Revised Transfer Agent Form and Related Rule

Federal RegisterMar 31, 1999

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SECURITIES AND EXCHANGE COMMISSION

17 CFR PARTS 240 and 249b

[Release No. 34-41204; File No. S7-11-99]

RIN 3235-AH44

Revised Transfer Agent Form and Related Rule

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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SUMMARY: The Securities and Exchange Commission (Commission) is

publishing for comment its proposal to amend Rule 17Ac2-2 and related

Form TA-2 and its proposal to rescind Rule 17a-24 under the Securities

Exchange Act of 1934. The amendment would make technical corrections

and provide greater clarity to Form TA-2. Accordingly, the amendments

are designed to clarify filing requirements and instructions; eliminate

or change ambiguous terms and phrases; delete certain redundant or

unnecessary questions; and add questions that would help the Commission

to more effectively monitor the transfer agent industry.

DATES: Comments are due on or before May 17, 1999.

ADDRESSES: Comments should be submitted in triplicate to Jonathan G.

[[Page 15311]]

Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street,

N.W., Washington, D.C. 20549-0609. Comments also may be submitted

electronically at the following E-mail address: [email protected].

All comment letters should refer to File No. S7-11-99; this file number

should be included on the subject line if E-mail is used. All comments

received will be available for public inspection and copying in the

Commission's Public Reference Room, 450 5th Street, N.W., Washington,

D.C. 20549. Electronically submitted comment letters will be posted on

the Commission's Internet Web site (http://www.sec.gov).

FOR FURTHER INFORMATION CONTACT: Jerry W. Carpenter, Assistant

Director, or Lori R. Bucci, Special Counsel, at 202/942-4187, Office of

Risk Management and Control, Division of Market Regulation, Securities

and Exchange Commission, Washington, D.C. 20549-1001.

Supplementary Information:

I. Introduction

Transfer agents play an essential role in the processing of

securities transactions and recordkeeping for securities issuers. The

Commission is reviewing the regulations that apply to transfer agents

to determine whether changes are necessary or appropriate. In this

release, we propose a variety of amendments to Form TA-2,\1\ the annual

reporting mechanism for all registered transfer agents.

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\1\ 17 CFR 249b.102.

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Form TA-2 has not been reviewed since it was adopted in 1986.\2\

Since that time, a variety of ambiguities and inconsistencies in the

form have come to light. Also, we believe that the quality of the data

obtained from transfer agents can be improved. It is essential that the

Commission receive accurate information that can be processed and

evaluated efficiently by our staff because there is no self-regulatory

organization for transfer agents, resulting in more direct oversight

responsibility for the Commission and the other appropriate regulatory

agencies (ARAs).\3\ The amendments proposed today are intended to

enhance our oversight capabilities.

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\2\ Securities Exchange Act Release No. 23084 (March 27, 1986),

51 FR 12124. Form TA-2 is referenced in 17 CFR 249b.102.

\3\ The term ``appropriate regulatory agency'' is defined in

Section 3(a)(34) of the Securities Exchange Act of 1934, 17 U.S.C.

78c(a)(34), and includes the Commission, the Board of Governors of

the Federal Reserve System, the Federal Deposit Insurance

Corporation, and the Office of the Comptroller of the Currency.

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A. Rule 17Ac2-2 and Form TA-2

In 1975, Congress enacted legislation for the regulation of the

securities processing industry.\4\ The legislation requires transfer

agents to register, and gives the ARAs the authority to develop

registration requirements. Every transfer agent that is subject to

registration must file a Form TA-1 with its ARA.\5\ Congress gave the

Commission broad rulemaking and enforcement authority over all transfer

agents \6\ although the bank regulatory agencies were given primary

responsibility for oversight of bank transfer agents.\7\

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\4\ Pub. L. 94-29 (June 4, 1975), known as the Securities Acts

Amendments of 1975. The securities processing industry refers to

both transfer agents and clearing agencies.

\5\ Section 17A(c)(2) of the Exchange Act. Form TA-1 is

referenced in 17 CFR 249b.100.

\6\ Section 17A(d)(3) of the Exchange Act.

\7\ Section 17A(d)(3)(A)(ii) of the Exchange Act.

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In 1986, the Commission adopted Rule 17Ac2-2, which requires all

registered transfer agents to file an annual report of their business

activities on Form TA-2.\8\ As part of the Commission's continuing

efforts to improve and simplify rules and forms, the Commission

proposes to amend Rule 17Ac2-2 and Form TA-2. The proposed amendments

would allow the Commission to obtain clearer and more comprehensive

information from transfer agents about their activities. Essentially,

the proposed amendments would:

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\8\ Securities Exchange Act Release No. 23084 (March 27, 1986),

51 FR 12124. Form TA-2 is referenced in 17 CFR 249b.102.

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elicit additional information regarding transfer agent

business activities, such as direct purchase and dividend reinvestment

plan accounts, buy-ins, and turnaround time for routine items;

request more useful lost securityholder information;

enhance service company information;

eliminate the filing exception;

clarify the filing requirements and instructions;

conform reporting periods;

delete unnecessary questions; and

make technical changes.

B. Lost Securityholders

To address the problem of lost securityholders,\9\ on October 1,

1997, the Commission adopted Rules 17Ad-17 and 17a-24.\10\ Rule 17Ad-17

requires transfer agents to conduct data base searches in an effort to

locate lost securityholders. Rule 17a-24 requires transfer agents to

submit on Form TA-2 aggregate data regarding the accounts of lost

securityholders.\11\ The purpose of Rule 17a-24 is to gather data to

assess the effectiveness of the search requirements of Rule 17Ad-17. As

a result of its continuing review of this problem, the Commission now

believes that it needs different information than that which is

required by Rule 17a-24 to assess the effectiveness of the search

requirements of Rule 17Ad-17. Therefore, the Commission is proposing to

require transfer agents to report on Form TA-2 specific information

about the results of the required data base searches for lost

securityholders and to rescind Rule 17a-24.

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\9\ Rule 17Ad-17 generally defines a ``lost securityholder'' as

a securityholder to whom an item of correspondence that was sent to

the securityholder at the address in the transfer agent's master

securityholder file has been returned as undeliverable. Securities

Exchange Act Release No. 39176 (October 1, 1997), 62 FR 52229.

``Master securityholder file'' is defined in Rule 17Ad-9(b) as the

official list of individual securityholder accounts.

\10\ Securities Exchange Act Release No. 39176 (October 1,

1997), 62 FR 52229. The Commission also adopted amendments to Rule

17Ad-7 incorporating the retention time periods for the records

relating to compliance with Rule 17Ad-17.

\11\ Rule 17a-24 requires registered transfer agents to report

the number of lost securityholder accounts as of June 30 of each

year and the percentage of total accounts represented by such lost

securityholder accounts. These figures are broken down by the length

of time the securityholder was classified as lost: one year or less;

three years or less; five years or less; or more than five years.

Rule 17a-24 also requires that transfer agents annually report

information on lost securityholder accounts that escheated to state

unclaimed property administrators.

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II. Proposed Changes

A. Rule 17Ac2-2

Rule 17Ac2-2 requires every transfer agent to file Form TA-2 with

the Commission by August 31 of each calendar year. The information

furnished on Form TA-2 assists the Commission in its transfer agent

oversight programs.

The Commission is proposing several modifications to Rule 17Ac2-2.

First, to clarify whether a transfer agent must file Form TA-2 if it

withdraws its registration during the filing period, Rule 17Ac2-2 would

be amended to require every transfer agent that is registered on June

30 to file Form TA-2 by August 31 of that calendar year.

Second, current Rule 17Ac2-2 provides that a registered transfer

agent is required to complete only Items 1 through 4 of Form TA-2 if

it: received fewer than 500 items for transfer and fewer than 500 items

for processing in the six months ending June 30, and did not maintain

master securityholder files for more than 1,000 individual

securityholder accounts as of June 30. The proposed amendment would

revise

[[Page 15312]]

this partial exception to the full filing requirement so that it

applies to a registered transfer agent that received fewer than 1,000

items for transfer and fewer than 1,000 items for processing in the

twelve months ending June 30 of the year for which the form is being

filed.\12\ Moving from a six month to a twelve month period would

conform this exception to the rule's twelve month reporting period and

would provide more complete records regarding the volume of items

transferred and processed during the entire reporting period.

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\12\ The master securityholder account element would not change.

A transfer agent with this level of activity would be required to

complet only Questions 1 through 5, 10, and 11 and the signature

section of Form TA-2.

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Third, Rule 17Ac2-2 currently requires the annual filing of Form

TA-2 by all registered transfer agents except named transfer agents

\13\ that engage a service company \14\ to perform all of their

transfer and processing functions.\15\ As a consequence, in processing

Form TA-2 filings, the Commission's staff frequently cannot determine

whether a transfer agent that did not file Form TA-2 is properly using

the exception or has simply neglected to file. To address this problem,

the proposed rule amendment would eliminate the exception.

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\13\ ``Named transfer agent'' is defined in Rule 17Ad-9(j) as

the registered transfer agent that is engaged by an issuer to

perform transfer agent functions for an issue of securities but has

engaged a service company to perform some or all of those functions.

17 CFR 240.17Ad-9(j).

\14\ ``Service company'' is defined in Rule 17Ad-9(k) as the

registered transfer agent engaged by a named transfer agent to

perform transfer agent functions for that named transfer agent. 17

CFR 240.17Ad-9(k).

\15\ 17 CFR 240.17Ac2-2.

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A named transfer agent that engages a service company to perform

all of its transfer and processing functions would be required to

complete only the first four questions and the signature section of

Form TA-2.\16\ Currently, Rule 17Ac2-2 requires a named transfer agent

that engages a service company to perform some but not all of its

transfer and processing functions to file a Form TA-2 and to enter zero

(0) for those questions that relate to functions performed by the

service company on behalf of the named transfer agent. This requirement

would not be changed by the proposed amendments. Therefore, as a result

of the proposed amendments every registered transfer agent would be

required to file a Form TA-2 annually.

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\16\ These questions on Form TA-2 would request basic

information such as the transfer agent's name, its use of a service

company, the name of its ARA, whether it filed any amendments to its

registration, and the number of items it received for transfer and

processing during the reporting period.

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B. Form TA-2

Current Form TA-2 contains questions regarding the volume and

nature of a transfer agent's business activities. The Commission

proposes to amend Form TA-2 to obtain more complete information

regarding service companies, the transfer agent's amendments to its

Form TA-1, direct purchase and dividend reinvestment plan accounts,

buy-ins,\17\ lost securityholders, and turnaround time for routine

items. The proposal also includes numerous technical and conforming

changes.

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\17\ Rule 17Ad-11(c)(2) generally requires that within ten

business days following the end of each calendar quarter, every

recordkeeping transfer agent shall report certain information when

the aggregate market value of all buy-ins executed pursuant to Rule

240.17Ad-10(g) during that calendar quarter exceeds $100,000. 17 CFR

240.17Ad-11(c)(2).

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1. Form TA-2 Instructions

Currently, the box at the top left corner of the first page

requests the month, day, and year of the filing period. This format

enables registrants to put in a date other than the required reporting

period. The box at the top left corner of every page of Form TA-2 would

be changed to ``For the reporting period ending June 30, YYYY.'' This

change would help ensure that the correct reporting period for which

Form TA-2 is being submitted is indicated.

For clarity and to ease filling out Form TA-2, the proposed form

would add definitions for the following terms to the form's

instructions: aged record difference, lost securityholder, named

transfer agent, outside registrar, record difference, reporting period,

and service company. These definitions are the same definitions

currently set forth in the existing transfer agent rules. In addition,

the proposal would revise the filing requirements to conform with the

amendments to Rule 17Ac2-2 discussed above.

Currently, in determining the number of investment company

securities for which they act as transfer agents, registrants are

instructed to count each prospectus as one issue. The Commission

believes that it is more informative to count investment company

securities by CUSIP numbers rather than by prospectuses. Therefore,

registrants would be instructed to count investment company securities

as one issue per CUSIP number.

2. Form TA-2 Questions

Revised Form TA-2 would contain a question asking if the registrant

has amended Form TA-1 as required by existing transfer agent rules.\18\

In addition, the revised Form TA-2 would request that the transfer

agent provide an explanation if it failed to file a required amendment

to its Form TA-1. Form TA-2 also would contain a new question asking

about the registrant's use of service companies. This information would

help the Commission to obtain more complete information about transfer

agents and their business activities.

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\18\ Transfer agents registered with the Commission are required

by Rule 17Ac2-1(c) to amend Form TA-1 or the SEC Supplements to Form

TA-1 within 60 calendar days following the date on which information

reported therein became inaccurate, incomplete, or misleading. 17

CFR 240.17Ac2-1(c). Federal bank regulators (FBRs) also require

their registrants to amend their Form TA-1 within 60 calendar days

following the date on which the reported information became

inaccurate, incomplete, or misleading. FBRs send copies of the

submitted filings to the Commission on behalf of their registrants.

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Throughout the form, the request for numbers with ``000s omitted''

or ``in millions--000,000s omitted'' would be deleted to prevent

confusion and to ease the staff's analysis. The amended Form TA-2 would

request the actual figures with no zeros omitted.

Currently, Form TA-2 requests transfer agents to report the number

of items received for transfer and processing during the six months

ending June 30. The proposal would amend this reporting period from six

months to twelve months ending June 30 in order to have a uniform

annual reporting period.

Currently, Form TA-2 elicits information regarding only the number

of issues for which dividend reinvestment plan services are provided.

However, the number of transfer agents providing direct purchase and

dividend reinvestment plan services and the number of direct purchase

and dividend reinvestment plan accounts have increased substantially in

recent years. Revised Form TA-2 would require that transfer agents

reflect direct purchase and dividend reinvestment plan accounts in the

total number of individual securityholder accounts maintained, and

separately state the number of individual securityholder direct

purchase and dividend reinvestment plan accounts.

Currently, Form TA-2 requests the percentage of individual

securityholder accounts maintained in six categories: corporate equity

securities, corporate debt securities, investment company securities,

limited partnership securities, municipal debt securities, and other

securities. Revised Form TA-2 would clarify the question by

[[Page 15313]]

renaming one of the six categories. The category of investment company

securities would be renamed as open-end investment company securities.

In addition, for purposes of clarification, the Form TA-2 instructions

would be amended to state that the corporate equity category would

include closed-end investment company securities.

Currently, Form TA-2 requires the transfer agent to determine the

number and type of securities issues for which it acted in various

transfer agent capacities.\19\ Form TA-2 directs the transfer agent to

combine corporate debt and equity into one category. In order that the

Commission have more precise information on a transfer agent's

operations, revised Form TA-2 would require the transfer agent to

report separately the number of corporate equity and corporate debt

securities issues for which it acted in a specified capacity.\20\

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\19\ The identified capacities are: (a) receives items for

transfer and maintains the master securityholder files; (b) receives

items for transfer but does not maintain the master securityholder

files; and (c) does not receive items for transfer but maintains the

master securityholder files.

\20\ The registrant would continue to report the number and type

of other securities issues for which it acts in the specified

transfer agent capacities.

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Where a change in transfer agents for an issuer has occurred,

current Form TA-2 requests information about the number and aggregate

market value of (1) securities record differences \21\ that the current

transfer agent received as an out of balance issue from the prior

transfer agent, and (2) securities record differences resulting from

the current transfer agent. The format of this section has been

confusing to many registrants. Therefore, because the Commission

believes that the current record difference information is the most

significant, the form would be revised to require reporting of the

current number and aggregate market value of securities differences

with no detail as to whether the securities differences occurred before

or after the change in transfer agents.

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\21\ ``Record difference,'' as defined in Rule 17Ad-9(g), occurs

when either (1) the total number of shares or total principal dollar

amount of securities in the master securityholder file does not

equal the number of shares or principal dollar amount in the control

book, or (2) the security transferred or redeemed contains

certificate detail different from the certificate detail currently

on the master securityholder file, which difference cannot be

immediately resolved.

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Revised Form TA-2 would add a question about the number of

quarterly reports that were filed and that should have been filed by

the registrant with its ARA during the reporting period pursuant to

Rule 127Ad-11(c)(2).\22\ The addition of this question to Form TA-2

should help the Commission monitor registered transfer agent over-

issuance and buy-in activities.

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\22\ 17 CFR 240.17Ad-11(c)(2). Generally, Rule 17Ad-11(c)(2)

requires a transfer agent to file a report at the end of each

quarter during which it has an aged record difference (i.e., where

the number of shares on the securityholder file does not equal the

number of shares authorized and issued by the issuer). The report

contains information such as the size and dollar value of the record

difference, the reason for the record difference, and the size and

dollar value of any buy-ins executed to remedy the record

difference. (A buy-in is required when a registered transfer agent

overissues shares. The registered transfer agent within 60 days of

the discovery of such overissuance buys-in securities equal to the

number of shares in the case of equity securities or equal to the

principal dollar amount in the case of debt securities. 17 CFR

240.17Ad-10(g).)

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The proposal would eliminate the collection of information about

transfer agent custodian (TAC) arrangements.\23\ The current question

tends to glean erroneous responses from many transfer agents while

accurate information is readily obtainable from The Depository Trust

Company.

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\23\ TAC agreements, which are more commonly referred to as fast

automated securities transfer (FAST) accounts, exist between large

transfer agents and The Depository Trust Company.

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As discussed above, the Commission proposes to use a uniform

reporting period in Form TA-2. Accordingly, information relating to a

transfer agent's dividend disbursement and interest paying agent

activities, and information relating to the volume of openend

investment company securities purchases and redemptions a transfer

agent processes would be reported for the twelve months ending June 30

instead of for the preceding calendar year ending December 31.\24\

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\24\ Revised Form TA-2 would use the more commonly used industry

term ``purchases and redemptions'' instead of ``transactions'' when

referring to open-end investment company securities processing.

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Current Form TA-2 requests both the number of transactions

processed on a date other than the date of receipt of the order and the

``number of transactions processed on other than on date of receipt of

order, expressed as a percentage of total transactions processed.''

Because the Commission can compute the percentage based on other data

in the form, the percentage inquiry would be eliminated.

Finally, the proposal would add a question regarding turnaround

time. Revised Form TA-2 would ask transfer agents to report the number

of months during the reporting period in which the registrant was not

in compliance with the specified turnaround time for routine items

pursuant to Rule 17Ad-2.\25\ Revised Form TA-2 also would ask transfer

agents to report the number of written notices the transfer agent filed

and should have filed during the reporting period documenting its

noncompliance with turnaround time for routine items pursuant to Rule

17Ad-2.

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\25\ Turnaround times for routine items are set forth in Rule

17Ad-2. 17 CFR 240.17Ad-2.

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C. Rule 17a-24

Rule 17a-24 requires registered transfer agents to report the

aggregate number of lost securityholder accounts as of June 30 of each

year and the percentage of total accounts represented by such lost

securityholder accounts. These figures currently must be reported for

lost securityholder accounts outstanding for: one year or less, three

years or less, five years or less, or more than five years. As noted in

the adopting release, the Commission adopted Rule 17a-24 to require the

reporting of information on aged lost securityholder accounts in order

to assess the effectiveness of search techniques employed by transfer

agents. Rule 17a-24 also requires information on lost securityholder

accounts that escheated to state unclaimed property administrators.

In 1998, transfer agents were required to report information on the

aging of lost securityholder accounts for the first time on Form TA-2.

Transfer agent representatives, however, have informed Commission staff

that compiling information on the aging of lost securityholder accounts

has proved to be extremely difficult. Many transfer agents have

indicated that their record systems are not designed to produce such

information and that to program their systems to provide such

information would be extremely burdensome and in some situations not

possible.\26\

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\26\ Because of these conversations, the Commission believes

that at this time transfer agents have not made or undertaken any

major systems changes.

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The Commission has reviewed the information required by Rule 17a-

24. The Commission believes that the Commission should refine transfer

agents' reporting requirements so that the information transfer agents

are required to file would give a better indication of the

effectiveness of the data base searches. The new reporting requirements

should also be less burdensome for transfer agents to implement.

Therefore, the Commission is proposing that: (1) transfer agents be

required to report on Form TA-2 the number of lost securityholders for

which a first and for which a second

[[Page 15314]]

data base search has been conducted and for which a correct address has

been obtained as a result of these searches; (2) transfer agents

continue, as required by Rule 17a-24, to report on Form TA-2 the

current number of lost securityholder accounts and the number of lost

securityholder accounts that were remitted to the states during the

last year; (3) the remaining information (i.e., aging of lost

securityholder accounts) will no longer be required; and (4) Rule 17a-

24 then be rescinded.

III. General Request for Comments

The Commission solicits commenters' views on all aspects of the

proposed amendments to Rule 17Ac2-2 and Form TA-2 and the proposed

rescission of Rule 17a-24 under the Securities Exchange Act of 1934

(Exchange Act). In particular, the Commission requests comment as to

whether the proposed amendments would provide the most effective means

for the Commission to obtain adequate information regarding transfer

agent operations. Are there other questions that the Commission could

ask on Form TA-2 to obtain useful information on transfer agent

operations? Is there other specific information regarding transfer

agent operations that the Commission should require to be provided on

Form TA-2?

In addition, the Commission requests comments on whether the

proposed change to the information on lost securityholders collected on

Form TA-2 would be a more effective method to track the effectiveness

of transfer agents' data base searches than the account aging

information currently required. Do transfer agents currently have the

aging information readily available to report? Is the proposed change a

more efficient and less costly method for transfer agents to report

information on their outstanding lost securityholder accounts? What

system changes and costs would transfer agents incur if they were only

required to report the aging of lost securityholder accounts

prospectively? (For example, it would only be five years from now that

a transfer agent would be required to report the number of

securityholder accounts that had been lost for five years.)

Finally, the Commission refers commenters to its policy statement

establishing a regulatory moratorium to facilitate the year 2000

conversion.\27\ The Commission anticipates that any amendments to Rule

17Ac2-2 and Form TA-2 would be adopted before the moratorium begins on

June 1, 1999. However, the Commission requests comment on the specific

extent to which the proposed amendments would require registered

transfer agents to make major programming changes to their computer

systems.

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\27\ Securities Exchange Commission Release Nos. 33-7568, 34-

40377, 35-26912, IA-1749, and IC-23416 (August 27, 1998), 63 FR

47051. The policy is available at the Commission's website

(www.sec.gov).

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IV. Costs and Benefits of the Proposed Amendments and Their Effects

on Competition

The Commission has identified certain costs and benefits relating

to the proposals, which are discussed below, and encourages commenters

to discuss any additional costs or benefits. In particular, the

Commission requests comment on the potential costs for any necessary

modifications to information gathering, management, and recordkeeping

systems or procedures as well as any potential benefits resulting from

the proposals for issuers, transfer agents, regulators, or others.

Commenters should provide analysis and empirical data to support their

views on the costs and benefits associated with the proposals.

A. Benefits

These amendments would help the Commission to:

Keep complete records on all registered transfer agents.

Currently, the Commission's staff cannot easily determine whether a

transfer agent who did not file a Form TA-2 is properly using an

applicable exception or whether the transfer agent has simply neglected

to file.

Use the information gathered from Form TA-2 to monitor the

annual business activities of registered transfer agents, including the

use of service companies, amendments to Form TA-1, direct purchase and

dividend reinvestment plan accounts, buy-ins, and turnaround time for

routine items.

Achieve a consistent reporting period which should

eliminate confusion from varying reporting periods. In addition, as the

volume of transfer business may not be consistent throughout the entire

reporting period, the current reporting requirement of only six months

of data is potentially skewed.

Elicit information regarding the data base searches for

lost securityholders. This information should enable the Commission to

assess the effectiveness of the search requirements of Rule 17Ad-17 and

the scope of the lost securityholder problem.

B. Costs

The proposed amendments to Rule 17Ac2-2 and Form TA-2 should not

result in any significant additional costs to transfer agents. The

majority of information required by Form TA-2 is available in the

internal files of the transfer agents, and a large portion of the

information is already required by the Commission to be calculated or

maintained.

The primary cost associated with the proposal is the time that it

will take transfer agent personnel to complete the form and file it

with the Commission. The amount of time needed to comply with the

requirements of amended Rule 17Ac2-2 and Form TA-2 would vary. There

are approximately 1,210 registered transfer agents. Of this number,

approximately 300 registrants would be required to complete only

Questions 1 through 4 and the signature section of amended Form TA-2.

Based on their low volume of transfer business and number of

shareholder accounts, approximately 410 registrants would be required

to answer only Questions 1 through 5, 10, and 11 and the signature

section. The remaining registrants, approximately 500, would be

required to complete the entire Form TA-2.

Additionally, there may be some incremental cost associated with

modifying computer systems to report all items for the twelve months

ending June 30. This likely would require a simple, one-time change to

database reporting functions and should have a negligible cost on

transfer agents. The Commission seeks comment on this assumption and

specifically requests empirical data on the cost of modifying systems

to report all items for the twelve months ending June 30.

C. Effects on Efficiency, Competition, and Capital Formation

Section 23(a)(2) of the Exchange Act precludes the Commission in

amending rules under the Exchange Act from adopting any such rule or

regulation that would impose a burden on competition not necessary or

appropriate in furtherance of the purposes of the Exchange Act.\28\ The

Commission is considering the proposed amendments to Rule 17Ac2-2 and

Form TA-2 in light of the standards cited in Section 23(a)(2). The

Commission is proposing these amendments to enhance the Commission's

ability to monitor more effectively the transfer agent industry. The

amendments are also intended to make the Form TA-2 more efficient for

[[Page 15315]]

both the Commission and transfer agents. Because transfer agents of a

similar size and with similar business are required to complete the

form in the same manner, there should be no negative impact on

competition. The Commission solicits commenters' views regarding the

effects of the proposed amendments to Rule 17Ac2-2 and Form TA-2 on

competition, efficiency, and capital formation. For purposes of the

Small Business Regulatory Enforcement Fairness Act of 1996, we also

seek comments on the proposed rule's potential impact (including any

empirical data) on the economy on an annual basis, any increase in

costs or prices for consumers, and any effect on competition,

investment or innovation.

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\28\ 15 U.S.C. 78w(a)(2).

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V. Summary of Initial Regulatory Flexibility Analysis

The Commission has prepared an Initial Regulatory

Flexibility Analysis (IRFA), in accordance with the provisions of

the Regulatory Flexibility Act,\29\ regarding the proposed amendments

to Rule 17Ac2-2 and Form TA-2 and the proposed rescission of Rule 17a-

24 under the Exchange Act. As discussed more fully in the analysis,

some of the transfer agents that the proposed amendments would affect

are small entities, as defined by the Commission's rules.

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\29\ 5 U.S.C. 603.

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The IRFA states the purpose of the proposal is to allow the

Commission to obtain more comprehensive information from transfer

agents about their activities while making Form TA-2 clearer and easier

for transfer agents to complete. The proposed amendments would: elicit

information regarding transfer agent business activities, such as

direct purchase and dividend reinvestment plan accounts, buy-ins, and

turnaround time for routine items; obtain more comprehensive lost

securityholder information; enhance service company information;

eliminate the filing exemption; clarify the filing requirements and

instructions; conform reporting periods; delete unnecessary questions;

and make technical changes.

The IRFA sets forth the statutory authority for the proposed

amendments to Rule 17Ac2-2 and Form TA-2 and for the rescission of Rule

17a-24. The IRFA also discusses the effect of the proposal on transfer

agents that are small entities pursuant to Rule 0-10(h) under the

Exchange Act.\30\ Rule 0-10(h) defines the term ``small business'' or

``small organization'' to include any transfer agent that: (1) received

less than 500 items for transfer and less than 500 items for processing

during the preceding six months (or in the time that it has been in

business, if shorter); (2) maintained master shareholder files that in

the aggregate contained less than 1,000 shareholder accounts or was the

named transfer agent for less than 1,000 shareholder accounts at all

times during the preceding fiscal year (or in the time that it has been

in business, if shorter); (3) only transferred items of issuers with

total assets of $5 million or less; and (4) is not affiliated with any

person (other than a natural person) that is not a small business or

small organization under Rule 0-10.

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\30\ 17 CFR 240.0-10(h). The Commission recently amended this

definition. Securities Exchange Commission Release Nos. 33-7548, 34-

40122, IC-23272, and IA-1727 (June 24, 1998), 63 FR 35508.

---------------------------------------------------------------------------

When the Commission adopted the new definition of ``small entity''

with respect to transfer agents, the Commission estimated that

approximately 180 registered transfer agents would qualify as small

entities under Rule 0-10. As a result, the Commission estimates that

180 small entities would be subject to the requirements of the proposed

amendments to Rule 17Ac2-2 and Form TA-2.

The proposed amendments to Rule 17Ac2-2 would provide that a

registered transfer agent that received fewer than 1,000 items for

transfer and fewer than 1,000 items for processing in the twelve months

ending June 30, and did not maintain master securityholder files for

more than 1,000 individual securityholder accounts as of June 30, would

have to complete only a portion of Form TA-2. All ``small entities'' as

defined by Rule 0-10 would continue to have reduced reporting

requirements under the proposal.

The IRFA states that the proposal would impose new reporting and

compliance requirements on certain transfer agents because it would

eliminate the filing exception for named transfer agents using service

companies and would require every registered transfer agent to file

Form TA-2 annually. In addition, questions regarding the use of service

companies, amendments to its Form TA-1, direct purchase and dividend

reinvestment plan accounts, buy-ins, lost securityholders, and

turnaround time for routine items would be added to Form TA-2. The IRFA

states that the incremental annual burden on all ``small entities''

would be approximately 81 hours and $2,552. The IRFA also states that

the proposed amendments to Rule 17Ac2-2 and Form TA-2 would not impose

any other reporting, recordkeeping, or compliance requirements, and

that the Commission believes that there are no rules that duplicate,

overlap, or conflict with the proposed amendments.

The IRFA discusses the various alternatives considered by the

Commission in connection with the proposed amendments to Rule 17Ac2-2

and Form TA-2 that might minimize the effect on small entities,

including: (a) the establishment of differing compliance or reporting

requirements or timetables that take into account the resources of

small entities; (b) the clarification, consolidation, or simplification

of compliance and reporting requirements under the proposed amendments

for small entities; (c) the use of performance rather than design

standards; and (d) an exemption from coverage of the rule or any part

thereof for small entities.

Taking into account the burden that would be imposed on small

transfer agents, the Commission is proposing that transfer agents that

meet the definition of a ``small entity'' still be required to respond

to only a portion of Form TA-2. Therefore, small entities would be

subject to a minimal amount of compliance cost under the proposal.

Accordingly, the Commission has determined that it is not feasible to

further clarify, consolidate, or simplify the proposed amendments for

``small entities.'' The Commission also believes that it would be

inconsistent with the purpose of the Exchange Act to exempt ``small

entities'' from the proposed amendments or to use performance standards

to specify different requirements for small entities.

The Commission encourages the submission of written comments with

respect to any aspect of the IRFA. Comments should specify costs of

compliance with the proposed amendments to Rule 17Ac2-2 and Form TA-2,

suggest alternatives that would accomplish the objective of proposed

amendments, or indicate how many small entities, if any, would be

subject to the rule change. A copy of the IRFA may be obtained by

contacting Lori R. Bucci, Office of Risk Management and Control,

Division of Market Regulation, Securities and Exchange Commission, 450

Fifth Street, N.W., Washington, D.C. 20549-1001.

VI. Paperwork Reduction Act

Certain provisions of the proposed amendments to Rule 17Ac2-2 and

Form TA-2 contain ``collection of information'' requirements within the

meaning of the Paperwork Reduction Act of 1995,\31\ and the Commission

has submitted them to the Office of

[[Page 15316]]

Management and Budget for review in accordance with 44 U.S.C. 3507(d)

and 5 CFR 1320.11. The Commission notes that it proposes to rescind

Rule 17a-24. However, the Commission proposes to keep two questions

generated by Rule 17a-24 on Form TA-2 and to add a question to Form TA-

2 about the results of the required data base searches for lost

securityholders. The title for the collection of information is:

``Transfer Agents Annual Report 17 CFR 240.17Ac2-2, Form TA-2.'' The

OMB control number for the collection of information is 3235-0337.

---------------------------------------------------------------------------

\31\ 44 U.S.C. 3501 et seq.

---------------------------------------------------------------------------

Under the proposed amendments, Rule 17Ac2-2 would require the

collection of additional information on amended Form TA-2. First, the

proposal would eliminate the filing exception for named transfer agents

and would require every named transfer agent using a service company

for all of its transfer and processing functions to complete only the

first four questions and the signature section of Form TA-2, which

request only simple information. Second, registered transfer agents

that meet the criteria based on volume of transfer business and number

of shareholder accounts would be required to Questions 1 through 5, 10,

11, and the signature section of Form TA-2. Finally, registered

transfer agents that file a complete Form TA-2 would be required to

respond to new questions regarding the use of service companies,

amendments to Form TA-1, direct purchase and dividend reinvestment plan

accounts, buy-ins, lost securityholders, and turnaround time for

routine items.

The Commission uses the information on Form TA-2 to monitor the

annual business activities of registered transfer agents. The proposed

collection of information under amended Rule 17Ac2-2 and Form TA-2 is

intended to facilitate greater accuracy of transfer agents' records.

Furthermore, the information elicited from the additional question

regarding lost securityholders should help the Commission to assess the

effectiveness of the search requirements of Rule 17Ad-17 and the scope

of the lost securityholder problem.

The collection of information required by the proposed amendments

to Rule 17Ac2-2 and Form TA-2 should not result in any new significant

burden to transfer agents. All information required by Form TA-2 is

available in the internal files of the transfer agents and a large

portion of the information is already required by existing Commission

transfer agent rules to be calculated or maintained.

The amount of time needed to comply with the requirements of

amended Rule 17Ac2-2 and Form TA-2 would vary. There are approximately

1,210 registered transfer agents. From this total number, approximately

300 registrants would be required to complete only Questions 1 through

4 and the signature section of amended Form TA-2, which the Commission

estimates would take each registrant about 30 minutes, for a total of

150 hours (300 x .5 hours). Approximately 410 registrants would be

required to answer Questions 1 through 5, 10, and 11 and the signature

section, which the Commission estimates would take about 1 hour and 30

minutes, for a total of 615 hours (410 x 1.5 hours). The remaining

registrants, approximately 500, would be required to complete the

entire Form TA-2, which the Commission estimates would take about 6

hours, for a total of 3000 hours (500 x 6 hours). The Commission

estimates that the total burden would be 3,765 hours (150 + 615 +

3000).\32\

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\32\ Based on an estimated average administrative labor cost of

$31.50 per hour, the Commission's staff estimates that the total

labor cost to the transfer agent industry for complying with Rule

17Ac2-2 and Form TA-2 would be $118,597.50 annually ($31.50 x

3,765).

---------------------------------------------------------------------------

The collection of information pursuant to the proposed amendments

to Form TA-2 and Rule 17Ac2-2 does not contain any new recordkeeping

requirements. Providing the information will be mandatory. Responses to

the collection of information will not be kept confidential. An agency

may not conduct or sponsor, and a person is not required to respond to,

a collection of information unless it displays a currently valid Office

of Management and Budget control number.

Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits

comments to:

(i) evaluate whether the proposed collection of information is

necessary for the proper performance of the functions of the agency,

including whether the information shall have practical utility;

(ii) evaluate the accuracy of the Commission's estimate of the

burden of the proposed collection of information;

(iii) enhance the quality, utility, and clarity of the information

to be collected; and

(iv) minimize the burden of collection of information on those who

are to respond, including through the use of automated collection

techniques or other forms for information technology.

Persons desiring to submit comments on the collection of

information requirements should direct them to the following persons:

Desk Officer for the Securities and Exchange Commission, Office of

Information and Regulatory Affairs, Office of Management and Budget,

Room 10202, New Executive Office Building, Washington, D.C. 20503; and

Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450

Fifth Street, N.W., Washington, D.C. 20549-0609, and refer to File No.

S7-11-99. The Office of Management and Budget (OMB) is required to make

a decision concerning the collection of information between 30 and 60

days after publication of this release in the Federal Register, so a

comment to OMB is best assured of having its full effect if OMB

receives it within 30 days of this publication.

VII. Statutory Basis

Pursuant to the Exchange Act and particularly Sections 17, 17A, and

23(a) thereof, 15 U.S.C. 78q, 78q-1, and 78w(a), the Commission

proposes to amend Sec. 240.17Ac2-2 and Form TA-2 (referenced in 17 CFR

249b.102) of Chapter II of Title 17 of the Code of Federal Regulations

in the manner set forth below.

List of Subjects in 17 CFR Parts in 240 and 249b

Reporting and recordkeeping requirements, Securities.

Text of Amendment

For the reasons set forth in the preamble, the Commission proposes

to amend Chapter II of Title 17 of the Code of Federal Regulations as

follows:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF

1934

1. The authority citation for Part 240 continues to read in part as

follows:

Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77eee,

77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78f, 78i, 78j, 78j-1, 78k,

78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll(d),

77mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and

80b-11, unless otherwise noted.

* * * * *

Sec. 240.17a-24 [Removed]

2. Section 240.17a-24 is removed.

3. Section 240.17Ac2-2 is revised to read as follows:

Sec. 240.17Ac2-2 Annual reporting requirement for registered transfer

agents.

(a) Every transfer agent registered on June 30 shall file an annual

report on Form TA-2 (Sec. 249b.102 of this chapter) by August 31 of

that calendar year. Form TA-2 shall be completed in accordance with the

instructions contained in the form.

[[Page 15317]]

(1) A registered transfer agent that received fewer than 1,000

items for transfer and fewer than 1,000 items for processing in the

reporting period and that did not maintain master securityholder files

for more than 1,000 individual securityholder accounts as of June 30 of

the reporting period shall complete only Questions 1 through 5, 10, 11,

and the signature section of Form TA-2 (Sec. 249b.102 of this chapter).

(2) A named transfer agent, as defined in Sec. 240.17Ad-9(j), that

engaged a service company, as defined in Sec. 240.17Ad-9(k), to perform

all of its transfer and processing functions during the reporting

period shall complete only Questions 1 through 4 and the signature

section of Form TA-2 (Sec. 249b.102 of this chapter).

(3) A named transfer agent, as defined in Sec. 240.17Ad-9(j) that

engaged a service company, as defined in Sec. 240.17Ad-9(k), to perform

some but not all of its transfer and processing functions during the

reporting period shall complete all of Form TA-2, (Sec. 249b.102 of

this chapter) but shall enter zero (0) for those questions which relate

to functions performed by the service company on behalf of the named

transfer agent.

(b) For purposes of this section, the term reporting period shall

mean the 12 months ending June 30 of the year for which the form is

being filed.

PART 249b--FURTHER FORMS, SECURITIES EXCHANGE ACT OF 1934

4. The authority citation for Part 249b continues to read in part

as follows:

Authority: 15 U.S.C. 78a, et seq., unless otherwise noted;

* * * * *

5. Form TA-2 (referenced in Sec. 249b.102) is revised to read as

follows:

[Note: Form TA-2 does not and the amendments will not appear in

the Code of Federal Regulations.]

United States Securities and Exchange Commission, Washington, D.C.

20549

Instructions for Use of Form TA-2

Form TA-2 is to be used by transfer agents registered pursuant to

Section 17A of the Securities Exchange Act of 1934 for filing the

annual report of transfer agent activities.

ATTENTION: Certain sections of the Securities Exchange Act of 1934

applicable to transfer agents are referenced below. Transfer agents are

urged to review all applicable provisions of the Securities Exchange

Act of 1934, the Securities Act of 1933, and the Investment Company Act

of 1940, as well as the applicable rules promulgated by the SEC under

those Acts.

I. General Instructions for Filing and Amending Form TA-2.

A. Terms and Abbreviations. The following terms and abbreviations

are used throughout these instructions:

1. ``Act'' means the Securities Exchange Act of 1934.

2. ``Aged record difference'', as defined in Rule 17Ad-11(a)(2),

means a record difference that has existed for more than 30 calendar

days.

3. ``ARA'' means the appropriate regulatory agency, as defined in

Section 3(a)(34)(B) of the Act.

4. ``Form TA-2'' includes the Form TA-2 itself and any attachments.

5. ``Lost securityholder'', as defined in Rule 17Ad-17, means a

securityholder: (i) to whom an item of correspondence that was sent to

the securityholder at the address contained in the transfer agent's

master securityholder file has been returned as undeliverable;

provided, however, that if such item is re-sent within one month to the

lost securityholder, the transfer agent may deem the securityholder to

be a lost securityholder as of the day the re-sent item is returned as

undeliverable; and (ii) for whom the transfer agent has not received

information regarding the securityholder's new address.

6. ``Named transfer agent'', as defined in Rule 17Ad-9(j), means a

registered transfer agent that has been engaged by an issuer to perform

transfer agent functions for an issue of securities but has engaged a

service company (another registered transfer agent) to perform some or

all of those functions.

7. ``Outside registrar'', as defined in Rule 17Ad-1(b), means a

transfer agent which performs only the registrar function for the

certificate or certificates presented for transfer and includes the

persons performing similar functions with respect to debt issues. See

also Section 3(a)(25)(B) of the Act.

8. ``Record difference'' means any of the imbalances described in

Rule 17Ad-9(g).

9. ``Registrant'' means the transfer agent on whose behalf the Form

TA-2 is filed.

10. ``Reporting period'' means the 12 months ending June 30 of the

year for which Form TA-2 is being filed.

11. ``Rule'' or ``Rules'' are found in Volume 17, Section 240 of

the Code of Federal Regulations (CFR) (e.g., Rule 17Ad-1 is found at 17

CFR 240.17Ad-1).

12. ``SEC'' means the United States Securities and Exchange

Commission.

13. ``Service company'' means the registered transfer agent engaged

by a named transfer agent to perform transfer agent functions for that

named transfer agent, as defined in Rule 17Ad-9(k).

14. ``Transfer agent'', as defined in Section 3(a)(25) of the Act,

means any person who engages on behalf of an issuer of securities or on

behalf of itself as an issuer in at least one of the functions

enumerated therein.

B. Who Must File; When to File

1. Every transfer agent that is registered on June 30 shall file

Form TA-2 in accordance with the instructions contained therein by

August 31 of that calendar year.

a. A registered transfer agent that received fewer than 1,000 items

for transfer and fewer than 1,000 items for processing during the

reporting period and that did not maintain master securityholder files

for more than 1,000 individual securityholder accounts as of June 30 of

the reporting period is required to complete only Questions 1 through

5, 10, and 11, and the signature section of Form TA-2.

b. A named transfer agent that engaged a service company to perform

all of its transfer and processing functions during the reporting

period is required to complete only Questions 1 through 4 and the

signature section of Form TA-2.

c. A named transfer agent that engaged a service company to perform

some but not all of its transfer and processing functions during the

reporting period must complete all of Form TA-2 but should enter zero

(0) for those questions that relate to functions performed by the

service company on behalf of the named transfer agent.

2. The date on which any filing is actually received by the SEC is

the Registrant's filing date provided that the filing complies with all

applicable requirements. A filing that does not comply with applicable

requirements may be rejected by the SEC. The SEC's receipt of a filing,

however, shall not constitute an SEC finding that the filing has been

filed as required or that the information therein is accurate, current,

or complete.

C. Number of Copies; How and Where to File.

The Registrant must file the original and two copies of Form TA-2

with the SEC. The original copy of Form TA-2 must be manually signed

and any additional copies may be photocopies of the signed original

copy. All copies must be legible and on good quality 8\1/2\ x 11 inch

white paper. The Registrant must keep an exact copy of any filing for

its records.

The Registrant must file Form TA-2 directly with the SEC at:

Securities and

[[Page 15318]]

Exchange Commission, Office of Filings and Information Services, Mail

Stop A-2, 450 5th Street, N.W., Washington, DC 20549.

II. Special Instructions for Filing Form TA-2

A. Indicate the year for which Form TA-2 is filed in the box at the

upper left hand corner. A transfer agent registered on June 30 shall

file Form TA-2 by August 31 of that calendar year even if the transfer

agent conducted business for less than the entire reporting period.

B. In answering Question 4, indicate the number of items received

for transfer and the number of items received for processing during the

reporting period. Omit the purchase and redemption of open-end

investment company shares. Report those items in response to Question

C. In answering Questions 5 and 6, include closed-end investment

company securities in the corporate equity securities category.

In answering Question 5.a, include direct purchase and dividend

reinvestment plan accounts in the total number of individual

securityholder accounts maintained. In Question 5.b., include dividend

reinvestment plan accounts only. In Question 5.c., include direct

purchase plan accounts only. In Question 5.d., include American

Depositary Receipts (ADRs) in the corporate equity or corporate debt

category, as appropriate, and include direct purchase and dividend

reinvestment plan accounts in the corporate equity or open-end

investment company securities category, as appropriate.

In answering Question 6, all series of debt securities issued under

a single indenture are to be counted as one issue. Open-end investment

company securities portfolios are to be counted as one issue per CUSIP

number.

D. In answering Question 8.c., exclude coupon payments and

transfers of record ownership as a result of corporate actions.

E. In answering Question 9, exclude non-value transactions such as

name or address changes.

III. Federal Information Law and Requirements

SEC's Collection of Information: An Agency may not conduct or

sponsor, and a person is not required to respond to, a collection of

information unless it displays a currently valid control number. Under

Sections 17, 17A(c) and 23(a) of the Act and the rules and regulations

thereunder, the SEC is authorized to solicit from registered transfer

agents the information required to be supplied on Form TA-2. The filing

of this Form is mandatory for all registered transfer agents. The

information will be used for the principal purpose of regulating

registered transfer agents but may be used for all routine uses of the

SEC or of the ARAs. Information supplied on this Form will be included

routinely in the public files of the ARAs and will be available for

inspection by any interested person. Any member of the public may

direct to the Commission any comments concerning the accuracy of the

burden estimate on the application facing page of this Form, and any

suggestions for reducing this burden. This collection of information

has been reviewed by the Office of Management and Budget in accordance

with the clearance requirements of 44 U.S.C. 3507. The applicable

Privacy Act system of records is SEC-2. This form is subject to the

routine uses set forth at 40 FR 39255 (Aug. 27, 1975) and 41 FR 5318

(Feb. 5, 1976).

File Number:

----------------------------------------------------------------------

For the reporting period ending June 30, ________

United States Securities and Exchange Commission, Washington, D.C.

20549

FORM TA-2--Form for Reporting Activities of Transfer Agents Registered

Pursuant to Section 17A of the Securities Exchange Act of 1934

1. Full name of Registrant as stated in Question 3 of Form TA-1:

(Do not use Form TA-2 to change name or address.)

----------------------------------------------------------------------

2. a. During the reporting period, has the Registrant engaged a

service company to perform any of its transfer and processing

functions? (Check appropriate box.)

____ All ____ Some ____ None

b. If the answer to subsection (a) is all or some, list on the

lines provided the name(s) and address(es) of all service

company(ies) engaged.

----------------------------------------------------------------------

3. a. Appropriate regulatory agency (Check one box only.)

____ Comptroller of the Currency

____ Federal Deposit Insurance Corporation

____ Board of Governors of the Federal Reserve System

____ Securities and Exchange Commission

b. During the reporting period, has the Registrant amended Form

TA-1 within 60 calendar days following the date on which information

reported therein became inaccurate, incomplete, or misleading?

(Check appropriate box.)

____ Yes, filed amendment(s)

____ No, failed to file amendment(s)

____ Not applicable

c. If the answer to subsection (b) is no, provide an explanation

on the lines provided.

----------------------------------------------------------------------

If the response to any question is none or zero, enter

``0''

4. Number of items received during the reporting period:

a. Transfer............................................ ________

b. Processing (outside registrar function)............. ________

[[Page 15319]]

5. a. Number of individual securityholder accounts, ________

including direct purchase and dividend reinvestment plan

accounts, maintained as of June 30........................

b. Number of individual securityholder dividend ________

reinvestment plan accounts maintained as of June 30...

c. Number of individual securityholder direct purchase ________

plan accounts maintained as of June 30................

d. Approximate percentage of individual securityholder

accounts, including direct purchase and dividend

reinvestment plan accounts, from subsection (a)

maintained in the following categories as of June 30:.

--------------------------------------------------------------------------------------------------------------------------------------------------------

Corporate debt Open-end investment Limited partnership Municipal debt

Corporate equity securities securities company securities securities securities Other securities

--------------------------------------------------------------------------------------------------------------------------------------------------------

6. Number of securities issues for which Registrant acts in the

following capacities, as of June 30:

a. Receives items for transfer and maintains the master

securityholder files:

b. Receives items for transfer but does not maintain the master

securityholder files:

c. Does not receive items for transfer but maintains the master

securityholder files:

--------------------------------------------------------------------------------------------------------------------------------------------------------

Corporate debt Open-end investment Limited partnership Municipal debt

Corporate equity securities securities company securities securities securities Other securities

--------------------------------------------------------------------------------------------------------------------------------------------------------

7. a. Number and aggregate market value of securities aged record

differences, existing for more than 30 days, as of June 30: ...........

i. Number of issues.................................... ______

ii. Market value (in dollars).......................... ______

b. Number of quarterly reports regarding buy-ins filed ______

by the Registrant with its ARA (including the SEC)

during the reporting period pursuant to Rule 17Ad-

11(c)(2)..............................................

c. During the reporting period, has the Registrant been

notified by its ARA (including the SEC) that it failed

to file quarterly reports regarding buy-ins pursuant

to Rule 17Ad-11(c)(2)?................................

____ Yes ____ No

d. If the answer to subsection (c) is yes, provide an

explanation for each notification on the lines

provided..............................................

----------------------------------------------------------------------

8. Scope of certain additional types of activities performed:

a. Number of issues for which dividend reinvestment ______

plan services are provided, as of June 30.............

b. Number of issues for which direct purchase plan ______

services are provided, as of June 30..................

c. Dividend disbursement and interest paying agent

activities conducted during the reporting period:

i. number of issues.................................... ______

ii. amount (in dollars)................................ ______

9. Number of open-end investment company securities purchases and

redemptions (``transactions'') excluding dividend and distribution

postings processed during the reporting period:

a. Total number of transactions processed.............. ______

b. Number of transactions processed on a date other ______

than date of receipt of order (``as ofs'')............

10. a. Number of lost securityholder accounts as of June 30 ______

b. Percentage of total accounts represented by lost ______

securityholder accounts as of June 30.................

c. Number of lost securityholder accounts that have ______

been remitted to states during the reporting period...

d. Percentage of total accounts represented by lost ______

securityholder accounts that have been remitted to

states as of June 30..................................

11. Number of lost securityholder accounts listed on the transfer

agent's master securityholder files during the reporting period:

a. For which a first data base search has been ______

conducted.............................................

b. For which a correct address has been obtained ______

through the first data base search....................

c. For which a second data base search has been ______

conducted.............................................

d. For which a correct address has been obtained ______

through the second data base search...................

12. a. During the reporting period, has the Registrant (except when

acting as an outside registrar) always been in compliance with the

turnaround time for routine items as set forth in Rule 17Ad-2(a)?

____ Yes ______ No

If the answer to subsection (a) is no, complete subsections (i) through

(iii).

i. Provide the number of months during the reporting ______

period in which the Registrant was not in compliance

with the turnaround time for routine items according

to Rule 17Ad-2(a).....................................

ii. Provide the number of written notices Registrant ______

filed during the reporting period with the SEC and

with its ARA pursuant to Rule 17Ad-2(c) that reported

its noncompliance with turnaround time for routine

items according to Rule 17Ad-2(a).....................

iii. Provide the number of times during the reporting ______

period that the Registrant was notified by its ARA

that it failed to file written notices with its ARA

pursuant to Rule 17Ad-2(c) to report its noncompliance

with turnaround time for routine items according to

Rule 17Ad-2(a)........................................

b. Has the Registrant, acting as an outside registrar, always been in

compliance during the reporting period with the turnaround time for

routine items as set forth in Rule 17Ad-2(b)?

____ Yes ______ No

If the answer to subsection (b) is no, complete subsections (i) through

(iii).

[[Page 15320]]

i. Provide the number of months during the reporting ______

period in which the Registrant was not in compliance

with the turnaround time for routine items according

to Rule 17Ad-2(b).....................................

ii. Provide the number of written notices Registrant ______

filed during the reporting period with the SEC and

with its ARA pursuant to Rule 17Ad-2(d) that reported

its noncompliance with turnaround time for routine

items according to Rule 17Ad-2(b).....................

iii. Provide the number of times during the reporting ______

period that the Registrant was notified by its ARA

that it failed to file written notices with its ARA

pursuant to Rule 17Ad-2(d) to report its noncompliance

with turnaround time for routine items according to

Rule 17Ad-2(b)........................................

ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT

CONSTITUTE FEDERAL CRIMINAL VIOLATIONS. See 18 U.S.C. 1001 and 15

U.S.C. 78ff(a)

SIGNATURE: The Registrant submitting this Form, and the person

signing the Form, hereby represent that all the information

contained in the Form is true, correct, and complete.

Manual signature of Official responsible for Form:

----------------------------------------------------------------------

Title:

----------------------------------------------------------------------

Telephone number:

----------------------------------------------------------------------

Name of Official responsible for Form: (First name, Middle name,

Last name)

----------------------------------------------------------------------

Date signed (Month/Day/Year):

----------------------------------------------------------------------

By the Commission.

Dated: March 23, 1999.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 99-7840 Filed 3-30-99; 8:45 am]

BILLING CODE 8010-01-P

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.