September 2, 1992
TO: OPERATIONS COMMITTEE NO. 30-92
TRANSFER AGENT ADVISORY COMMITTEE NO. 50-92
RE: SIGNATURE GUARANTEE POLICIES & PROCEDURES UNDER RULE 17Ad-15
__________________________________________________________
Several months ago the Institute requested that the
Operations Committee and Transfer Agent Advisory Committee (TAAC)
members forward copies of their signature guarantee policies and
procedures under the new rule, in order to determine if there are
any generally accepted approaches among the industry (see
Operations Committee memorandum No. 9-92 and TAAC memorandum No.
19-92).
An analysis of the written policies and procedures received
has been performed. Twenty-nine responses were received from
twenty-four mutual fund complexes and five independent transfer
agents. Twenty-seven of the twenty-nine respondents have
established written standards that accept signature guarantees
from all "eligible guarantor institutions" as defined by the
rule. The two remaining respondents have established written
standards that will reject guarantees from eligible guarantors
who are not participants in a signature guarantee program after a
six month transition period from the date their written standards
were established, as required by the rule.
Approximately two-thirds of the respondents specify their
rejection and record retention procedures in their written
policies and procedures. Thirty percent of the respondents also
mention in their policies and procedures other acceptance
criteria which are unrelated to the type of institution providing
the guarantee. In addition, thirty-seven percent of the
respondents who accept all eligible guarantor institutions
mentioned verification procedures using source materials and
industry publications.
We would like to request that if your signature guarantee
policies and procedures have been changed materially since the
survey (or in the future), that you forward an updated copy to
the Institute so that we may continue to monitor these policies
and procedures as the are developed.
-2-
Also enclosed is a copy of a letter sent by the Securities
Transfer Association (STA) to its members, registered transfer
agents and industry participants on August 15, 1992. The STA
Board recommended that transfer agents that have established
standards and procedures pursuant to which they will accept
signature guarantees only from participants in signature
guarantee programs after August 24, 1992 (six months from the
February 24, 1992 effective date of the new Rule 17Ad-15), change
the date in their standards to October 26, 1992, to provide an
additional 2 months during which the industry may continue to
function in both environments. This request was presented to
allow additional time for the STAMP program and other signature
guarantee programs to develop.
Kathleen C. Joaquin
Director -Operations/
Fund Accounting
Enclosure