From: Vinny Lepore [vlepore@direcway.com]
Sent: Tuesday, December 23, 2003 10:02 AM
To: rule-comments@sec.gov
Subject: File No. SR-NSCC-2003-21

Jonathan G. Katz 
Secretary 
US Securities and Exchange Commission 
450 Fifth Street, NW 
Washington, DC 20549 

        Re:   Response to SR-NSCC-2003-21 

Dear Sir: 

I respectfully submit this letter in response to the request for comments 
to Release No. 34-48846:  Notice of Proposed Rule Change Relating to the 
Separately Managed Accounts Service, SR-NSCC-2003-21.

My name is Vincent Lepore.  I have been an active participant in the 
investment management industry for over 30 years and am currently acting 
as a consultant for participants in the separately managed account (SMA) 
industry.  

I support the proposed rule change.

Two years ago, the Money Management Institute asked me to participate in a 
sub-committee to explore the creation of standards for data communications 
in the separately managed accounts industry.  It is well known that the SMA 
industry suffers from a chaotic environment of proprietary networks for 
communicating critical information between industry participants.  Large 
industry consulting firms had previously identified this issue in operations 
for the SMA industry as the largest barrier to entry for new participants.  
A collegial group of industry participants volunteered their time and met at 
least monthly to devise a better way of conducting business utilizing 
standardized communications and a common platform for the conveyance of 
these critical communications.

We were successful in crafting the first edition of standards for communicating 
information between participants in 2002.  The standards defined the content, 
purpose and workflow process that should be adopted by the SMA industry to 
communicate critical information in the life cycle of separately managed accounts.  
The participants in the sub-committee discussed how we would use the standards 
to help improve communications in the industry.  We arrived at a consensus that 
NSCC would be the best communications platform for industry communications.  
They would be our industry “middleware” solution.  

Every one of the participants in the standards creation process represented 
active industry participants who were currently operating in the SMA industry.  
We understood the difficulties of the current operating environment and what 
the maintenance of the status quo would mean for the industry.  The industry 
is stifled by the current operating environment.  Competition in the industry 
is curtailed by the operations barriers to entry.  It was our consensus as a 
group that the industry needed a utility to provide the communications service 
for standard data communications.

The history of NSCC providing this capability to the Mutual Fund industry was 
well known within the MMI sub-committee.  The scalability of the Mutual Fund 
industry ceased to be a significant issue after the introduction of the NSCC 
service.  For me personally, the history of the introduction of the Depository 
Trust Company’s Institutional Delivery (ID) system and its impact on the 
securities industry in general was similarly liberating to industry participants 
ability to transact business and focus on service to investors.  The introduction 
of the NSCC service made possible by the adoption of the rule change will have a 
similar effect on the SMA industry.   

As a former Chief Operating Officer of an Investment Management firm with 
$6 billion of assets in the SMA industry, I knew the difficulties of operations 
in the industry.  We, as an MMI committee, were all very familiar with existing 
SMA industry capabilities and we agreed that NSCC would be the best choice.

I firmly believe that this will significantly enhance competition in the industry.  
The introduction of standard communications using an industry utility, that is 
industry owned and operated, will ensure that the industry’s interests will be 
maintained.  With enhanced competition, services may be provided to investors at 
a lower cost.

The NSCC platform will provide better service to investors.  This platform will 
allow the commoditization of communications between industry participants and 
streamline many of the operations processes for the SMA industry.

The history of NSCC operating its service on a not for profit basis reduces the 
ultimate cost to investors.  Once again, the history of NSCC’s reduction of 
transaction costs to participants is well known in the industry.  As more 
participants adopt the service, NSCC has reduced the cost to transact business 
and rebated excess fees to participants.  This is in stark contrast to the 
current environment.   

Participants will enjoy lower costs of doing business and ultimately pass these 
savings on to investors in the form of lower fees for services.  Industry 
participants will be able to reallocate scarce resources to improving the 
investor services they provide.  The value added components of the business 
will be a focus of innovation and product introduction.  The cost of 
communications will no longer be a drag on resources or profits.

With the improvement in content and means of communications in the SMA industry, 
the clarity of communications will significantly improve.  The combination of 
standard communications and an industry utility, NSCC, for the conveyance of 
mission critical information will dramatically reduce errors and their associated 
costs for industry participants.  It will also improve the investor experience 
and enhance the credibility and reputation of service providers in the SMA 
industry.

I urge you to adopt the rule change to allow the NSCC to provide the Separately 
Managed Account Service.

Thank you,

Respectfully submitted,


Vincent J. Lepore
305 Post Road
North Salem, N.Y. 10560