VOLUME 21 - BULLETIN #33

TO:	ALL CLEARING MEMBERS
FROM:	BUSINESS SYSTEMS GROUP
DATE:	March 5, 2001
SUBJECT:	Network Conversion and Related Costs

In September 2000, Clearing began assessing variable fees for the new TCP/IP network. Beginning in December 2000, fixed fees for the new TCP/IP network were also added to the clearing member invoices. These fees are being charged regardless of whether firms are converted to and using the new network. This was done 1.) to help defray the costs of the new network that were being subsidized by Clearing, 2.) to provide an incentive for conversion to the new network and 3.) to allow Clearing to set a date for the termination of the old SNA network. After reviewing the rate of firms conversions that occurred so far, it is anticipated that the old network can be disconnected for all firms by the end of the 1^st quarter, 2001.

When firms request that their SNA connection be terminated, the charge for the old network will no longer be assessed. This charge for the old network was based on the number of users on the system. As the number of users on the old network decreases, the cost to Clearing increases. Rather than increase the cost to the remaining firms on the old network, Clearing will subsidize the cost of the old network until such time when all T-1 devices currently used to support the SNA network can be disconnected. Clearing is committed to providing this subsidy for a reasonable time frame that will allow all firms an opportunity to convert to the new network. The deadline for that time frame has been determined to be March 30, 2001. Any firm that remains on the old network after the first quarter deadline will equally bear the firm cost that was assessed for the SNA network.

Should you have any questions, please call or e-mail one of the following Business Systems Analysts: