In the CASH SETTLEMENT area, using the PCC approach:

Money balances for ALL trades (listed and OTC; broker and institution) settled with one entity, PCC.

CONSIDERABLE PROGRESS TO DATE

National Coordinating Group for Depositories

Nationwide Network of Depository Committees

PCSE Institutional Clearing Program (ICP)

Major California Banks Now in PCC or Working toward Joining PCC

Memorandum of Understanding (Clearing and Depository
Participation)

-

PSD Implementation Committee 6 Full-time EDP Systems Specialists;

Bank →PCC Interface (Including On-line ICP)

Bank PSD Interface

PSD Business Plan

Full Bank Participation in PSD

Infuse capital

Deposit agency and fiduciary securities

Western Region PSD Committee

Considerable interest in PCSE clearing ("1st" or "2nd" level clearing)

All PCC clearing firms to be converted to PSD book-entry transfer.

In the CASH SETTLEMENT area, using the PCC approach:

Money balances for ALL trades (listed and OTC; broker and institution) settled with one entity, PCC.

CONSIDERABLE PROGRESS TO DATE

National Coordinating Group for Depositories

Nationwide Network of Depository Committees

PCSE Institutional Clearing Program (ICP)

Major California Banks Now in PCC or Working toward Joining PCC

Memorandum of Understanding (Clearing and Depository
Participation)

PSD Implementation Committee 6 Full-time EDP Systems Specialists;

Bank PCC Interface (Including On-line ICP)

Considerable interest in PCSE clearing (“1st” or “2nd” level clearing)

All PCC clearing firms to be converted to PSD book-entry transfer.

JOINT APPROACH

The joint approach to clearing on the Pacific Coast is based on the
Pacific Clearing Corporation (PCC) using its net-by-net
over-the-counter and listed clearing system as the western part of
the National Clearing Corporation (NCC) over-the-counter clearing
system. The PCC system would be interfaced with the NCC
system, so that transactions entered in either one would be
effectively entered in both, as required by the system or elected
by the broker.

Advantages of the Joint Approach to OTC clearing are that it:

*

Accommodates regional differences in business hours, banking relationships, taxes, etc.

* Provides for combined positions and clearing for OTC --
transactions and transactions on one or more stock
exchanges, in the same security.

Connects to the Pacific Securities Depository, which will
ultimately interface with Central Certificate Service and
other depositories as formed.

Permits local flexibility and creativity in developing new and improved services for brokers.

The

"ONE AGENCY" APPROACH

"one agency" approach is based
on a uniform
over-the-counter clearing system established in all parts of the
country, including the Pacific Coast. The OTC clearing facilities on
the West Coast might be contiguous to the listed clearing facilities.
However, the broker's OTC transactions and OTC clearing
requirements would be entirely independent of any other clearing
facilities in which he participates.

Advantages to the "One Agency" Approach to OTC Clearing are that it:

*

Can insulate local brokers from national changes.

*

Provides good response to local brokers by virtue of local control and responsibility.