January 17, 1992
TO: SEC RULES MEMBERS NO. 2-92
OPERATIONS MEMBERS NO. 2-92
TRANSFER AGENT ADVISORY COMMITTEE NO. 2-92
RE: SEC ADOPTS RULE REGARDING ACCEPTANCE OF SIGNATURE GUARANTEES
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The Securities and Exchange Commission recently adopted
Rule 17Ad-15 under the Securities Exchange Act of 1934 to
prohibit inequitable treatment of eligible guarantor institutions
(as defined in the Rule) and to require transfer agents to
establish written standards for the acceptance of signature
guarantees. The new Rule becomes effective on February 24, 1992.
Attached is a copy of the SEC release adopting the Rule.
The final rule is similar to the proposed rule with several
modifications made in response to suggestions and concerns
submitted by commenters. A significant change to the Rule allows
transfer agents to reject signature guarantees from eligible
guarantors that are not members of or participants in a signature
guarantee program recognized by that transfer agent, even if
those guarantors otherwise meet the transfer agent's standards
for guarantor acceptance.
In the attached release, the SEC discusses the Institute's
concerns expressed in its letter concerning the applicability of
the Rule to mutual fund transactions that do not involve a change
in ownership (e.g., changes in the bank or bank account to which
proceeds are to be sent in the event a future redemption
instruction is sent by the registered owner). (See Memorandum to
SEC Rules Committee No. 68-91, Operations Committee No. 36-91 and
Transfer Agent Advisory Committee No. 56-91, dated November 22,
1991). However, the SEC disagreed with the Institute's comments
and clarified that all mutual fund transactions are covered by
the rule, including instructions that do not have immediate
financial consequences.
Donald J. Boteler
Assistant Vice President-
Operations
Attachment