Summary

In response to a congressional request, GAO examined the validity of comments received from primary dealers alleging that variations between the Federal Reserve System districts' operation of the securities transfer network created disadvantages for dealers in certain districts.

GAO found that the System: (1) has separate securities transfer systems; (2) is investigating depository institutions' needs for security transfer services; (3) accelerated the timetable for expanding access to the securities and, as of June 1986, implemented nationwide transfers of Federal Home Loan Mortgage Corporation and Federal National Mortgage Association mortgage-backed securities; (4) began stricter enforcement of its requirements for granting extensions to the securities transfer deadline; (5) is closing its book-entry security transfer system more promptly; (6) is considering applying a systemwide penalty to dealers who complete an original transaction after the deadline for original transactions; (7) is considering implementing nationwide dealer turnaround, in which dealers will have extra time at the end of the day to deliver securities to their ultimate customers; and (8) would not consider a standard opening time, since depository institutions neither desired it nor felt it was necessary.