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Joint Press Release Board of Governors of the Federal Reserve System
Securities and Exchange Commission

For Immediate Release
May 9, 2002

Federal Reserve and SEC Publish White Paper on Potential Structural Change in the Settlement of Government Securities

The Federal Reserve Board and Securities and Exchange Commission today announced release of a "white paper" discussing possible structural changes in the settlement of government securities and requested public comment on it.

The paper, to be published May 13 in the Federal Register, was developed with a goal of identifying issues and questions that need to be further explored. In releasing the paper, the staffs of the agencies emphasized they have not concluded that any of the approaches discussed represent an improvement over current arrangements or that structural change is necessary.

Following the September 11, 2001 terrorist attacks, the agencies held discussions with market participants concerning vulnerabilities in the settlement of government securities. Market participants were interested in exploring structural changes in the provision of settlement services for government securities, including the concept of establishing a utility to conduct settlement. The paper identifies possible approaches for creating a utility and possible assessment criteria for evaluating the various approaches.

Comments are requested by August 12, 2002.

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Last update: May 9, 2002