Securities Exch. Act Rel. No. 34962 (Nov. 10,1994), 59 FR 59612 (Nov. 17,2004).

4

The Commission previously has permitted broker-dealers to provide notice to institutional customers

that a confirmation has been made available for access by the broker-dealer and may be viewed by the customer

over an electronic system in which the broker-dealer and the customer were both participants. See, SunGard

Institutional Brokerage Inc., SEC No-Action Letter, 2007 SEC No-Act. LEXIS 516 (July 3, 2007)("SunGard

Letter"); TradeWeb LLC, SEC No-Action Letter, 2003 SEC No-Act. LEXIS 656 (July 22, 2003)rTradeWeb

Letter").

SS&C

T E C H N O L O G I E S , INC.

80 LAMBERTON

MAIN: 800-234-0556

800-234-4560

EMAIL: SOLUTION@SSCINC.COM

.

.

ROAD, W I N D S O R , CT 06095

FAX: 860-298-4900

WEB SITE: WWW.SSCTECH.COM

Confidential Treatment Requested by

Wilmer Cutler Pickering Hale and Dorr LLP

Pursuant to 17 C.F.R. $200.83

Voluntarily Submitted

SS&C 0000027

Mr. James Brigagliano

Securities and Exchange Commission

July 25,2008

Page 3 of 5

111.

The Proposed Confirmation Service

SS&C proposes to offer electronic confirmation generation and provision to System

Users through SSCNet for Dealer Subscribers to satisfy the requirements of Rule lob-10, and

in accordance with the following guidelines:

Each confirmation provided through SSCNet's electronic confirmation functionality

1.

will include all of the information required under Rule lob-10. This information will be

provided to SSCNet by the Dealer Subscriber. SSCNet will accept and incorporate terms and

conditions relating specifically to the Dealer Subscriber that would not change on a trade-bytrade basis, and

will accept information required by Rule lob-10 on a trade-by-trade basis from a Dealer

Subscriber (either manually or electronically). SSCNet also will permit Dealer Subscribers to

include additional disclosures as they deem necessary on the electronic confiiation,

including disclosures not specifically required under Rule lob- 10.

All information normally appearing on the back of a paper confirmation, including any

additional disclosures not required under Rule lob-10 that a Dealer Subscriber wishes to

provide, will be provided with each electronic confirmation. Confirmations will be provided

in a single, contiguous form regardless of the manner in which they are provided.

2.

The confirmation would indicate that the System User should contact the Dealer

3.

Subscriber with whom it effected a transaction with any questions, and that SS&C will not

answer any questions or otherwise become involved in post-transaction discussions between

System Users and Dealer Subscribers, although the Dealer Subscriber and System User may

elect to use DK ("don't know") messaging facilities provided by S S C N ~ ~ . ~

System Users and Dealer Subscribers will have the ability to view, download, and

4.

print their confirmations through SSCNet, and will be able to establish default procedures

pursuant to which such confirmations are downloaded andfor printed automatically.

Confirmations will be stored electronically by SSCNet and be available to Dealer Subscribers

for not less than the period required by Rules 17a-3 and 17a-4 under the Exchange Act.

5

The DK facility allows either System Users or Dealer Subscribers to reject an inappropriate

contirmation and attach industry accepted reason codes as documented by the FIX community: unknown

symbol, wrong side, quantity exceeds order, no matching order, price exceeds limit, calculation difference, and

other. A free format comment section within the DK message is also available. All "DKYed"transactions are

flagged as such, and as with all message events, have a complete audit trail history attached.

.

S S & C T E C H N O L O G I E S , I N C . 80 LAMBERTON

R O A D , W I N D S O R , CT 06095

MAIN: 800-234-0556 a 800-234-4500 FAX: 860-298-4900

EMAIL: SOLUTION@SSCINC.COM

.

WEB SITE: WWW.SSCTECH.COM

Confidential Treatment Requested by

Wilmer Cutler Pickering Hale and Dorr LLP

Pursuant to 17 C.F.R. 5 200.83

Voluntarily Submitted

SS&C 0000028

Mr. James Brigagliano

Securities and Exchange Commission

July 25,2008

Page 4 of 5

SS&C will require all System Users to consent in writing to a Dealer Subscriber's

5.

provision of electronic confirmations through SSCNet.

The use of SSCNet to provide electronic trade confirmations to customers to satisfy

6.

Rule lob-10 is limited to those System Users that also use SSCNet to exchange post-trade

settlement notifications.

IV.

Analysis of the Proposed Confirmation Service

SS&C believes that the relief it is requesting concerning the delivery of electronic

confirmations is substantially similar to relief previously granted by the Commission

and that it does not present any novel issue concerning the preparation and provision of

confirmations on behalf of broker-dealers by the electronic data processing systems they

utilize. SSCNet will provide significant advantages to Dealer Subscribers and System Users

of SSCNet because. they will have ready access to confirmations and confirmation

information, Dealer Subscribers will be able to provide that confirmation through SSCNet

immediately after execution of a transaction, and System Users will be able to view, print,

download, and electronically store copies and of all confirmations.

Currently, SSCNet maintains detailed electronic records of data entry and notices of

execution, allocations, confirmations, and settlement advice facilitated by SSCNet. Also,

SS&C will retain electronic records of confirmations in accordance with the recordkeeping

requirements applicable to registered broker-dealers. Such records will be available for

inspection by the Commission.

In addition, SS&C has in place and would continue to implement adequate safeguards

to minimize the risk that any SSCNet failure would interfere with the prompt delivery of

confirmations. In particular, SSCNet would have sufficient capacity to handle the volume of

confirmations reasonably anticipated. SS&C currently tests SSCNet regularly to ensure

adequate capacity and response times and to minimize the risk of any SSCNet failures. SS&C

also has backup facilities and disaster recovery protocols to ensure continuity of service if its

primary facilities become inoperable. Moreover, SSCNet's standard security procedures

permit only authorized Dealer Subscribers, System Users, and where appropriate, certain

authorized SS&C personnel to obtain access to SSCNet. These procedures are reasonably

designed to maintain the proper functioning of SSCNet (e.g., by protecting SSCNetYs

operational integrity fiom computer viruses or other similar threats) and the integrity of data

submitted to and maintained on SSCNet.

6

See, e.g., SunGard Letter; TradeWeb Letter. CJ:Omgeo LLC, SEC No-Action Letter, CCH WSB File

No. 0310200820 (Mar. 12,2008); Omgeo LLC, SEC No-Action Letter, CCH WSB File No. 0108200701 (Dec.

14,2006); Depository Trust Co., SEC No-Action Letter, CCH WSB File No. 0204200221 (Apr. 17,2001).

S S & C TECHNOLOGIES,

INC.

MAIN: 600-234-0556

.

SO LAMBERTON

ROAD, WINDSOR,

.

600-234-4500

EMAIL: SOLUTION@SSCINC.COM

CT 06095

FAX: 660-296-4900

WEE SITE: WWW.SSCTECH.COM

Confidential Treatment Requested by

Wilmer Cutler Pickering Hale and Dorr LLP

Pursuant to 17 C.F.R. 5 200.83

Voluntarily Submitted

SS&C 0000029

Mr. James Brigagliano

Securities and Exchange Commission

July 25,2008

Page 5 of 5

Dealer Subscribers using SSCNet to provide confirmations will improve substantially

the efficiency and reliability of confirmation generation and provision by eliminating the need

for a separate confirmation delivery system to satisfy Rule lob-10 obligations. SSCNet

would also provide a standardized format for the confirmation of transaction terms between

Dealer Subscribers and System Users. The elimination of back-office duplication and the

ability to use standardized communications would reduce trade errors and operational risk and

would increase the speed with which the settlement of trades can be processed. Also, these

benefits would be achieved with minimal incremental costs to Dealer Subscribers and System

Users that already have established the necessary linkages to SSCNet.

V.

Conclusion

Based on the foregoing, SS&C respectfully requests that the StafY of the Division of

Trading and Markets confirm that -it will not recommend any enforcement action to the

Commission if Dealer Subscribers rely on electronic confirmations generated and delivered to

System Users by SSCNet as described above to satisfy their obligations under Rule lob-10.

If you have any comments or questions, please do not hesitate to contact me at 860.298.4832.

Sincerely,

1

stedhen V.R. Whitman

Senior Vice President and General Counsel

SS&C Technologies, Inc.

cc:

Erik R. Sirri, Director, Division of Trading and Markets, SEC

Robert L.D. Colby, Deputy Director, Division of Trading and Markets, SEC

Jerry Carpenter, Assistant Director, Division of Trading and Markets, SEC

Paula Jenson, Deputy Chief Counsel, Division of Trading and Markets, SEC

Brian Bussey, Assistant Chief Counsel, Division of Trading and Markets, SEC

Michael L. Milone, Special Counsel, Division of Trading and Markets, SEC

Darren Vieira, Attorney Advisor, Division of Trading and Markets, SEC

Alex Marasco, Senior Vice President, SS&C Technologies, Inc.

Robert T. Shaw, Director, Electronic Trade Communication, SS&C Technologies, Inc.

Brandon Becker, WilmerHale

Cristie March, WilmerHale

S S&C

TECHNOLOGIES

I N,C .

MAIN: 800-234-0556

.

.

80 L A M B E R T O N ROAD, W I N D S O R , CT 0 6 0 9 5

.

800-234-4500

EMAIL: SOLUTION@SSCINC.COM

FAX: 860-298-4900

WEB SITE:WWW.SSCTECH.COM