August 12, 2002

Dear Ms. Johnson and Mr. Katz:

The Asset Managers Forum (the "AMF") appreciates this opportunity to comment on the "Interagency White Paper on Structural Changes in the Settlement of Government Securities: Issues and Options," jointly issued by the Board of Governors of the Federal Reserve System (the "Board") and the U.S. Securities and Exchange Commission (the "Commission") in May 2002. The AMF, an independent affiliate organization of The Bond Market Association ("TBMA"), represents the buyside with respect to major securities processing initiatives. The membership of the AMF includes over 35 major investment management firms with a combined NAV with respect to assets under management in excess of $8 trillion. A list of AMF members is attached for your reference.

The AMF applauds the Board and the Commission for their examination of the clearance and settlement system for government securities. The issues raised by the White Paper are of profound significance to the buyside, particularly in the areas of market liquidity and operational risk. The significant backlog of fails in the government securities market following the tragic events of September 11, 2001 clearly demonstrates the need for a thorough examination of the current clearance and settlement system and potential operational, structural and financial enhancements.

The AMF endorses the views expressed by TBMA in its comment letter, including the bond industry's proposed methodology for the examination of structural changes to the clearance and settlement system. We strongly support the position that the first priority in evaluating such changes is market liquidity. The buyside community relies on JPMorgan Chase ("Chase") and The Bank of New York ("BONY") to place large volumes of funds on a short-term basis in triparty repos. The AMF would therefore be concerned with any proposed structural changes to the extent that they would impact the liquidity of the triparty repo market. The AMF also supports the view that the current system effectively serves the needs of all market participants with respect to clearance and settlement of government securities, and therefore potential enhancements should be considered within the present structure of the system.

The AMF supports the recommendation that an Advisory Committee be formed to more closely examine the issues raised in the White Paper. As the buyside's primary advocate with respect to securities processing matters, the AMF stands ready to serve on such a Committee and work with the regulatory community and all market participants to scrutinize potential enhancements to the government securities clearance and settlement system. Please contact Ken Juster, Director of the AMF, at 212.440.9471 should you have any questions regarding this comment letter.

Sincerely,

s/Michael Wyne

Michael L. Wyne
Fischer, Francis, Trees & Watts
Chairman, The Asset Managers Forum

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